Asahi Glass Co. Ltd. Annual Report 2010

Plain-text annual report

A G C R e p o r t 2 0 1 0 1 2 4 5 3 6 7 8 ❶ Fluoropolymer-based plastic optical ﬁber (FONTEXTM) ❷ TFT LCD glass substrates ❸ Liège-Guillemins Station, Belgium / ©AGC Glass Europe ❹ Automotive glass ❺ Glass substrates for hard disk drive Author : Fernando Tomás (Zaragoza, Spain) ❻ Fluon® ETFE Film ❼ Solar panels / Spain *For illustrative purpose only ❼ Synthetic quartz glass AGC Report 2010 Issued June 2010 *Soy ink is used for this Report The paper used for pages 1 to 28 of this report comes from trees thinned from forests. This represents the effective use of trees thinned from forests and should in turn contribute to the promotion of forest thinning for forest health. Our Global Brand is the global brand of the AGC Group, which conducts business in roughly 30 countries and regions worldwide. The AGC Group boasts the world’s top-class technology and leading market shares in business areas such as glass, electronics and displays, and chemicals. Under the brand, our approximately 50,000 em- ployees work as one and create new values in order to realize the group vision . AGC Report 2010 Contents 2 Top Message Under the New Medium-Term Management Plan We will Accelerate the Building of Foundations for Growth. 4 AGC Group Vision 5 6 New Medium-Term Management Plan Management Policy Feature: An Important Part of the World We Live In 8 The AGC Group Makes Group-Wide Efforts to Improve the Technology of Solar Power Generation to Contribute to the Climate Change Issues. 10 LUMIFULONTM Protects the Beauty of the Tokyo Sky Tree, the World’s Tallest Broadcasting Tower at 634 Meters. Research & Development 12 Research & Development Creating the Future of the AGC Group AGC Group Now 14 Corporate Data/Organization Data/Consolidated Financial Highlights 16 AGC Group around the World 18 Outline by Business Segment 20 Business Overview 　Glass Operations 　Electronics and Display Operations 　Chemicals Operations and Other Operations AGC Group’s CSR 26 27 Corporate Governance / Internal Control / Risk Management 28 Board of Directors, Corporate Auditors and Executive Ofﬁ cers 29 Milestones 1907–2010 Communication Tools The AGC Group promotes communication with stakeholders through various tools. General corporate activities “AGC Report” (This report) Company brochure and an- nual report introducing the AGC Group’s vision as well as business highlights. CSR activities “CSR Report” Introduces the AGC Group’s social responsibilities. Financial information “Financial Review” Reports the AGC Group’s business outline and ﬁ nan- cial information including a consolidated ﬁ nancial state- ment. Activities of each corporate site Comprehensive information “Site Report” * On sites in Japan only Website Introduces the activities conducted at Asahi Glass plants and major Group companies on issues such as the environment, work place safety and health, security and disaster prevention. Offers a broad introduction of the AGC Group through timely in- formation disclosure. This website offers access to the websites of major group com- panies. AGC Group Website http://www.agc-group.com/ AGC CSR Website h t t p : / / w w w. a g c . c o . j p / english/csr/ AGC Investor Relations Website h t t p : / / w w w. a g c . c o . j p / english/ir/ AGC Report 2010 1 Top Message Under the New Medium-Term Management Plan We will Accelerate the Building of Foundations for Growth. For the AGC Group, 2009 was a year for gathering our strength for the future. To respond swiftly to a rapidly changing business climate, the AGC Group took measures to streamline its businesses in all areas ranging from management to operations. In particular, the AGC Group made every effort to improve proﬁ tability and asset efﬁ ciency by taking measures such as establishing a production system that responds to demand trends, improving productivity by leveraging spare facilities and personnel, and optimizing cash management. In addition to our own efforts, the global economy gradually strengthened at the end of 2009, helping our business to recover. However, the global economic downturn hastened changes in the market structures, creating a need for us to accelerate the introduction of measures to cope with these changes. Contributing to a Sustainable Society by Accelerating Measures At the time we initially formulated our management policy , we assumed that climate change and resource problems would become more serious and our market structure would change more dramatically with the growing importance of emerging markets by 2030. In reality, however, the market structure has been changing faster than expected. In order to respond to these drastic changes, the AGC Group needs to accelerate measures. In addition, we believe that we must contribute to the creation of a “Sustainable Society” which, as we realized, is indispensable not only from the viewpoints of climate change and resource problems but also from a more comprehensive global viewpoint. Based on this recognition, we have clearly deﬁ ned our aspirations for 2020 as follows, and set them as major polices of the AGC Group. AGC’s Aspirations for 2020 AGC Group aspires to excel as a highly proﬁ table and fast- growing global enterprise making contributions to a sustainable society by: Having strong and differentiated technologies Giving consideration to environmental friendliness not only of products but also for overall production processes and business activities Contributing to the development of fast-growing regions • • • 2 AGC Report 2010 Building Foundations for Growth to Become a Truly Leading Global Enterprise (cid:4) Second round of globalization – As a global company, we will also contribute to the To achieve our aspirations for 2020, we will implement measures growth of emerging regions. focusing on the following three points. The AGC Group will further enhance businesses in developed regions including Japan, Europe and North America and will also (cid:2) Delivering technology solutions for climate change expand operations in fast-growing regions. In addition to the areas – We will give due consideration to the environment in all where we have already established bases such as China, Russia, our business operations. India, and Southeast Asia, we will take on the challenge of starting Although climate change is a serious issue that could threaten businesses in the countries and regions we have yet to enter and the business continuity of the AGC Group, it also provides a will contribute to the development of local communities through great opportunity for us to contribute to society through our our business activities. In furthering our business in fast-growing business. Recognizing our responsibility as a glass manufacturer regions, we will consider the use of global human resources and belonging to an industry that consumes great volumes of the establishment of a business model that differs from those used energy, we earnestly strive to reduce energy consumption in in developed regions. our manufacturing processes. For example, we are developing technologies that will halve the energy consumption during the production process. Achieving signiﬁ cant energy-savings through Bringing Our People and Organization Together under the Slogan of “Our People are Our Strength” technological innovations can minimize environmental burden and It is indeed “our people” that actually perform various tasks drastically reduce costs at the same time. Moreover we are now necessary to build a growth foundation for the Group, tackling developing materials and parts for photovoltaic devices which can problem-solving and any other issues. Recognizing this, we offer enhance power generation efﬁ ciency and highly energy-saving sufﬁ cient growth opportunities to employees who have high glass by taking advantage of our glass, chemical, and ceramics motivation toward their own growth and are highly committed to technologies. By promoting these products worldwide, we will their work. As the staff gain experience through such opportunities, deliver technology solutions for climate change. they will be able to tackle more challenging tasks and this in turn (cid:3) Glass-technology-driven company will allow them to grow further. In addition, the AGC Group employs approximately 50,000 employees. One of our strength is that these – We will meet new needs through our strong and employees are working in some 30 countries and regions with differentiated technologies. different commercial practices and social needs. Each employee The AGC Group will further differentiate our businesses by reﬁ ning will adopt and follow the four Shared Values in the Group Vision our core technologies. For example, we will advance our glass and fulﬁ ll their social responsibilities in their technology to produce high added-value and energy-saving respective countries and regions, as well as provide products and glass products. Moreover, by integrating our glass, chemical, and services with high added value. Through this approach, we are ceramics technologies in a more proactive manner, we will provide aiming at becoming a true, leading global company which society our customers with products of higher value. expects further growth. Kazuhiko Ishimura President & CEO AGC Report 2010 3 AGC Group Vision Through unceasing reform and innovation, we will accelerate growth under unifi ed global management. To this end, all members of the AGC Group around the world share our Group Vision and continue to work in unison to take on new challenges. We, the AGC Group, “Look Beyond” to make the world a brighter place. As a global materials and components supplier, based on our core technologies in glass, ﬂ uorine chemistry and their related ﬁ elds, we will continue to: … Anticipate and envision the future, … Have perspectives beyond our