Asahi Glass Co. Ltd. Annual Report 2011

Plain-text annual report

AGC Report 2011 The AGC Group, with Asahi Glass Co., Ltd. at its core, is a global solution provider for architectural, automotive and display glass, chemicals and other high-function materials and components. Drawing on more than a century of technical innovation, the Group has developed world-class core technologies in fi elds including glass, chemi- cals and ceramics. Under the brand, approx. 50,000 group employees share the group vision and work together to create new value. AGC Report 2011 Contents 1 AGC Group Vision 2 Top Message Research & Development 12 Research & Development Creates the Future of the 4 Corporate Data/Organization Data/Corporate AGC Group Governance 5 Consolidated Financial Highlights/Business 14 AGC Group around the World Segments Businesses 6 Glass Operations 7 Electronics Operations 8 Chemicals Operations and Others 9 Highlights 16 Board of Directors, Corporate Auditors and Executive Ofﬁ cers 17 Milestones 1907 - 2011 Group Vision AGC Group Vision We, the AGC Group, “Look Beyond” to make the world a brighter place. Management Policy 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: Action Plan (Medium-Term Management Plan) … 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 stan- dard of performance. Diversity We will respect individuals with different cultures, capa- bilities and personalities, and our global management will operate without regard to nationality, gender or back- ground. 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. AGC Report 2011 1 Top Message Under the Medium-Term Management Plan We will Steadily Build Foundations for Further Growth. Kazuhiko Ishimura President & CEO AGCʼs Aspirations for 2020 The 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 busi- ness activities • Contributing to the development of fast-growing regions Speciﬁ cally, we are aiming to achieve total sales of at least 2 tril- lion yen and also to raise the sales share of “products for the fast- growing markets,” “environmental products,” and “new products” to 30% or higher by 2020. Accelerating the Building of Foundations for Growth as a Truly Global Enterprise To achieve the Aspirations for 2020, the AGC Group will acceler- ate the building of foundations for growth focusing on the follow- ing three points. ①Delivering technology solutions for climate change — We will give due consideration to the environment in all our business operations. Climate change is a serious issue that could threaten the business continuity of the AGC Group, but we regard this as a great oppor- tunity to contribute to society through our business. Recognizing In March 2011, a massive earthquake struck eastern Japan, causing unprecedented damage to the country, particularly in the Tohoku region. This devastating disaster also affected operations at some of our plants. At these plants, we manufacture not only architectural glass that is an essential element in our modern life- styles but also products that directly contribute to the basic infra- structure of society, including sodium hypochlorite which is used for the disinfection of tap water, and sodium bicarbonate which is used in artiﬁ cial dialysis. As a company that manufactures a range of products indis- pensable in our lives, the AGC Group will proactively endeavor to support recovery efforts for areas affected by the disaster and help residents return to normal life. Confronting the current difﬁ culties head-on, we will contin- ue to promote the measures set out in our medium-term plan and strive to build foundations for future growth. Aiming to Implement the Aspirations for 2020 as an Enter- prise that Contributes to a Sustainable Society The AGC Group recognizes the necessity of building a sustain- able society from a more comprehensive global viewpoint, and has clearly deﬁ ned its aspirations for 2020 in order to contribute to the creation of such a society. 2 AGC Report 2011 Management Policy For the achievement of the Aspirations for 2020, build foundations for growth focusing on the three points. Aspirations for 2020 Second Round of Globalization Building Foundations for Growth Building foundations for the growth of the AGC Group, looking at medium- and long-term 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 our responsibility as an energy-intensive glass manufacturer, we earnestly strive to reduce energy consumption in our manufactur- ing processes. Moreover, we will deliver technology solutions for climate change by developing, manufacturing and globally promoting products, such as solar-related materials and components that contribute to higher generating efﬁ ciency, energy-saving architectural glass suitable for each region and high-performance automotive glass for