own fi elds of expertise and … Pursue innovations, not becoming complacent with the status quo. By “Looking Beyond,” we will continue to create value worldwide, demonstrating the vast potential of the Group’s entire organization. Our Shared Values Our four Shared Values are to be adopted and followed by all members of the Group and are of the foremost importance in accomplishing Our Mission. These Shared Values, described below, will serve as the basis for every judgment we make and action we take collectively and individually. Innovation & Operational Excellence We will continuously pursue innovations in technology, products, services, business models and human resources. We will continuously improve our operations for maximum efﬁ ciency and quality in every activity and at all times strive for the highest possible standard of performance. Diversity We will respect individuals with different cultures, capabilities and personalities, and our global management will operate without regard to nationality, gender or background. Environment We, as good global citizens, will shoulder the responsibility to contribute to a sustainable society in harmony with nature. Integrity We will build open and fair relationships with all of our stakeholders based on the highest ethical standards. Innovation & Operational Excellence Diversity Integrity Environment 4 AGC Report 2010 Management Policy The AGC Group will closely look at mid- to long-term changes in the market and respond to them in a timely manner to continue to grow further as a leading global company. The Management Policy has been formulated to lead the Group’s endeavors toward this end. means “grow and change” beyond conventional frameworks such as business areas, regions, markets and existing technologies. It places top priority on building the next foundations for growth. Accelerating Measures To address such signiﬁ cant structural changes in the market, the AGC Group believes that we must contribute to the creation of a “Sustainable Society” which, as we realized, is indispensable from a comprehensive global viewpoint. The AGC Group has clearly deﬁ ned “Aspirations for 2020” as its future image. By using it as a powerful guideline, we will accelerate our measures. AGC’s Aspirations for 2020 AGC Group aspires to excel as a highly profitable and fast-growing global enterprise making contributions to a sustainable society by: • • Having strong and differentiated technologies Giving consideration to environmental friendliness not only of products but also for overall production processes and business activities Contributing to the development of fast-growing regions • AGC’s Aspirations for 2020 Second Round of Globalization Build Foundations for Growth Build Foundations for Growth Build foundations for the growth of the AGC Group, Build foundations for the growth of the AGC Group, looking at medium- and long-term looking at medium- and long-term structural changes in the global market. structural changes in the global market. Delivering Technology Solutions for Climate Change Glass-Technology-Driven Company Embed the “JIKKO” mindset as the AGC Group’s DNA Our People are Our Strength – Realize the full potential of our people Aiming to meet “Aspirations for 2020,” we will work on building foundations for growth from three perspectives: “glass-technology- driven company,” “delivering technology solutions for climate change” and “second round of globalization.” Speciﬁ cally, to become a glass-technology-driven company, the Group will advance our glass technologies, as well as promote business differentiation by integrating the Group’s core technologies in glass, chemicals, and ceramics. In addition, the Group will deliver technological solutions for climate change by achieving energy conservation in production processes and providing products based on our core technologies. Besides, the Group will push forward with a second round of globalization by proactively expanding business in emerging markets, while further enhancing proﬁ tability in the mature markets of Japan, Europe, and North America. In order to build the foundations for growth, we will ﬁ rmly establish and thoroughly imbue the mindset of the former management policy “JIKKO” as the DNA of the AGC Group. And, placing importance on “our people” who actually carry out all the work, we set the slogan “Our People are Our Strength.” Under this slogan, the AGC Group aims to become a corporate group in which each employee exerts their full potential, and the growth of the people and the growth of the organization can nourish each other in a virtuous cycle. AGC Report 2010 5 New Medium-Term Management Plan “Grow Beyond-2012” The AGC Group has announced the establishment of a new medium-term management plan (MTP) for the Group entitled ized during the Group’s for the fi scal years 2010 to 2012. This follows the foundations for growth real- MTP. Both MTPs derive from the Group’s management policy MTP refl ects the Group’s confi dence that . The adoption of this new it has completed the reforms necessary to cope with the rapid and signifi cant change in its business environment and embodies a confi dence that the worst of declines are past in the world economy. Tasks in Under our new medium-term management plan, , the AGC Group regards the next three years to be a period for ensuring growth. The ﬁ rst task of is a full-ﬂ edged recovery of the company performance. The Group aims to attain the highest level of business performance, and by leveraging the cash ﬂ ows generated through optimum performance, we will measures and ensuring our proceed with the ﬁ nancial strength at the same time. The second task is accelerating measures. The Group will promote measures to build a foundation for growth by focusing on the following three themes using the Group’s core technologies in glass, chemicals, and ceramics: “glass-technology- driven company”; “delivering technology solutions for climate change”; and engaging in a “second round of globalization.” Investment Plan and Financial Targets To address those tasks, the AGC Group plans to make capital expenditures totaling 450.0 billion yen over three years. In addition, the Group will proactively examine the possibility for investments and loans for M&A activities and strategic business alliances. Further, we will allocate 150.0 billion yen (three year total) to R&D activities with the particular focus on the development of energy- related businesses and electronic materials. • • Investment Plan Capital expenditure: 450.0 billion yen (total for three years) In addition to capital expenditure, the Group will proactively examine the possibility for M&As and strategic business alliances. • R&D expenses: 150.0 billion yen (total for three years) R&D Tasks in • • Achieve full-ﬂ edged recovery of the company performance Accelerate measures Through these efforts, the AGC Group aims at achieving ROE (Return on Equity) of 12% or more and a D/E ratio (Debt/Equity ratio) of 0.5 or less. Financial targets • • ROE of 12% or more D/E ratio of 0.5 or less Group Vision and Management Policy, New Medium-Term Management Plan 2012 2011 2006 2009 2010 2007 2008 Group Vision Management Policy Execution for Excellence Action Plan (Medium-Term Management Plan) Start afresh under a new structure 6 AGC Report 2010 Principal Measures of by Business Glass Business The AGC Group aims at continuing to be a global leader by maintaining a solid presence in developed countries and by aggressively expanding business in emerging countries. The AGC Group considers that demand for both architectural and automotive glass bottomed out in 2009 and will recover with the growth of emerging markets such as China, but recovery in developed countries will be slow. Given such an environment, the AGC Group will enhance its cost competitiveness by radically improving productivity and production yields, while continuing to adjust the capacity utilization rate of its facilities in response to the demand. We will promote development and production of high added-value products such as solar products, and press ahead with developing and expanding sales of eco-friendly glass products that meet the needs of each region. Solar-related Business We will make concerted efforts throughout the Group to develop, manufacture, and sell solar-related components. concentrating solar power generation systems is also expected to expand rapidly. While growth of the solar power market slowed slightly due to the inﬂ uence of the economic crisis, it is getting back on track for strong growth. In addition to the solar power market, the market for In these markets, the AGC Group will work to develop, manufacture, and sell not only glass but also solar-related components, using the Group’s technologies in glass, chemicals, and ceramics. Electronics and Display Business In the display business, the AGC Group will build a fl exible production system. The AGC Group will respond to the FPD market, which is expected to grow at an annual average rate of 10% or more, by increasing productivity and production yields of existing facilities and making new investments. In addition, we will respond to the expanding production of FPD panels in China. In the electronics materials business, we will focus further on building mass-production increasing productivity and production yields. technology and The semiconductor-related market is considered to have bottomed out in 2009 and is currently heading toward recovery. The personal computer (PC) market is expected to continue growing at an annual average rate on the order of 10%. In response to growth in these markets, we will strive to develop mass-production technologies and increase productivity and production yields. We will accelerate releases of new products by capitalizing on our marketing and development capabilities. We