eco-friendly vehicles, by taking advantage of our technological expertise in glass, chemicals and ceramics. ②Glass-technology-driven company — Adding further value to our products through our strong and differentiated technologies. We will further advance our glass technology and fuse our core technologies in glass, chemicals and ceramics to differentiate our business. We will thereby provide more value-added products, in- cluding those related to displays. ③Second round of globalization — As a global company, we will also contribute to the growth of fast-growing regions. We will enhance our business in developed regions including Japan, Europe and North America while continuing to expand operations in fast-growing regions where we have already estab- lished bases. For example, we started operation of one of the world’s largest ﬂ oat glass lines in Russia in September 2010 and appointed a chief representative to represent the AGC Group in China at the beginning of 2011. We will also accelerate the launch of our business in countries and regions where we currently have no presence, such as Brazil. In furthering our business in fast-growing regions, we aim to contribute to the growth of the regions through business. To this end, we are currently examining the possibility of leveraging global human resources in each region and building a business model that differs from those used in developed areas. Bringing Our People and Organization Together under the Slogan of “Our People are Our Strength” Our People are the driving force for the implementation of measures and the achievement of the Aspirations for 2020. Recognizing this, we give growth opportunities to em- ployees who have high motivation toward their own growth and are highly committed to their work. Growth will allow them to take on more difﬁ cult challenges, and this in turn will make them grow further. The AGC Group has about 50,000 employees working in ap- proximately 30 countries and regions, each of which follow differ- ent business and social customs. This diversity in our workforce confers a great advantage upon the Group. Each of our em- ployees upholds the four values provided under the group vision and works to fulﬁ ll social responsibilities in their geographic areas. Supported by these employees, we will per- sistent in our efforts to become a globally trusted and respected corporate group that continues to grow by providing high added- value products and services. AGC Report 2011 3 Corporate Data/Organization Data/ Corporate Governance Corporate Data ● Name ・・・・・・・・・・・・・ Asahi Glass Co., Ltd. (Global brand: AGC) ● Head Ofﬁ ce ・・・・・・・・・・ 1-12-1, Yurakucho, Chiyoda-ku, Tokyo 100-8405, Japan 1-5-1, Marunouchi, Chiyoda-ku, Tokyo 100-8405, Japan (from August 16, 2011) ● Founded ・・・・・・・・・・・・ September 8, 1907 ● Incorporated ・・・・・・・・・・ June 1, 1950 ● Capital ・・・・・・・・・・・・・ 90,873 million yen ● Outstanding stock ・・・・・・・ 1,186,705,905 shares ● Employees ・・・・・・・・・・・ 50,399 (consolidated), 6,275 (non-consolidated) ● Consolidated Group companies 178 (141 overseas) ・・・・・・・・・・・・・・・・・・・・・・・・・・・ As of the end of December 2010 Organization Data Corporate Auditors Glass Company Board of Directors Management Committee Electronics Company Group Corporate Shared Service Centers, Research Center, etc. Chemicals Company AGC Ceramics Co., Ltd. Corporate Governance Approach to Corporate Governance As stated in its basic policy on corporate governance, Asahi Glass clearly separates the function of “oversight” and “execu- tion” of management, aiming to reinforce the management over- sight function while ensuring quick decision-making in manage- AGC Group’s Corporate Governance Structure (Outline)*1 ment 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. i t h g s r e v O t n e m e g a n a M 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 Corporate Auditors: 4 Auditors (Including 3 Outside Corporate Auditors) Independent Accountants Executive Officers General Meeting of Shareholders Board of Directors: 7 Directors (Including 3 Outside Directors) Nominating Committee: 4 Directors (Including 3 Outside Directors) President & CEO Senior Executive Vice President (Overall business management) Executive Vice President & CTO Senior Executive officer & CFO Management Committee CSR Committee Compensation Committee: 4 Directors (Including 3 Outside Directors) Compliance Committee Fair Trade Committee Information Management Council Security Export Control Headquarters Internal Audit Office Group Corporate In-house Companies/Strategic Business Units (SBUs)*2 e t a r o p r o C 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 n o i t c n u F *1　 As of March 30, 2011 *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). 4 AGC Report 2011 Consolidated Financial Highlights/ Business Segments Consolidated Financial Highlights Net sales ￥1,288.9 billion Operating Income ￥229.2 billion Net income ￥123.2 billion (billions of yen) Total assets ￥1,764 billion (billions of yen) ■ ● Operating income (billions of yen) Operating income margin (%) (billions of yen) 1,444.3 1,148.2 17.8% 154.0 10.7% 86.7 7.5% 39.2 20.0 ■ ■ Total assets (billions of yen) Net assets (billions of yen) 1,832.8 1,781.9 780.9 808.3 849.8 ’08/12 ’09/12 ’10/12 ’08/12 ’09/12 ’10/12 ’08/12 ’09/12 ’10/12 ’08/12 ’09/12 ’10/12 Business Segments Figures in brackets indicate actual results for the year ended December 2010. *Share of sales is calculated based on sales to customers outside the Group. AGC Group (Net sales: ￥1,288.9 billion) Glass Net sales: ￥570.9 billion; Share of sales: 44% Electronics and displays Net sales: ￥435.3 billion; Share of sales: 34% Chemicals Net sales: ¥260.1 billion; Share of sales: 20% Other (Ceramics products, etc.) Net sales: ￥77.3 billion; Share of sales: 2% Flat glass Net sales: ￥311 billion Displays Net sales: ￥371.7 billion Fluorochemicals & specialty chemicals Net sales: ￥96 billion Automotive glass Net sales: ￥247.8 billion Electronics materials Net sales: ￥63.6 billion Chlor-alkali & urethane Net sales: ￥172.8 billion Other glass (Lighting glass products, industrial glass products, etc.) Net sales: ￥12.1 billion AGC Report 2011 5 Glass Operations Tsinghua University (Beijing, China) ©AGC Glass Europe Glass Operations consists of businesses focused on architectural ﬂ at glass, automotive glass and solar glass, and maintains a lead- ing share in these ﬁ elds on a global basis. The architectural ﬂ at glass business is operated on a regional basis, with regions devis- ing individual product line-ups matching the particular character- istics of their respective geographic regions. The automotive glass business is characterized by global scale and operation, in line with the requirements of an automotive in- dustry that operates on a global basis. ● Global market share (AGC estimates) Flat glass ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・No.1 Automotive glass (new vehicle market) ・・・・・・・・・・No.1 Main Products Flat glass Float flat glass, figured glass, polished wired glass, low-emissivity (Low-E) glass, fabricated glass for architectural use (heat-insulating glass units, safety glass, fire-resistant glass, security glass, etc.), decorative glass, fabricated glass for industrial use, glass for solar power systems, etc. Automotive glass Tempered automotive glass, laminated automotive glass, etc. AGC studio opened in Kyobashi, Tokyo for hands-on exhibit of the glass products Low-E double-glazed glass featuring high insulation and heat-shielding properties Photovoltaic cover glass “Solite™” “UV Verre Premium™” is tempered glass for automotive front door windows which ﬁ lters out approx. 99%* of UV rays * Measured by AGC based on ISO 9050 standards” Color glass for interior surface wall 6 AGC Report 2011 Electronics Operations LCD (for illustrative purpose only) Electronics Operations consists of businesses focused on “dis- plays” and “electronic materials.” The display business enjoys a leading share of the global market in this area. The electronic materials business deals with ﬁ elds, such as optoelectronics, stor- age, and “new energy”, which are expected to grow remarkably in the years ahead. ● Global market share (AGC estimates) Glass substrates for TFTs ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・No.2 Glass substrates for PDPs ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・No.1 Main Products Displays Glass substrates for display devices, specialty glass for display applica- tions, display-related materials, etc. Electronic materials Optical membranes, optoelectronics materials, synthetic quartz glass, glass frit and paste, materials for semiconductor manufacturing equip- ment, lighting glass products, etc. FONTEX™―a commercial plastic optical ﬁ ber enabling the world’s highest transmission speed Glass substrates for TFTs Dragontrail™ glass for chemical strengthening Synthetic quartz glass GCHP™ ceramic and glass substrate for insulation of light emitting diodes Luminous efﬁ ciency correction (IR-absorbent) ﬁ lters AGC Report 2011 7 Chemicals Operations and Others Electroformed refractory for glass fusing furnaces The Japan pavilion in the Expo 2010 Shanghai China Chemicals Operations consists of businesses focused on “chlor- alkali & urethane” and “ﬂ uorochemicals & specialty chemicals” and it has a leading global share in ﬂ uoropolymers (ETFE) used for highly functional ﬂ uoropolymer ﬁ lms and other essential applications. In addition to the three main businesses, the AGC group is also engaged in businesses including ceramics, logistics and engineering. Main Products Chlor-alkali & urethane Raw materials for vinyl chloride polymer, caustic soda, urethane materi- als, gases, solvents, etc. Fluorochemicals & specialty chemicals Fluorinated resins, water and oil repellents, pharmaceutical and agro- chemical intermediates, iodine-related products , battery materials, etc. ● Global market share (AGC estimates) Fluoropolymers (ETFE) ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・No.1 Ceramics products, etc. Logistics services, ﬁ nancial services CYTOP™ transparent ﬂ uoropolymers for pellicle coating in semiconductor applications Asahi Guard™ ﬂ uorinated water and oil repellents for coating The Akashi Kaikyo Bridge, treated with highly weather resistant Lumiﬂ on™ ﬂ uoropolymer coating Roiceram™-C ﬁ ne ceramics (silicon carbide) Flemion™ ion-exchange membranes Fluon™ ETFE ﬂ uoropolymer tubes and pipes 8 AGC Report 2011 Highlights Launching the strong and beautiful Dragontrail™ glass to meet growing demand for electronic devices worldwide The AGC Group has developed and launched on the market Dragontrail™, a glass material that is highly receptive to chemical strengthening, for use as cover glass for screens on smartphones, tablet PCs, LCD televisions and other products. These electronic devices with touchscreen panels are growing in demand world- wide, and this trend is expected to drive the increased use of our new material as high-quality cover glass. The range of applications utilizing Dragontrail™ is expected to expand, for example, for use as cover glass for TV screens, a market expected to increase in coming years. We will also seek the possibility of extensive applications in the housing, automobile and solar markets in which we operate. Dragontrail ™ subjected to strength test three-point bend test on 1.1 mm-thick glass plate Dragontrail™ features unmatched strength compared with conven- tional glass, and superior scratch resistance that cannot be achieved with resin. In addition, it produces an outstanding quality surface with a distinct glassy luster. We will start up a new facility at the Takasago Plant in the latter half of ﬁ scal 2011, aiming to achieve sales of 30 billion yen or more in the global market in 2012. UV Verre Premium™―the world’s fi rst*1 approx. 99%*2 UV blocking tempered glass for automotive front door windows The AGC Group started sales of UV Verre Premium™ in Decem- ber 2010. UV Verre Premium™ is the world’s ﬁ rst tempered glass for automotive front door windows which successfully ﬁ lters out approximately 99% of UV rays. We conducted a face-to-face sur- vey of drivers in Japan, with a particular focus on female drivers, and found out that with regards to automotive glass/windows the respondents are most concerned about UV rays. Our existing UV blocking tempered glass for front door windows ﬁ lters out ap- proximately 90% of UV rays. With the newly developed UV Verre Premium™, we have succeeded for the ﬁ rst time in the world in ﬁ ltering out approximately 99% of the sun’s UV rays by forming a UV Verre Premium™―tempered glass for automotive front door windows―blocks approx. 99% of UV rays high-performance UV absorbing layer on the surface of the con- ventional glass. This UV blocking glass has been developed pri- marily to cater to women drivers, and the planning and promotion was led by our female staff. *1 As of December 2010; survey conducted by AGC *2 Measured by AGC based on ISO 9050 standards” Structure of UV blocking tempered glass for automotive front door windows (conceptual illustration) New UV blocking tempered glass Existing UV blocking tempered UV Verre UV Verre Premium UV absorbent UV absorbent kneaded into glass Previous UV blocking tempered glass High-performance UV absorbing layer Existing UV blocking tempered glass + High-performance UV absorbing layer AGC Report 2011 9 Highlights Taking part in large-scale solar power generation project / Participating in international trade shows In Europe, large-scale projects have been launched for the in- stallation of solar thermal power generation facilities, and the AGC Group extensively provides products related to solar power generation. The Desertec Industrial Initiative (Dii) Project, mainly operated by German companies, is a typical example. This project was launched in 2009 for the purpose of installing large solar thermal power and wind power generation systems in vast desert areas in the MENA region (Middle East and North Africa). The AGC Group takes part in this project, and contributes to this grand initiative by making the most of the technologies in glass, chemicals and ceramics that it has cultivated over time. In addition to R&D activities on solar-related products, the Group also participates in international trade shows in an effort to promote the widespread use of solar power generation. In