will accelerate releases of new products in such ﬁ elds as energy, display, semiconductor/electronic components, and lighting by differentiating our products with our special glass and chemicals technologies, and proactively capturing needs for glass, which are diversifying and growing at an accelerating pace. Chemicals Business The AGC Group will strengthen its business competitiveness by improving productivity, such as by consolidating production bases for intermediate ﬂ uorine materials, and taking other measures. In addition, the Group will focus on expanding sales of products in environment- and energy-related markets including solar-related components, ﬂ uorochemicals, and urethane products that have smaller effects on the environment. In Asia, we will enhance the capacities of facilities for basic chemicals by capturing market growth and boost sales of ﬂ uorine chemicals that meet the needs of emerging markets. Ceramics Business Taking advantage of possessing the ceramics technologies, the AGC Group will contribute to the development of glass-related businesses by extending the operating lives of facilities, differentiating products through higher quality, and developing furnace materials that improve production yields. The Group will also focus on expanding sales in the environment and energy ﬁ elds, including solar-related components. AGC Report 2010 7 Feature1An Important Part of the World We Live In The AGC Group Makes Group-Wide Efforts to Improve the Technology of Solar Power Generation to Contribute to the Climate Change Issues. *For illustrative purpose only 8 8 AGC Report 2010 AGC Report 2010 Products that reduce solar power generation costs Improving power generation efﬁ ciency Photovoltaic cover glass Photovoltaic cover glass is designed to cover the light-receiving surface of a pho- tovoltaic module. Our products use high transmittance glass so that the sunlight of the entire spectrum can be efﬁ ciently captured into the photovoltaic cell layer. We also offer cover glass with antireﬂ ec- tion coating on the surface to boost the transmittance. Improving power generation efﬁ ciency Glass substrates with TCO ﬁ lm for thin- ﬁ lm silicon photovoltaic module In a thin-ﬁ lm silicon photovoltaic module, glass substrates coated with TCO ﬁ lm serve as the light-receiving electrodes and have both the function to efﬁ ciently capture effective wavelength light into photovoltaic cells as well as the function to work as conductor to efﬁ ciently bring out generated electrical energy. The AGC Group’s Type HU TCO ﬁ lm can efﬁ ciently conﬁ ne light to the photovoltaic cells due to its high diffusivity (haze rate) up to 90% of incom- ing sunlight. Improving durability Fluoropolymer ﬁ lm for backing sheets AGC’s ﬂ uoropolymer ﬁ lms have excellent weatherability and they do not deteriorate even if left outdoors for a long time. This feature contributes to improving the photo- voltaic modules’ durability. Another feature of this product is its light weight, which helps reduce the weight of photovoltaic modules. Improving productivity Sputtering targets for electrodes The sputtering targets are used to fabri- cate TCO ﬁ lms, which are used as elec- trodes on photovoltaic cells. By stabilizing electrical discharge during ﬁ lm deposition, they produce high-quality thin ﬁ lm very efﬁ ciently. The AGC Group supplies leading manufacturers of the CSP (Concentrating Solar Power) system with high transmittance glass and highly reﬂ ective mirrors that maximize the energy collection of the solar concentrator. Contributing to improvements of power generation efﬁ ciency, durability, and productivity of solar power generation system Japan and many other countries in the world are actively promoting the introduction of photovoltaic modules to prevent climate change. An outstanding feature of photovoltaic modules is that CO2, which causes global warming, is not emitted during the power generation process. By reducing power generation costs, photovoltaic modules are expected to be used more widely in the world. In order to reduce power generation costs of photovoltaic modules, the AGC Group has been developing products to improve the power generation efﬁ ciency, durability, and productivity of photovoltaic modules by leveraging its core technologies in glass, chemicals and ceramics. We provide “photovoltaic cover glass with antireﬂ ection coating” and “glass substrates with transparent conductive oxide (TCO) ﬁ lms” to improve power generation efﬁ ciency, “ﬂ uoropolymer ﬁ lm for backing sheets” to improve durability, and “sputtering targets for electrodes” to improve productivity. In a bid to popularize solar power generation, we showcased our technologies and products to reduce power generation costs at the International Photovoltaic Power Generation Expo (PV EXPO) held in March, 2010. In addition, we have begun providing “highly reﬂ ective mirrors” that can concentrate sunlight very efﬁ ciently. We also make a technological contribution to the wide adoption of solar thermal power generation, which is expected to be increasingly introduced in desert areas that enjoy a large amount of direct insolation. AGC exhibition booth at International Photovoltaic Power Generation Expo (PV EXPO) held in March, 2010. AGC Report 2010 AGC Report 2010 9 9 Feature2An Important Part of the World We Live In LUMIFLONTM Protects the Beauty of the Tokyo Sky Tree, the World’s Tallest Broadcasting Tower at 634 Meters. The Tokyo Sky Tree The Tokyo Sky Tree is being constructed in Mukojima in Tokyo’s Sumida Ward as a new symbol of Tokyo. It is expected to be used for various purposes including as a broadcasting tower for terrestrial digital television and as an observation tower offering breathtaking sights of Tokyo from a whole new perspective. Construction client: Tobu Tower Sky Tree Co., Ltd.; Constructor: Obayashi Corporation 完成予想図 10 AGC Report 2010 Major examples of LUMIFLONTM usage Burj Al Arab At 321 meters tall, the Burj Al Arab is one of the world’s tallest as well as most luxurious hotels. As a high- weatherability ﬂ uoropolymer for coatings, LUMIFLON pro- tects high-rise buildings from ultraviolet rays. Photo by Satoru Mishima, Nikkei BP Marunouchi Building LUMIFLON is also used on buildings in Marunouchi, one of the main business districts in Tokyo. Rainbow Bridge In harsh natural environments like the sea surface, LUMIFLON protects the bridge’s framework from chloride damage and helps bridges maintain their beauty. Passenger Aircraft LUMIFLON is also used in aircraft and helps maintain high gloss and color. AGC Report 2010 11 A windmill protected by LUMIFLON LUMIFLONTM Coating Protects Materials and Maintains Aesthetic Look The Tokyo Sky Tree is currently under construction and is scheduled to be completed in 2011. When completed at a planned height of 634 meters, it will become the tallest broadcasting tower in the world. Because the exterior cannot regularly undergo maintenance, the tower needs a coating with excellent corrosion resistance and weatherability properties that will not deteriorate for a long time. the more than 20 years since LUMIFLON is a high-weatherability ﬂ uoropolymer for coatings, which was developed using the AGC Group’s ﬂ uorochemical technology. During its commercialization in 1982, the material has won trust as a maintenance-free coating. It also won high praise for its ability to reduce total volatile organic compound (VOC) emissions over the long-term. These features led to LUMIFLON being adopted for The Tokyo Sky Tree. Compared to polyurethane resins, which need to be reapplied roughly every seven years, coatings using LUMIFLON need only to be reapplied every 25 years. LUMIFLON has been adopted in more than 200,000 projects of large-scale structures such as skyscrapers and bridges over the ocean as well as aircraft and vehicles, mainly in Japan. In the future, overseas business is expected to increase as the advantages of LUMIFLON resins become known. Testing LUMIFLON’s weatherability on a bridge. A bridge beam (in its 16th year) without LUMIFLON coating A bridge beam (in its 21st year) with LUMIFLON coating Research & Development Research & Development Creating the Future of the AGC Group Since its foundation, the AGC Group has developed its core technologies centered on glass, fl uorine chemistry and ceramics technologies. The AGC Group looks at various trends with a long-term vision, sets the direction of our technology strategy, and is striving to build the foundations for growth set forth in through sophistication, combination and application of our core technologies. Technology Outlook and Technology Roadmap, which deﬁ ne the direction of technology strategies In addition to mid- to long-term business strategies, the AGC Group formulates a Technology Roadmap based on our Technol- ogy Outlook that looks at various trends with a long-term vision in areas such as energy, resources and population, and thereby sets the direction of our global technology strategy. Various trends Our direction Technology Outlook Long-term macro trends (global trends) trends in customers’ industries Business strategies Technology Roadmap Current/new business domains Current/new technology domains Carrying out seamless operations ranging from basic research to product development In R&D, the Research Center handles basic, long-term, innova- tive, and inter-business themes, while the Production Technology Center and Engineering Center undertake the development of innovative production technologies and equipment technologies. The Development Centers of each In-House Company enhance production technologies and undertake product development in close contact with customers. In ﬁ scal 2010, the Production Technology Center was separated from both the Research Cen- ter and the Engineering Center in a bid to promote and acceler- ate “Glass-technology-driven