ﬁ s- cal 2010, we participated in the 2010 International Photovoltaic Power Generation Expo (Tokyo), SNEC 4th (2010) International Photovoltaic Power Generation Conference & Exhibition (Shang- hai), INTERSOLAR 2010 (Munich) and Solar Power International 2010 (Los Angeles). AGC’s glass, chemicals and electronics technologies play a major role in the Dii project AGC’s exhibition booth at Solar Power International 2010 Launching sales of GCHP™ ―a glass-ceramics substrate for high-power LEDs In July 2010, the AGC Group started sales of a new glass-ceram- ics substrate that enables LED lighting with high-brightness and high-durability. LED applications have so far been limited primarily to products with extremely low power output, such as liquid crystal display televisions and home interior lighting. In future, however, the de- mand trend is expected to shift toward high-output LED applica- tions that require high-brightness, such as 3D televisions, automo- tive headlights and other automotive lighting, and outdoor lighting and illumination. In addition to high-brightness, high-durability is also a prerequisite for high-output LED applications as heat gen- eration becomes greater as the power output increases. Conventional resin substrates are susceptible to high temper- atures and are not considered suitable for high-output LEDs. In contrast, alumina substrates are heat-resistant, but the reﬂ ectivity deteriorates over time as the silver reﬂ ective ﬁ lm, which is used for enhancing high-brightness, becomes sulfurated over a prolonged period. In addition, due to the poor moldabiliy, alumina substrates are considered to have only limited usage. AGC’s new substrate created through the integration of our glass technology and ceramics technology enables both high- brightness and high-durability for high-output LEDs, and has ex- cellent moldability into compact shapes. LED package cross section Glass-ceramics substrate (GCHP ™ ) Comparison of mechanism between glass-ceramics substrate and alumina substrate Alumina substrate Light LED Light transmission Heat Light LED Heatsink Heat GCHP™―a glass-ceramics substrate for high-power LED lighting The glass-ceramics substrate (left) has higher light reﬂ ectivity than the alumina substrate (right). The former also has higher heat dissipation, supported by the incorporated silver heatsink. It is technically difﬁ cult to calcine alumina with silver incorporated due to high temperature required for alumina calcination. 10 AGC Report 2011 Setting up a production base for TFT-LCD glass substrates in China Fluon ™ ETFE Film used to cover exterior walls of a Uniqlo store In March 2011, the AGC Group set up a new production base in Jiangsu, China to manufacture thin-ﬁ lm transistor liquid crystal display (TFT-LCD) glass substrates. Facilities will be installed for processing up to 8th generation glass substrates, and volume production is scheduled to start in Autumn 2011. Demand for TFT-LCD panels for both TVs and PCs remains strong, and is expected to continue to grow at a rate of 10 to 20% per year. In the TFT-LCD panel manufacturing sector, large-sized mother glass is becoming the mainstream mate- rial, and glass manufacturers are required to ensure a stable supply of large sized glass substrates to meet demand. AGC has been handling orders from China by shipping from its existing production bases in Japan, Korea and Taiwan. In China, an increasing number of TFT-LCD panel manufacturers are planning to produce large sized panels, and consequently demand for large sized glass substrates is expected to grow substantially. In response to this trend, AGC has set up a new facility to process large sized glass substrates in China as a means of establishing a production system that will allow the Group to ﬂ exibly respond to growth in the Chinese market in coordination with its existing opera- tions in Asia. “The Second Round of Globalization” is one of the major . focus points of AGC’s management policy We look to strengthen and expand our businesses and pres- ence in the fast-growing countries. The Uniqlo Shinsaibashi Store building, which was opened in October 2010, has a unique appearance, which looks like a snow-white quilted down jacket. To create this eye-catching exterior, sheets of ETFE ﬁ lm are bonded together to cover the huge walls. In the evening, LED lighting installed behind the ﬁ lm light up the liveliest downtown area in Osaka in multi- colored illumination. The AGC Group’s high-function ﬂ uoropolymer Fluon™ ETFE Film (marketed under the “AFLEX™” brand in Japan) is used in this wall structure, which is made of 79 pairs (a total of 158) of ﬁ lm sheets, each measuring 2.7meters square with the thickness of 0.25mm. Fluon™ ETFE Film is superb in terms of light-weight, dura- bility, transparency, design