company” as one of the founda- tions for growth. Building foundations for growth through sophistication, combination and application of our core technologies The AGC Group positions “glass materials and glass production technologies,” “coating technologies,” “optics and electronics technologies,” “ceramics material technologies” and “ﬂ uorine chemistry technologies,” as well as “fundamental common tech- nologies” that support the above, as its current core technolo- gies. Through sophistication, combination and application of our core technologies, we will work to develop technology for imple- menting “group-wide promotion of solar business,” “measures against climate change” and “glass-technology-driven company” man- as the foundations for growth set forth in our agement policy. Technology strategy R & D Structure Foundation/Basic Technology Materials development: Research Center Production technology: Production Technology Center Equipment technology: Engineering Center n o i t a r o b a l l o C Commercialization technology Enhanced production technology Development Centers of each In-House Company Core technologies of the AGC Group and foundations for growth set forth in Core technologies Glass materials and glass production technologies Coating technologies Optics and electronics technologies Ceramics materials technologies Fluorine and other chemistry technologies Fundamental common technologies Glass materials design Dry coating Liquid crystal materials Refractory lining Glass manufacturing Wet coating Photolithog- raphy Fine ceramics Glass forming and processing Patterning Assembly Fluorine chemistry Electro- chemistry Equipment Sensing Inorganic materials Evaluation and analysis Optical design Nanomaterials Simulation Group-wide promotion of solar business ◎ Glass- technology-driven company ◎ ◎ ○ Measures against climate change ◎ ◎ ○ ○ ○ ○ ◎ ◎ ◎ ○ ○ ◎ ○ ○ 12 AGC Report 2010 E F D A Micro glass lenses B Jigs for manufacturing semiconductors (Silicon carbide) C TFT LCD glass substrates D Plasma in an in-ﬂ ight melting furnace E Ceramics sputtering target F Fluorinated water/oil-repellent coating material B C A Foundations for growth : Future business domains Group-wide promotion of solar business Improving the effi ciency of solar power generation Glass substrates with TCO fi lm for thin-fi lm silicon photovoltaic module This film scatters light by means of their surface concavoconvex texture, to conduct more light into the photovoltaic layer for higher power generation efﬁ ciency. Glass mirrors for solar thermal generation We provide high transmittance glass and highly reflective mirrors that maximize the energy reﬂ ectance of solar concentrators for solar thermal power generation system. Glass-technology-driven company Photovoltaic cover glass Concentrating solar thermal power generation system (highly reﬂ ective mirror) Improving the energy effi ciency of the glass production process Total Oxygen Combustion Method By sending only oxygen to a glass melting furnace, it will reduce nitrogen oxide emissions and improve energy efﬁ ciency. In-fl ight melting technology Granulated raw material mixtures a re i n j e c t e d i n t o a f u r n a c e a n d i n s t a n t a n e o u s l y m e l t e d b y a combustion flame or plasma. This technology will enable halving CO2 emissions and energy consumption during the production process. Raw materials Conventional furnace Combustion burner Melting In-flight melting furnace Granulated raw materials Raw materials High-speed refining i h g H / g n i t l e m t h g i l f - n g n i r r i t s d e e p s Measures against climate change Refining To forming process I To forming process CO2 recycling in the glass production process Creating soda ash (a material used mainly for glass products) from CO2 in the production process Exhaust gas CO2 Electrolysis Injection Environmentally friendly products Architectural glass (improves air conditioning effi ciency) Automotive glass (improves fuel effi ciency, responds to Eco-Cars) Chemicals recycling (collection and decomposition of greenhouse gasses) Reducing the environmental impact of fl uorinated products Coolants with zero ODP (Ozone Depletion Potential) Coolants with one-digit Global Warming Potential (GWP) Caustic soda Plant Glass products Recycling Soda ash The CO2 recycling system in the glass production process Low-E double- glazed glass featuring high insulation and heat-shielding properties Automotive glass Coolants with zero Ozone Depletion Potential (ODP) ASAHIKLIN AE-3000 AGC Report 2010 13 AGC Group Now To foster a deeper and clearer understanding of the AGC Group, we introduce our recent overall business-related activities in the following section. This includes a review of our business results for the fiscal year ended December 31, 2009, and an overview of each business segment, as well as a description of our corporate social responsibility (CSR) initiatives. Marunouchi Park Building 14 AGC Report 2010 Corporate Data • Name ・・・・・・・・・・・・・・・・・・・・・・ Asahi Glass Co., Ltd. • Head Ofﬁ ce ・・・・・・・・・・・・・・・・・・ 1-12-1, Yurakucho, Chiyoda-ku, Tokyo 100-8405 JAPAN • Founded ・・・・・・・・・・・・・・・・・・・・ September 8, 1907 • Incorporated ・・・・・・・・・・・・・・・・・ June 1, 1950 • Capital ・・・・・・・・・・・・・・・・・・・・・・ 90,873 million yen • Outstanding stock ・・・・・・・・・・・・・ 1,186,705,905 shares • Employees ・・・・・・・・・・・・・・・・・・・ 6,330 (non-consolidated) 47,618 (consolidated) • Consolidated Group companies ・・・ 178 (141 overseas) ・・・・・・・ As of the end of December 2009 Organization Data Corporate Auditors Board of Directors Management Committee Group Corporate Shared Service Centers, Research Center, etc. Glass Company Electronics Company Chemicals Company AGC Ceramics Co., Ltd. Consolidated Financial Highlights Net sales ¥1,148.2 billion Operating income ¥86.7 billion Net income ¥20.0 billion Total assets ¥1,781.9 billion (billions of yen) 1,681.2 1,444.3 Operating income (billions of yen) Operating income margin (%) 197.5 154.0 11.7% 10.7% (billions of yen) 69.6 39.2 Total assets (billions of yen) Net assets (billions of yen) 2,108.1 1,832.8 7.5% 1,027.3 780.9 808.3 ’07/12 ’08/12 ’09/12 ’07/12 ’08/12 ’09/12 ’07/12 ’08/12 ’09/12 ’07/12 ’08/12 ’09/12 AGC Report 2010 15 AGC Group around the World As a global supplier of materials including glass, electronic materials, chemicals and ceramics, the AGC Group carries out its business activities in Japan, Asia, Europe and North America, backed by approximately 50,000 employees in roughly 30 countries and regions worldwide. ●●● ● ● ●●●●●●●●● ●●●●●● ● ● ●●●●● ◉ Asahi Glass Co., Ltd. ●●●●●●●● ●●●● ●●●●●●●●● ● ●●●●● ●● ●● ● ●●●●●● ● ●●● ● ●● ●● ●●● ● ● ● ● ● ● ● ● AGC Global Network ◉ Japan Asahi Glass Co., Ltd. ● AGC Glass Kenzai Co., Ltd. ● AGC Okinawa Glass Kenzai Co., Ltd. ● AGC Glass Products Co., Ltd. ● AGC Amenitech Co., Ltd. ● AGC Fabritech Co., Ltd. ● AGC Automotive AMC Co., Ltd. ● AGC Automotive ACC Co., Ltd. ● AGC Automotive Takahashi Co., Ltd. ● AGC Display Glass Yonezawa Co., Ltd. ● AGC Electronics Co., Ltd. ● AGC Techno Glass Co., Ltd. ● AGC Micro Glass Co., Ltd. ● Ise Chemicals Corporation ● AGC Si-Tech Co., Ltd. ● AGC Engineering Co., Ltd. ● AGC Seimi Chemical Co., Ltd. ● AGC Coat-Tech Co., Ltd. ● AGC Polymer Material Co., Ltd. ● AGC Green-Tech Co., Ltd. ● AGC Wakasa Chemicals Co., Ltd. ● AGC Matex Co., Ltd. ● AGC Ceramics Co., Ltd. ● AGC Research Institute Co., Ltd. ● AGC Insurance Management Co., Ltd. ● AGC Finance Co., Ltd. ● AGC Logistics Co., Ltd. ● AGC Technology Solutions Co., Ltd. 16 AGC Report 2010 Asia Thailand ● AGC Flat Glass (Thailand) Public Co., Ltd. ● AGC Automotive (Thailand) Co., Ltd. ● AGC Electronics (Thailand) Co., Ltd. ● AGC Techno Glass (Thailand) Co., Ltd. ● AGC Micro Glass (Thailand) Co., Ltd. ● AGC Chemicals (Thailand) Co., Ltd. ● AGC Technology Solutions (Thailand) Co., Ltd. Indonesia ● P.T. Asahimas Flat Glass, Tbk ● P.T. Asahimas Chemical Singapore ● AGC Flat Glass Asia Paciﬁ c Pte. Ltd. ● AGC Electronics Singapore Pte. Ltd. ● AGC Chemicals Asia Paciﬁ c Pte. Ltd. ● AGC Singapore Services Pte. Ltd. Malaysia ● AGC Flat Glass (Malaysia) Sdn. Bhd. ● MCIS Safety Glass Sdn. Bhd. The Philippines ● AGC Flat Glass Philippines, Inc. ● AGC Automotive Philippines, Inc. Taiwan ● AGC Display Glass Taiwan Co., Ltd. ● AGC Electronics Taiwan Co., Ltd. India ● Asahi India Glass Co., Ltd. China ● AGC Flat Glass (Dalian) Co., Ltd. ● AGC Flat Glass (Suzhou) Co., Ltd. ● AGC Flat Glass Protech (Shenzhen) Co., Ltd. ● AGC Flat Glass (Hong Kong) Co., Ltd. ● AGC Automotive China Co., Ltd. ● AGC Automotive Foshan Co., Ltd. ● AGC Chemicals Trading (Shanghai) Co., Ltd. ● Zibo Asahi Glass Alumina Materials Co., Ltd. ● Zibo GT Industrial Ceramics Co., Ltd. ● Plibrico (Dalian) Industries Co., Ltd. ● AGC Shanghai Co., Ltd. Korea ● Korea Autoglass Corporation ● Hankuk Electric Glass Co., Ltd. ● Hanwook Techno Glass Co., Ltd. ● Asahi Glass Fine Techno Korea Co., Ltd. ● Asahi PD Glass Korea Co., Ltd. ● AGC Display Glass Ochang Co., Ltd. ●● ●●●● ● ● ●●●● Sales by region (consolidated) Europe 17% North America 6% Asia 30% Japan 47% ● Percentage of employees by region (consolidated) Europe 28% Japan 27% North America 8% Asia 38% * Year ended December 2009 * The total percentage of employees does not add up to 100% due to numbers being rounded off. * Sales and operating income by region are before eliminations, therefore the total amounts of sales and operating income for regions do not agree with total sales and operating income. Japan Number of employees: approx. 12,700 Net sales: ¥658.6 billion Operating income: ¥27.5 billion Main business: Flat glass, automotive glass, display glass, electronic materials, chemicals, ceramics Asia Number of employees: approx. 18,000 Net sales: ¥418.0 billion Operating income: ¥78.3 billion Main business: Flat glass, automotive glass, display glass, electronic materials, chemicals, ceramics North America Number of employees: approx. 3,700 Net sales: ¥76.5 billion Operating income: ¥–12.5 billion Main business: Flat glass, automotive glass, electronic materials, chemicals Europe Number of employees: approx. 13,200 Net sales: ¥236.1 billion Operating income: ¥–6.5 billion Main business: Flat glass, automotive glass, chemicals North America The United States ● AGC Flat Glass North America, Inc. ● AGC Soda Corporation ● AGC Automotive Americas Co. ● AGC Automotive Americas R&D, Inc. ● AGC Electronics America ● AGC Chemicals Americas, Inc. ● AGC America, Inc. ● AGC Capital, Inc. ● AGC Investment, Inc. ● AGC Holdings America, Inc. Canada ● AGC Flat Glass North America Ltd. ● AGC Automotive Canada, Inc. Mexico ● AGC Automotive Glass Mexico, S.A. de C.V. Europe Belgium ● AGC Glass Europe ● AGC Flat Glass Roux ● AGC Automotive Europe ● AGC Automotive Belgium ● AGC Europe The Netherlands ● AGC Flat Glass Netherlands B.V. The United Kingdom ● AGC Automotive UK, Ltd. ● AGC Chemicals Europe, Ltd. Italy ● AGC Flat Glass Italia S.r.l ● AGC Automotive Italia S.r.l Spain ● AGC Flat Glass Iberica S.A. Germany ● AGC Automotive Germany Gmbh Hungary ● AGC Automotive Hungary Ltd. Poland ● AGC Gdansk Sp. z o.o. Czech Republic ● AGC Flat Glass Czech a.s., Clen AGC Group ● AGC Automotive Czech a.s. Russia ● OJSC AGC Bor Glassworks ● AGC Flat Glass Vostok LLC ● AGC Flat Glass Klin LLC France ● AGC France Turkey ● AGC Otomotiv Adapazari Üretim, Sanayi Ve Ticaret Anonim Sirketi ● Electronics and Display ● Glass ● Chemicals ● Ceramics ● Others As of end of March 2010, companies such as equity method afﬁ liates that do not incorporate the “AGC” brand in their names are included. AGC Report 2010 17 Outline by Business Segment Glass Operations 2009 Overview Sales in the ﬂ at glass business decreased year-on-year because shipments declined in Japan, North America and Europe while the demand recovered in Asia, notably in China. In Europe, while prices dropped sharply with a slump in demand, the Group adjusted the capacity utilization rate of its facilities to meet the weak demand, and has been trying to restore prices since the second quarter of the year. In the meantime, although the growth in shipments of glass for solar power systems temporarily slowed down, it got back on a recovery track after the middle of the year. In the automotive glass business, shipments began to recover after the middle of the year due to the effect of demand stimulus measures implemented in various countries. However, shipments for the full ﬁ scal year remained at low levels and sales in this business decreased year-on-year. Further, the Group ceased the automotive glass operations at the Kitakyushu Plant in December 2009. As a result, net sales from the Glass operations for the ﬁ scal year was 525.0 billion yen which was 216.3 billion yen or 29.2% decrease year-on-year, and operating loss was 35.0 billion yen which was 53.7 billion yen worse year-on-year. Main Products Flat glass • Float ﬂ at glass, ﬁ gured glass, polished wired glass, heat-absorbing glass, heat-reﬂ ective glass, fabricated glass for architectural use, fabricated glass for industrial use, etc. • Glass for solar power system Automotive glass • Automotive tempered glass, automotive laminated glass, etc. Other glass • Lighting lamp glass products, industrial glass products, etc. Electronics and Display Operations 2009 Overview Sales in the display business increased year-on-year on the strength of the rapid increase in the AGC Group’s shipments from the latter half of the ﬁ rst quarter following a rebound in demand for glass substrates for ﬂ at panel displays (FPDs). In the electronics materials business, although shipments have been recovering gradually since the second half of the year, shipments for the full ﬁ scal year remained at low levels and sales decreased year-on-year. As a result, net sales from the Electronics and Display operations for the ﬁ scal year was 369.3 billion yen which was 3.4 billion yen or 0.9% decrease year-on-year, and operating income was 126.9 billion yen which was 0.4 billion yen or 0.3% increase year-on-year. Main Products Display • LCD glass substrates, PDP glass substrates, glass bulbs for cathode-ray tubes, etc. Electronic materials • Glass frit and paste, materials for semiconductor manufacturing equipment, synthetic quartz glass, optoelectronics materials, optical ﬁ lters for PDPs, LCD designed front glass, LCD backlight glass tubes, optical membranes, etc. Share of sales 45.5% Year ended December 2009 Sales to customers Net Sales/Operating Income Net sales (billions of yen) Operating income (billions of yen) 1,000 800 600 400 200 0 63.7 866.0 741.3 18.7 525.0 75 50 25 0 -25 2007/12 2008/12 -35.0 2009/12 (Year/month) -50 Share of sales 32.1% Year ended December 2009 Sales to customers Net Sales/Operating Income Net sales (billions of yen) Operating income (billions of yen) 500 400 300 200 100 0 465.2 118.2 126.6 126.9 372.7 369.3 150 120 90 60 30 2007/12 2008/12 0 2009/12 (Year/month) 18 AGC Report 2010 Chemicals Operations 2009 Overview In the chlor-alkali & urethane business, sales decreased year-on-year. Shipments in Asia remained robust over the course of the year. Meanwhile, shipments in Japan dropped compared with the previous ﬁ scal year but have been picking up gradually since the middle of the year. In the ﬂ uorochemicals & specialty chemicals business, shipments of ﬂ uoropolymers dropped sharply in particular and sales decreased compared with the previous ﬁ scal year. As a result, net sales from the Chemicals operations for the ﬁ scal year was 233.7 billion yen which was 69.4 billion yen or 22.9% decrease year-on-year, and operating loss was 7.7 billion yen which was 11.6 billion yen worse year-on-year. Main Products Chlor-alkali & urethane • Vinyl chloride monomers, caustic soda, urethane materials, gases, solvents, etc. Fluorochemicals & specialty chemicals • Fluoropolymers, water and oil repellents, battery materials, iodine-related materials, etc. Other Operations 2009 Overview In the ceramics business, sales decreased year-on-year due to the decline in demand both in the glass engineering market and in the environmental energy market. As a result, net sales from the Other operations for the ﬁ scal year was 68.9 billion yen which was 27.7 billion yen or 28.7% decrease year-on-year, and operating income was 2.0 billion yen which was 3.0 billion yen or 59.4% decrease year-on-year. Main Products Ceramics products, etc. Logistics services, ﬁ nancial services Share of sales 20.1% Year ended December 2009 Sales to customers Net Sales/Operating Income Net sales (billions of yen) Operating income (billions of yen) 400 320 240 160 80 0 12.4 319.4 15 10 5 0 -5 303.1 3.9 233.7 -7.7 2007/12 2008/12 -10 2009/12 (Year/month) Share of sales 2.3% Year ended December 2009 Sales to customers Net Sales/Operating Income Net sales (billions of yen) Operating income (billions of yen) 100 80 60 40 20 0 96.6 5.0 87.6 3.2 8 6 4 2 68.9 2.0 2007/12 2008/12 0 2009/12 (Year/month) AGC Report 2010 19 Business Overview Glass Operations Glass Operations covers businesses with focus on fl at glass and its use in architectural, automotive, and solar (photovoltaic) fi elds and maintains a lead- ing share in these fi elds on a global basis. The archi- tectural fl at glass business is operated on a regional basis, with regions devising their respective product line-ups matching the particular characteristics of their respective geographic regions. The automotive glass business is characterized by global scale and operation, in line with the requirements of an auto- motive industry that operates on a global basis. • Global market share (AGC estimates) Flat glass ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・No.1 Automotive glass (new vehicle market) ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・No.1 Marunouchi Park Building Low-E double-glazed glass featuring high insulation and heat-shielding properties Low-E double-glazed glass is used in Margaret Hall, Sagami Women’s University Photovoltaic cover glass “Solite™” Color glass for interior surface wall Safety glass for automobile windshields that will hold together when shattered Tempered glass for automobile side windows, shock-resistant and specially treated to shatter into granules if broken 20 AGC Report 2010 As part of our business foundation, we constantly strive to meet customer needs for superior performance by providing an extensive line-up of products, with a leading global share. The AGC Group currently operates approximately 40 ﬂ oat glass furnaces around the world, supplying a wide variety of glass products to markets in Europe, North America, Japan and Asia. In 2009, the AGC Group integrated its ﬂ at glass business and automotive glass business to enhance its global manufacturing and supply structure through seamless production and operation ranging from raw glass production, processing and making into ﬁ nal glass products. In the Glass Operations, the AGC Group undertakes manufacturing of glass in an environment-friendly manner through efﬁ cient processes that have minimal impact on the environment. The Group has a well-focused marketing network to promote the use of glass products matching the local trends and characteristics of geographic regions. “Benchmarking” and “Sharing of Best Practices” are the regular features that are being promoted in the pursuit of “Continuous Improvement” across the Group. The AGC Group also actively promotes the production and wide adoption of glass for photovoltaic and concentrating solar power generation use and energy-saving glass (Low-E double- glazed glass), thus targeting to expand business by responding to growing demands from emerging markets. For automotive glass, the Group provides high-quality products and services through its global network in a timely manner to