ﬂ exibility, among others. The ﬁ lm has been adopted in a number of world-famous construc- tion projects, mainly overseas, including a soccer stadium in Munich and the Japan Pavilion (Zi Can Dao) at EXPO 2010 Shanghai, prior to the recent application in this major apparel store exterior, which marks the ﬁ rst time Fluon™ has been used for the similar purpose in Japan. UNIQLO Shinsaibashi Store THERMOTECT™ Ceramic Furnace Material Helping Reduce Glass Furnace Energy Starting up one of the world’s largest glass production facilities in Russia Industrial furnaces used for glass and steel production need to provide high thermal resistance while maintaining high insu- lation performance for long periods of time, as such features will increase energy efﬁ ciency and extend the product life cycle. The THERMOTECT™ ceramic furnace material made by AGC Ceramics Co., Ltd. has heat resistance as high as 1600°C, the maximum resistance set for furnace materials. The heat insulation performance of this product is main- tained even if used at a very high temperature for long peri- ods. Conventional thermal insulating bricks and ﬁ ber-added insulating materials tend to crack due to damaged joints or contracted ﬁ bers causing heat leakage within several years, but THERMOTECT™, a granular product which is mixed with water and then shaped into a furnace brick, can resist ther- mal contraction and maintain high insulation performance for long periods of time. The lighter furnace material also contributes to re- duce weight of applied furnace. THERMOTECT™ Ceramic Furnace Material In 2010, the AGC Group started operation of a glass pro- duction facility, one of the largest such facilities in the world, at its Klin plant, located approximately 80 km northwest of Moscow. The facility is intended to serve the fast-growing construc- tion market in Russia, and can produce glass of between 4 and 12 mm in thickness. The plant can also manufacture high- value-added products, since processing facilities for highly insulating glass units, laminated glass and decorative glass are installed within the premises With multiple technological innovations for efﬁ cient production of high quality products in- corporated, the new facility has successfully reduced energy consumption during production, compared with conventional glass-melting furnaces. The AGC Group will continue to seek opportunities to enter fast growing markets and expand its production capac- ity in these regions. One of the world’s largest glass production facilities, which came on line at the Klin plant in Russia AGC Report 2011 11 Research & Development Research & Development Creates the Future of the AGC Group Since its foundation, the AGC Group has developed its core technologies centered on the areas of glass, chemicals and ceramics. The AGC Group examines various trends with a long-term vision, sets the direction of our technology strategy, and strives to build the foundations for growth set forth in through the 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. Technology Outlook Long-term macro trends (global trends) trends in customers’ industries AGC’s direction Various trends Technology Roadmap Current/new business domains Current/new technology domains Business strategies 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. 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 Building foundations for growth through the 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 to build foundations for growth set forth in our management policy. 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 ① Group-wide promotion of solar business ② Glass-technology-driven company ③Measures against climate change ◎ ◎ ◎ ◎ ○ ◎ ○ ○ ◎ ○ ○ ○ ◎ ◎ ○ ○ ◎ ○ 12 AGC Report 2011 ① 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 ﬁ lm scatters light on its concave- convex surface and absorbs 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 reﬂ ective mirrors that maxi- mize the energy reﬂ ectance of solar concentrators for solar thermal power generation system. Glass substrate with TCO ﬁ lm for photovoltaic modules Visible light Near-infrared light Glass TCO a-Si Mechanism of thin-ﬁ lm silicon photovoltaic module Electrode on the back surface Glass mirrors for solar thermal generation ② Glass-technology-driven company Improving the energy effi ciency of the glass production process Total Oxygen Combustion Method By sending only oxygen to a glass melt- ing furnace, it will reduce nitrogen oxide emissions and improve energy efﬁ cien- cy. In-fl ight melting technology Granulated raw material mixtures are injected into a furnace and instantaneously melted by a combustion ﬂ ame or plasma. This technology will enable halving CO2 emissions and energy con- sumption during the