the global production bases of automakers. The business includes development and provision of high added-value products to be used for compact cars and ecologically friendly cars. PairPlus™: Ecoglass for remodeling Photovoltaic TCO*1 glass substrates CoolverreTM : contributing to improved energy-saving perfor- mance of automobiles Normal windshields Glass that blocks ultraviolet rays(UV) and infrared rays(IR) Glass Glazing beads incorporated into the attachment Existing sash UV Glass IR(cause the skin to sense frizzling heat) “PairPlus™” is glass that incorporates an attachment frame into double glazing so that the unit can be installed in a single glazing sash used in an existing house. Glass substrates with TCO ﬁ lms which function as electrodes for thin-ﬁ lm silicon photovoltaic module. *1 TCO: Transparent Conductive Oxide Interlayer ﬁ lm Interlayer ﬁ lm + IR absorbent Coolverre™ is a thermal insulating laminated glass for automotives that blocks infrared rays (IR) and ultraviolet rays (UV). TOPICS Going ahead of the times —the embedded DTV compatible glass antenna Non-wired, ﬁ re-resistant glass “MybokaTM” contributes to improving the interior environment of buildings In Japan, all analogue broadcasting will be replaced by digital broadcasting in July, 2011. The AGC Group launched volume manufacturing of in-car antennas in July, 2007, going ahead of the times. The antenna is the world’s ﬁ rst glass an- tenna designed under a new concept of the embedded highly receptive sealed type antenna, with distinctive appearance, inside the laminated glass. Its great- est feature is the adoption of the technology that allows the signals received at the embedded antenna to be transmitted to the electrodes on the in-car glass surface with minimum loss. Therefore, the installation can be done without complicated electrical connection setup. It has been used widely as an automotive antenna because it will not sac- riﬁ ce the car-body design and is easier to maintain, more durable and can be lightweight. The “MybokaTM” glass released in December 2009 is a highly ﬁ re-resistant, non-wired glass with enforced thermal resistance. Currently, more than 90% of Japan’s ﬁ re-resistant glass uses wire-reinforced glass. But the shortcoming was that it cannot secure a clear view because the wire blocks visibility. In recent years, as window sizes become larger, there has been an increasing demand for a ﬁ re-resistant glass that offers clear visibility. This is why AGC launched a plant exclusively for “Myboka TM,” and started sales of the product. In addition, by using “MybokaTM” for double-glazing glass and Ecoglass (low-E double-glazed glass), the thermal resistance features on such products can be improved. AGC aims to contribute to preventing global warming and improv- ing the interior environment of buildings by offering highly functional glass. Glass (inner layer) Interlayer Glass (outer layer) Black Ceramics Electrode Sealed type antenna Black Ceramics Structure of the embedded DTV compatible glass antenna Wired glass Myboka™ AGC Report 2010 21 Business Overview Electronics and Display Operations Electronics and Display Operations covers busi- nesses with focus on “display” and “electronic materials.” The display business offers glass for all major types of displays, including thin fi lm transistor liquid crystal displays (TFT LCDs) and plasma dis- play panels (PDPs), and enjoys a leading share of the global market in this area. The electronic materi- als business deals with fi elds, such as optoelectron- ics, storage, and new energy, which are expected to grow remarkably in the years ahead. • Global market share (AGC estimates) Glass substrates for TFT LCDs ・・・・・・・・・・・・・・・・・・・・・・No.2 Glass substrates for PDPs ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・No.1 Glass substrates for TFT LCDs Glass substrates for PDPs Synthetic quartz glass Optical planar devices LCD backlight glass tubes Micro glass lenses 22 AGC Report 2010 We supply materials that are indispensable in numerous industries, and support the advancement of displays and other devices. The AGC Group manufactures glass substrates for various types of displays, mainly thin ﬁ lm transistor liquid crystal displays (TFT LCDs) and glass substrates for plasma display panels (PDPs). The AGC Group will develop and offer products with high added value by responding to various market trends that include increasingly larger-sized LCD panels. The Group will also continue to improve its production system and enhance the productivity of existing facilities, as well as develop new production facilities. The AGC Group is targeting electronics and energy ﬁ elds, focusing on the sectors of “semiconductor process materials,” “display materials,” “photonics components,” “storage materials,” and “energy materials” to cultivate this business as next-generation growth pillars. The Group will endeavor to expand existing businesses and create new businesses by reinforcing its production technologies to provide high added-value products utilizing our strength of integrated production starting from raw materials and through the promotion of R&D in growth areas such as optical planar devices, micro glass lenses for digital cameras and glass substrates for hard disk drives. The structure of LCD Backlight tubes The structure of hard disk drive Magnetic recording film Magnetic head Swing arm Polarizer Color ﬁ lter Liquid crystal Designed front glass Glass substrates Glass substrates for hard disk drive Magnetic disks used to record information on personal computers are made by forming a ﬁ lm of magnetic material on a glass substrate. A high degree of precision is required for this glass substrate, as even a microscopic irregularity will affect the forming of the ﬁ lm. Contributing to the realization of the next-generation micro-fabrication technique, “Nanoimprint” lithography –Developing an environmentally friendly mold release production process– “Nanoimprint” is ready to be mass-produced on a full scale as a next-generation micro-fabrication technique to be employed in electronics production. While it can raise processing precision at low cost, challenges in the past included the problem of how to remove the high-precision substrate from the molded product. Using the AGC Group’s long-accumulated ﬂ uorinated chemical tech- nology as the core, the Group developed various mold-release processes us- ing ﬂ uoropolymer-coating quartz substrates and ﬂ uorinated UV cured resin to replace conventional releasing agents. Because there is no need to use en- vironmentally harmful solvents as releasing agents, this process can reduce environmental impact. We plan to promote this process in the manufacturing processes for light-emitting diodes (LEDs), photovoltaic devices, and semicon- ductors in the future. An example of micro-fabrication using “Nanoimprint” technology TOPICS Launching sales of –a commercial plastic optical ﬁ ber enabling the world’s highest transmission speed TM The AGC Group plans to start sales of FONTEXTM (the name is derived from a word meaning “fountain of light”), a new ﬂ uoropolymer-based plastic opti- cal ﬁ ber (POF), starting July 2010. FONTEXTM is the world’s ﬁ rst optical ﬁ ber product that combines high-capacity data communication at speeds of 10 Gbps (Gigabit per second) and secure data transmission even when bent, which is something we could never have dreamed of achieving with the existing silica optical ﬁ bers. FONTEXTM is the optimal choice for products that are subject to be handled roughly and require high-capacity data transmission such as wiring displays for high-deﬁ nition televisions and 3D televisions, which have been drawing public attention recently, and connecting peripheral devices to computers. Also, FON- TEXTM is being studied for adoption in the medical ﬁ eld and by data centers because of its feature of generating no electromagnetic noise and consuming little power. In addition, the AGC Group participates as a core member in a research project titled “Plastic optical ﬁ ber for the world’s highest data transmission speed,” which was decided to secure a grant from the “Funding Program for World-Leading Innovative R&D on Science and Technology” provided by the Cabinet Ofﬁ ce of the Japanese Government. We will aim at achieving a further ultra-high transmission speed (40 Gbps or above) on a volume production level. AGC will venture into the markets for home information appliances and other wide-ranging ﬁ elds in the rapidly growing markets for optical cables. We will acceler- ate the release of new products by leverag- ing our marketing and development capa- bilities. Cross-sectional photo of FONTEXTM capable of high-capacity data transmissions AGC Report 2010 23 Business Overview Chemicals Operations and Other Operations Chemicals Operations conducts businesses with focus on “chlor-alkali & urethane” and “fl uorochemi- cals & specialty chemicals,” and it enjoys a lead- ing global share in fl uoropolymers (ETFE) for highly functional fl uoropolymer fi lms and other essential applications. Other operations include ceramics, logistics and engineering businesses. • Global market share (AGC estimates) Fluoropolymers (ETFE) ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・No.1 Munich stadium (an example for application of highly functional ﬂ uoropolymer ﬁ lms) CYTOP™ transparent ﬂ uoropolymers for pellicle coating in semiconductor applications The Akashi Kaikyo Bridge, treated with highly weather- resistant Lumiﬂ on™ ﬂ uoropolymer coating Asahi Guard™ ﬂ uorinated water and oil repellents for coating Flemion™ ion-exchange membranes AFLAS™ ﬂ uoroelastomers Roiceram™-C ﬁ ne ceramics (silicon carbide) 24 AGC Report 2010 We fulfi ll the latest needs through chemical technologies, and develop extensive operations in ceramics, logistics and engineering. Chemicals Operations