production process. Oxygen heated by heat exchanging Conventional furnace In-ﬂight melting furnace Energy efﬁciency improved Oxygen Exhaust gas Raw materials Combustion burner Melting Reﬁning T o f i o r m n g p r o c e s s s p e e d s t i r r i n g I i n - ﬂ g h t m e l t i n g / i H g h Granulated raw materials Raw materials High-speed reﬁning p r o c e s s T o f o r m n g i Glass melted Glass melting furnace Plasma in an in-ﬂ ight melting furnace ③ Measures against climate change CO2 recycling in the glass production process Creating soda ash (a mate- rial used mainly for glass products) from CO2 in the production process 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 Electrolysis Exhaust gas CO2 Injection Caustic soda Soda ash Glass products Plant Recycling Structure of the Sunbalance™ eco-glass Special metal coating Glass Air layer Spacer Desiccant Sealing agent Special metal-coated glass selectively transmits or reﬂ ects light and heat, thereby maintaining a comfortable indoor environment, cool in summer and warm in winter. AGC’s Low-E glass is used in various locations worldwide (Photo: Padova, Italy) ©AGC Glass Europe AGC Report 2011 13 AGC Group around the World As a global solutions provider that supplies products and materials in areas ranging from glass and electronics to chemicals and ceramics, the AGC Group is engaged in business in Japan, Asia, Europe and North America with the support of approximately 50,000 employees in roughly 30 countries and regions worldwide. ●● ● ● ●●●●●●●●● ●●●●●● ● ● ●●●● ◉ Asahi Glass Co., Ltd. ●●●●●●●● ●●●●●●● ●●●●●●●●●●● ● ●●●●● ●● ●● ● ●●●●●●● ● ●●● ●●● ●● ●●● ● ● ● ● ● ● ●● ● ● ● ● AGC Global Network Asahi Glass Co., Ltd. ◉ Japan ●AGC Glass Products Co., Ltd. ●AGC Glass Kenzai Co., Ltd. ●AGC Okinawa Glass Kenzai 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. ●AGC Polycarbonate Co., Ltd. ●Optical Coatings Japan ●IWAKI Houseware Co., Ltd. ●Ise Chemicals Corporation ●Keiyo Monomer Co., Ltd. ●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 Filtech 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. 14 AGC Report 2011 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. IWAKI Glass Indonesia ●P.T. Asahimas Chemical ●AGC Technology Solutions (Indonesia) Co., Ltd. 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 Display Glass（Kunshan）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 (China) Holdings Co., Ltd. ●AGC Shanghai Co., Ltd. ●AGC Technology Solutions (Kunshan) Co., LTD. Korea ●Korea Autoglass Corporation ●Hanwook Techno Glass Co., Ltd. ●Asahi Glass Fine Techno Korea Co., Ltd. ●Asahi PD Glass Korea Co., Ltd. ●AGC Display Glass Ochang Co., Ltd. ●● ●●●● ● ●● ●● ● ● Glass ● Chemicals ● Ceramics　● Others ● Electronics 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. ●Woodward Iodine Corporation ●AGC America, Inc. ●AGC Capital, Inc. Canada ●AGC Flat Glass North America Ltd. ●AGC Automotive Canada, Inc. Europe Belgium ●AGC Glass Europe ●AGC Glass Europe Sales ●AGC Automotive Europe ●AGC Automotive Belgium ●AGC Europe The Netherlands ●AGC Flat Glass Netherlands B.V. The United Kingdom ●AGC Glass UK Ltd. ●AGC Chemicals Europe, Ltd. Mexico ●AGC Automotive Glass Mexico, S.A. de C.V. Czech Republic ●AGC Flat Glass Czech a.s., Clen AGC Group ●AGC Automotive Czech a.s. Russia ●OJSC AGC Bor Glassworks ●AGC Flat Glass Klin LLC France ●AGC France Italy ●AGC Flat Glass Italia S.r.l ●AGC Automotive Italia S.r.l Spain ●AGC Flat Glass Iberica S.A. North America 5% Sales by region (consolidated) Europe 15% Asia 31% Japan 49% Percentage of employees by region (consolidated) Europe 28% Japan 25% North America 7% Asia 40% *Year ended December 2010 *Percentage of sales by region is before elimination. Germany ●AGC Automotive Germany Gmbh Hungary ●AGC Automotive Hungary Ltd. Poland ●AGC Gdansk Sp. z o.o. Turkey ● AGC Otomotiv Adapazari Üretim, Sanayi Ve Ticaret Anonim Sirketi As of end of March 2011, including equity method afﬁ li- ates, etc., not using the “AGC” brand name. AGC Report 2011 15 Board of Directors, Corporate Auditors and Executive Ofﬁ cers Board of Directors Kazuhiko Ishimura Representative Director President & CEO Yuji Nishimi Representative Director Senior Executive Vice President 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 Masahiro Sakane Director (Outside) Chairman of the Board, Komatsu Ltd. Executive Ofﬁ cers ● President & CEO Kazuhiko Ishimura CEO; GM of Group Strategy Ofﬁ ce ● Senior Executive Vice Presidents Yuji Nishimi Overall business management (AGC Group improvement activities, electronics business and business development); Deputy GM of Group Strategy Ofﬁ ce Akio Endo President of Glass Company ● Executive Vice President Katsuhisa Kato CTO; Deputy GM of Group Strategy Ofﬁ ce Marehisa Ishiko Regional President of North