The AGC Group’s Chemicals Operations was originally established in 1917 to internally supply soda ash, a source material for ﬂ at glass. We are expanding our business domain to include basic chemicals essential to the industry such as caustic soda and hydrochloric acid as well as numerous value-added ﬂ uorinated products applying ﬂ uorochemicals, AGC’s core technology, and urethane- related products by utilizing chlorine, a byproduct of the caustic soda production process. Using the electrolysis of salt water as a base point, the AGC Group carries out integrated manufacturing of products, ranging from basic chemicals to high-performance chemicals. From raw materials to end products, throughout the entire manufacturing process, the Group makes efforts to produce products in an environmentally-friendly manner. The Group’s “chlor-alkali & urethane business” offers such chlor- alkali products as caustic soda, sodium bicarbonate, and vinyl chloride monomer; urethane-related products centering on polyols; as well as gas and solvents. Meanwhile, the “ﬂ uorochemicals & specialty chemicals business” offers ﬂ uorochemicals, mainly ﬂ uoropolymers, ﬂ uoropolymer ﬁ lms, ﬂ uoropolymer for coatings, ﬂ uorinated water and oil repellents, as well as such specialty products as battery materials, liquid crystal materials and ﬁ ne silica. Other Operations The Other operations are composed of the ceramics business and a host of service-related businesses that include logistics and engineering. The ceramics business is strengthening its efforts in the environment and energy ﬁ elds such as developing refractory materials for glass production facilities, solar-related parts and high-performance thermal insulating refractory. Crude salt is the raw material of basic chemicals, which in turn leads to the devel- opment of performance chemicals F-Clean™, a high-performance ﬂ uoropoly- mer ﬁ lm with additional functions for green- house coverings Ceramics sputtering target Fluon® ETFE Film is used in the Japan pavilion at Expo 2010 Shanghai China FRP grating*1 decorates Yokohama Port’s 150th Year TOPICS AGC Group’s high-performance ﬂ uoropolymer ﬁ lm Fluon® ETFE Film is used in the Japan pavilion Zi Can Dao (purple silkworm island) at Expo 2010 Shang- hai China. Fluon® ETFE Film, which is used as a membrane material in this pavilion, is a ﬁ lm produced from high-performance ﬂ uorores, which AGC manufactures through an integrated production process from raw material to ﬁ nal product. Fluon® ETFE Film is widely used because of its excellent heat resistance, chemical resistance, and transparency. It is also used increasingly as a con- struction material, mainly overseas. Japan’s Yokohama Port celebrated its 150th anniversary in 2009. The Zou-no- hana (elephant trunk) area played a central role in the port’s opening and has been redeveloped as Zou-no-hana Park, where a monument was built under the concept of the port’s origins. A ﬁ ber-reinforced plastic (FRP) grating made by AGC Matex has been selected to be a part of the monument, which consists of a vast circle of illuminating screen panels. The combination of the light panels symbolizing the modern age and cast iron louvers giving out a touch of history has won praise from various ﬁ elds. The AGC Group’s FRP grating is strong, light and stainless, and it has won high praise for its design as well. It is used in many buildings and structures, and an increasing interest is being shown in the use for photovoltaic module mounts. In addition, our highly weather-resistant Lumiﬂ on™ ﬂ uoropolymer coating is used on the monument’s body. *1 A lattice-shaped panel using ﬁ ber-reinforced plastic (FRP) The Japan pavilion Zi Can Dao in the Expo 2010 Shanghai China (CG image) “Zou-no-hana Park” decorated with FRP gratings AGC Report 2010 25 AGC Group’s CSR For the AGC Group, the pursuit of its group vision represents the fulfi llment of its CSR. We regard it AGC Group Charter of Corporate Behavior (Extract) our mission to to make the world a brighter ● Integrity: Sincere Behavior place. In accomplishing this mission, all employees of the AGC Group are encouraged to take action based on the Group’s shared values of “Innovation & Operational Excellence,” “Diversity,”“E ● Environment and Safety: With Due Consideration ● Diversity: Respect for People nvironment,” and “Integrity.” We would thereby like to achieve ● Harmony with Society: sustainable growth as a socially trusted corporate group. From“ Responsibility” to“ Reliability” As a declaration of our commitment to achieving this target, we have established the AGC Group Charter of Corporate Be- havior. CSR Activities under AGC Group Charter of Corporate Behavior Integrity: Sincere Behavior Diversity: Respect for People Compliance The AGC Group is committed to increasing the fairness and trans- parency of its business operations, regarding strict compliance as the basis for Our Shared Value, Integrity, and as a premise for its sustainability as a corporate citizen. With Business Partners For the fulﬁ llment of its CSR, the AGC Group believes that it is essential to cooperate with business partners who are the mem- bers of the Group’s supply chain. Based on this belief, we will press forward with CSR measures in cooperation with our busi- ness partners. Quality and Customer Satisfaction (CS) The AGC Group is committed to improving quality in every aspect of its business operations by implementing process reform to im- prove the quality of its products and services in order to increase customer satisfaction and by changing employee’s ways of think- ing based on the idea of incorporating the concept of CS into each employee’s daily work processes. Environment and Safety: With Due Consideration Environmental Activities The AGC Group, being fully aware of the high environmental im- pact of its operations, regards the environment as one of its most important management priorities, and all Group companies are committed to contributing to developing a sustainable society. Industrial Safety & Security The AGC Group has been implementing measures to minimize damage caused by accidents. Speciﬁ cally, we are trying to prevent contingencies (accidents and natural disasters) and to promptly and appropriately take action in the case of actual occurrence. Occupational Health & Safety Based on the policy that “no production should be operated with- out assurance of safety,” the AGC Group is ensuring occupational health and safety at its production sites by applying its Occupa- tional Health and Safety Management System (OHSMS) and se- curing the equipment’s safety. 26 AGC Report 2010 Employee Satisfaction (ES): Employee Job Satisfaction and Pride in Accomplishment The AGC Group relies on the capabilities of its employees as a basis of increasing its corporate value and improves its work envi- ronment to enable all the employees to work with satisfaction and pride in their daily operations and to share mutual respect based on the value of diversity. Harmony with Society: From“ Responsibility” to“ Reliability”　 Social Contribution Activities The AGC Group is engaged in a variety of activities with the aim of contributing to further enhancing a healthier society as a respon- sible corporate citizen. Communication Activities The AGC Group proactively discloses corporate information in a timely and appropriate manner so as to ensure sufﬁ cient commu- nication with our stakeholders. Through such continuing efforts, the AGC Group aims to incorporate your opinions into our CSR activities and gain your understanding and support for our Group- wide activities. For more details, see AGC Group CSR Report 2010 AGC CSR Website http://www.agc.co.jp/english/csr/ Corporate Governance / Internal Control / Risk Management Approach to Corporate Governance As stated in its basic policy on corporate governance, Asahi Glass clearly separates the function of “oversight” and “execution” of management, aiming to reinforce the management oversight function while ensuring quick decision-making in management execution. Under this policy, we have been implementing measures to further improve both our management system and internal control system in order to ensure highly transparent and efﬁ cient management. Corporate Governance Structure AGC Group’s Corporate Governance Structure (Outline)*1 The Board of Directors of Asahi Glass comprised seven directors, including three outside directors. In order to ensure the independence of outside directors, we have established our own selection criteria. We comply with these inhouse criteria as well as the provisions on outside directors set forth in the Companies Act. For the selection and evaluation of directors and executive ofﬁ cers and for their compensation, we have respectively established the Nominating Committee and the Compensation Committee. We entrust these non-statutory advisory committees to deliberate related matters, thereby ensuring the objectivity of any decisions made. As to the compensation of directors (excluding outside directors) and executive ofﬁ cers, we have introduced stock compensation-type stock options allowing them to share beneﬁ ts with shareholders, and have also introduced performance-linked bonuses for executive ofﬁ cers (including directors who serve also as executive ofﬁ cers). Outside directors, on the other hand, are paid only monthly compensation. t n e m e g a n a M i t h g s r e v O n o i t u c e x E s s e n s u B i n o i t a r e p o o C l a u t u M General Meeting of Shareholders Corporate Auditors: 4 Auditors (Including 3 Outside Corporate Auditors) Independent Accountants Board of Directors: 7 Directors (Including 3 Outside Directors) Nominating Committee: 5 Directors (Including 3 Outside Directors) Compensation Committee: 5 Directors (Including 3 Outside Directors) President & CEO Executive Vice President & CTO Senior Executive