America, Glass Company Yoshiaki Tamura President of Electronics Company; GM of Display General Div., Electronics Company 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 Masayuki Kamiya Chief Representative of AGC Group for China ● Executive Offi cers Tadayuki Oi GM of Production Technology Center Yasumasa Nakao Vice President, Technology, Glass Company Shinichi Kawakami Deputy GM of Group Strategy Ofﬁ ce Takuya Shimamura President of Chemicals Company Tetsuo Tatsuno Vice President, Planning and Coordination, Glass Company ● 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 16 AGC Report 2011 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 Kimikazu Ichikawa Regional President of Japan/Asia Paciﬁ c, Glass Company Yoshinori Kobayashi GM of Electronics General Div., Electronics Company Kazuyoshi Watanabe GM of Production Management Div., Display General Div., Electronics Company Corporate Auditors Takashi Terashima Izumi Tamai (Outside) Shigeru Hikuma (Outside) Kenji Haga (Outside) As of March 30, 2011 Milestones 1907 - 2011 History of AGC Group Products & Technologies of AGC Group New medium-term management plan started. 2010 Management policy introduced. 2008 Group brand unified as “AGC.” 2007 Asahi Glass Company’s 100th anniversary celebrated 2002– Toward Global Management management policy introduced. 2004 Glaverbel made into a wholly owned subsidiary. 2002 AGC Group Vision formulated. Global In-House Company System introduced. U.S. glassmaker AFG Industries, Inc. acquired. The “Blue Planet Prize” to honor those who help solve environmental problems created by the Asahi Glass Foundation. 1992 1991 Belgian glassmaker Glaverbel S.A. acquired. 1981 Manufacture of automotive glass begun. The Indo-Asahi Glass Co., Ltd. established in India. 1956 Asahi Glass entered the Cathode Ray Tube (CRT) glass bulb business. 1954 Caustic soda production using lime process begun. 1933 2011 2010 Dragontrail™ glass for chemical strengthening launched. UV Verre Premium™ UV blocking tempered glass for automotive front door windows introduced. Sales of FONTEX®, a commercial plastic optical fiber enabling the world’s highest transmission speed, launched. 2006 2004 Fluon® highly functional ETFE fluoropolymer film selected for the main stadium and the venue for aquatics events at the Summer Games in Beijing. 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) begun. 1998 Mass production of a new alkali-free glass for TFT LCDs begun. 1990 “CYTOP™” transparent fluoropolymer developed. 1950–2001 Era of Growth and Expansion 1980 1975 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 begun. Ion-exchange membrane method for manufacturing caustic soda developed. Production of float glass begun. Asahi Glass diversified into organic chemicals, propylene oxide and propylene glycol production started. Production of double-glazing units begun. Production of tempered glass and laminated glass begun. 1966 1961 1954 1938 Shoko Glass Co., Ltd. established in China. 1925 Production of refractories begun at the Amagasaki Plant. 1916 Asahi Glass Company founded in Amagasaki, Hyogo Pref. 1907 1928 Production of ordinary sheet glass using the Fourcault process begun. 1907–1949 The Early Years 1917 First production of soda ash using the ammonium method in Japan. 1909 Production of Belgian-type hand- blown sheet glass, the first sheet glass successfully manufactured in Japan, begun. AGC Report 2011 17 3 5 2 4 6 1 7 ❶ MyZeil shopping mall, Frankfurt, Germany / ©AGC Glass Europe ❷ Glass-ceramics substrate for LED lighting (GCHP™) ❸ Ceramic sputtering targets ❹ Dragontrail™ ❺ UV Verre Premium™ ❻ Solar panels *For illustrative purpose only ❼ Fluon® ETFE Film Communication Tools The AGC Group promotes communication with stakeholders through various tools. General corporate activities “AGC Report” (This report) CSR activities “CSR Report” Financial information “Financial Review” Reports the AGC Group’s business outline and ﬁnancial information including aconsolidated ﬁnancial statement. Company brochure introducing the AGC Group’s vision as well as business highlights. Introduces the AGC Group’s social responsibilities. Comprehensive information Website Offers a broad introduction of the AGC Group through timely information disclosure. This website offers access to the websites of major group companies. AGC Group Website http://www.agc-group.com/en/ AGC CSR Website http://www.agc.com/english/csr/ AGC Investor Relations Website http://www.agc.com/english/ir/ URL: http://www.agc-group.com Issued June 2011 *Soy ink is used for this Report The paper used for printing this report is made with wood from forest thinning. “Morino Chonai-Kai” (Forest Neighborhood Association) — Supporting sound forest management.

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