Officer & CFO Executive Officers Management Committee CSR Committee Compliance Committee Fair Trade Committee Information Management Council Internal Audit Office Group Corporate Security Export Control Headquarters In-house Companies/Strategic Business Units (SBUs)*2 e t a r o p r o C n o i t c n u F p u o r G s n o i t a r e p O s s e n s u B i n o i t c n u F *1. As of March 30, 2010 *2. An In-house Company is deﬁ ned as a business unit with net sales exceeding 200 billion yen which conducts its business globally. At present, there are three In-house Companies: Glass Company, Electronics Company, and Chemicals Company. Business units of smaller sizes are deﬁ ned as Strategic Business Units (SBUs). Internal Control In response to the enforcement of the Companies Act, Asahi Glass decided on its corporate policy over internal control at the Board of Directors meeting held in May 2006, aiming to review its business operation systems, including the compliance system based on the policy, to ensure their appropriateness. After introducing the internal control reporting system in compliance with the Financial Instruments and Exchange Act, we set the AGC Group’s rules for internal control over ﬁ nancial reporting. Based on these rules, we proceeded with the documentation of process-level controls over ﬁ nancial reporting, identiﬁ cation of risks and organization of controls, and assessment of the implementation of controls. We then started the full implementation of internal control over ﬁ nancial reporting in ﬁ scal 2009. Risk Management Based on its corporate policy over internal control, the AGC Group makes it a rule to identify important risk factors and monitor and discuss the state of risk control periodically at meetings of the Management Committee and the Board of Directors. In identifying important risk factors, we conduct questionnaire surveys across the Group to create risk maps and assess risks. The Management Committee and the Board of Directors then discuss the factors at their meetings, and the related organizations formulate action plans to implement the Plan, Do, Check, and Act (PDCA) cycle for the continuous improvement of their risk control levels. Additionally, for important risk factors which might cause large-scale accidents and disasters, we are implementing measures to formulate and operate business continuity plans (BCPs). Speciﬁ cally, we are taking countermeasures against the new type inﬂ uenza and natural disasters such as earthquakes. Internal Audit The AGC Group has established a global internal audit system to manage its organization in Asia including Japan, Europe and North America. Through this system, independent monitoring is conducted on internal control and risk management measures implemented throughout the Group’s organizations in the regions to ensure the effectiveness and efﬁ ciency of the measures. Under this system, the audit departments in each region monitor the progress made in establishing systems of internal control and risk management within their regions, and the legality and rationality of the implementation of the above systems for further improvement. The internal audit results are reported to the AGC Group’s CEO as necessary as well as its Board of Directors on a periodic basis. CSR Promotion System The AGC Group established its CSR Committee in 2005. This Committee, which serves as an organization to lead the fulﬁ llment of CSR by the Group, is chaired by the CEO and composed of the CTO, CFO, and the heads of the in-house organizations. It discusses the Group’s CSR- related policies and issues. In addition, the Group Corporate CSR Ofﬁ ce, which is led by a dedicated executive ofﬁ cer, serves as the secretariat for the Committee and its monthly meetings, while taking charge of CSR activity planning and CSR communications for the entire Group. AGC Report 2010 27 Board of Directors, Corporate Auditors and Executive Ofﬁ cers Board of Directors Masahiro Kadomatsu Chairman of the Board Kazuhiko Ishimura Representative Director President & CEO Katsuhisa Kato Representative Director Executive Vice President & CTO Takashi Fujino Director Senior Executive Offi cer & CFO Kunihiro Matsuo Director (Outside) Attorney At Law, Kunihiro Matsuo Law Offi ce Hajime Sawabe Director (Outside) Representative Director Chairman, TDK Corporation Toru Nagashima Director (Outside) Chairman of the Board, Teijin Limited Executive Ofﬁ cers • President & CEO Kazuhiko Ishimura CEO; GM of Group Strategy Offi ce • Senior Executive Vice Presidents Yuji Nishimi President of Electronics Company Akio Endo President of Glass Company • Executive Vice President Katsuhisa Kato CTO; Deputy GM of Group Strategy Offi ce • Senior Executive Ofﬁ cers Kei Yonamoto Vice President, Automotive, Glass Company Shukichi Umemoto GM of Finance & Control Offi ce Yasutoshi Hirata GM of Human Resources & Administration Offi ce Nozomu Taguchi GM of Electronic Glass General Div., Electronics Company Marehisa Ishiko Regional President of Japan/Asia Pacifi c, Glass Company Yoshiaki Tamura GM of Display General Div., Electronics Company 28 AGC Report 2010 Corporate Auditors Takashi Terashima Izumi Tamai (Outside) Koji Ogaki (Outside) Shigeru Hikuma (Outside) Tetsuo Tatsuno Vice President, Planning and Coordination, Glass Company Eisuke Yanagisawa GM of Legal Hiroshi Akagi GM of Business Management General Div., Chemicals Company Tokio Matsuo GM of CSR Offi ce Akinobu Shimao President of AGC Ceramics Co., Ltd. Tomoya Takigawa GM of Research Center Takashi Shimbo GM of Purchase & Logistics Center Shinji Miyaji Group Leader of Corporate Planning Group, Offi ce of President; Deputy GM of Group Strategy Offi ce Jean-François Heris Regional President of Europe, Glass Company; President & CEO of AGC Glass Europe Takashi Fujino CFO; GM of Offi ce of President; Deputy GM of Group Strategy Offi ce • Executive Ofﬁ cers Tetsuji Kakimoto Technical Director of Japan/Asia Pacifi c, Glass Company Masafumi Ohinata GM of Electronics General Div., Electronics Company Masayuki Kamiya Assistant to President of Glass Company; Deputy GM of Group Strategy Offi ce Toru Kawatsura Assistant to President of Glass Company Tadayuki Oi Vice President, Technology, Glass Company Yasumasa Nakao GM of Production Technology Center Shinichi Kawakami Deputy GM of Group Strategy Offi ce Takuya Shimamura President of Chemicals Company (Abbreviation) “GM”: General Manager On April 1, 2010 Milestones 1907 - 2010 History of AGC Group New medium-term management plan started. 2010 Glass Company and Electronics Company established. 2009 Management policy introduced. 2008 Group brand unified as “AGC.” 2007 Asahi Glass Company’s 100th anniversary Electronics & Energy General Division established. management policy introduced. 2005 2004 Glaverbel made into a wholly owned subsidiary. 2002 AGC Group Vision formulated. Global In-House Company System introduced. AFG Industries, Inc. of the U.S.A acquired. Asahi Glass Foundation creates the “Blue Planet Prize” to honor those who help solve environmental problems. 1992 1991 Asahi Glass acquires Glaverbel S.A. glass company in Belgium. 1981 Products & Technologies of AGC Group 2010 TM , a commercial Sales of plastic optical fiber enabling the world’s highest transmission speed launched. 2006 2002– Toward Global Management Scheme Fluon® highly functional ETFE fluoropolymer film selected for the main stadium and the venue for aquatics events at the Summer Games in Beijing. 2004 Fluon® highly functional ETFE fluoropolymer film utilized at the Munich stadium, the venue for the opening match of the football (soccer) world competition in Germany. 1999 Mass production of “PD200” glass substrate for plasma display panels (PDPs) begins. 1998 Mass production of a new alkali-free glass for TFT LCDs begins. 1990 “CYTOP™” transparent fluoropolymer developed. 1950–2001 Era of Growth and Expansion 1980 1975 1966 1961 AZEC System of caustic soda manufacturing using ion-exchange membrane developed. Production of “Asahi Guard™” fluorinated water and oil repellents and “Aflon COP” fluorinated resins begins. Ion-exchange membrane method for manufacturing caustic soda developed. Production of float glass begins. Asahi Glass moves into organic chemicals, manufacturing propylene oxide and propylene glycol. Manufacture of automotive glass begins. The Indo-Asahi Glass Co., Ltd. established in India. Asahi Glass moves into the cathode- ray tube (CRT) glass bulb business. Asahi Glass Company incorporated. 1956 1954 1950 Shoko Glass Co., Ltd. established in China. 1925 1907–1949 The Early Years Asahi Glass Company founded in Amagasaki, Hyogo Pref. 1907 1954 Production of double-glazing units begins. 1938 1933 1928 1917 1916 1909 Production of tempered glass and laminated glass begins. Caustic soda production using lime process begins. Production of ordinary sheet glass using Fourcault process begins. Japan’s first soda ash produced using ammonium method. Production of refractories begins at the Amagasaki Plant. Production of Belgian-type hand- blown sheet glass, the first sheet glass successfully manufactured in Japan, begins. AGC Report 2010 29 A G C R e p o r t 2 0 1 0 1 2 4 5 3 6 7 8 ❶ Fluoropolymer-based plastic optical ﬁber (FONTEXTM) ❷ TFT LCD glass substrates ❸ Liège-Guillemins Station, Belgium / ©AGC Glass Europe ❹ Automotive glass ❺ Glass substrates for hard disk drive ❻ Fluon® ETFE Film ❼ Solar panels / Spain Author : Fernando Tomás (Zaragoza, Spain) *For illustrative purpose only ❼ Synthetic quartz glass AGC Report 2010 Issued June 2010 *Soy ink is used for this Report The paper used for pages 1 to 28 of this report comes from trees thinned from forests. This represents the effective use of trees thinned from forests and should in turn contribute to the promotion of forest thinning for forest health.

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