Asahi Glass Co. Ltd. Annual Report 2012

Plain-text annual report

A G C R e p o r t 2 0 1 2 AGC Report 2012 AGC Report 2012 URL: http://www.agc-group.com/en/ URL: http://www.agc-group.com/en/ 1-5-1, Marunouchi, Chiyoda-ku, Tokyo 100-8405, JAPAN 1-5-1, Marunouchi, Chiyoda-ku, Tokyo 100-8405, JAPAN Corporate Communications Corporate Communications & Investor Relations Office & Investor Relations Office Tel: +81-3-3218-5603 Fax: +81-3-3218-5390 Tel: +81-3-3218-5603 Fax: +81-3-3218-5390 E-mail: info.ad@agc.com E-mail: info.ad@agc.com CSR Office CSR Office Tel: +81-3-3218-5282 Fax: +81-3-3218-7801 Tel: +81-3-3218-5282 Fax: +81-3-3218-7801 E-mail: csr-info@agc.com E-mail: csr-info@agc.com Published in June 2012 Published in June 2012 (Next report scheduled to be published in June 2013) (Next report scheduled to be published in June 2013) Printed on paper made with wood Printed on paper made with wood from forest thinning. “Morino from forest thinning. “Morino Chonai-Kai” (Forest Neighborhood Chonai-Kai” (Forest Neighborhood Association)—Supporting sound Association)—Supporting sound forest management. forest management. All rights reserved. © 2012, Asahi Glass Co., Ltd. All rights reserved. © 2012, Asahi Glass Co., Ltd. AKT_1206-0362_ 旭硝子 CSR 英文表紙 _ おもて _12/06/20　SK Reporting and Editorial Policy Reporting and Editorial Policy Board of Directors, Corporate Auditors and Executive Ofﬁcers Board of Directors, Corporate Auditors and Executive Ofﬁcers Contents Contents Milestones Milestones Board of Directors Board of Directors In this report, the AGC Group clearly communicates its growth strategy to stakeholders, in In this report, the AGC Group clearly communicates its growth strategy to stakeholders, in accordance with its corporate mission to “Look Beyond” to make the world a brighter place. accordance with its corporate mission to “Look Beyond” to make the world a brighter place. History of AGC Group History of AGC Group Products & Technologies of AGC Group Products & Technologies of AGC Group 23 23 Chapter 1 Chapter 1 From this fiscal year onward, the AGC Group will combine its AGC Report (company and business information) and CSR Report. In this report, the Group aims to clearly communicate to stakeholders its growth strategy of effectively advancing its business initiatives and CSR goals as an integrated whole under the corporate mission to “Look Beyond” to make the world a brighter place, as outlined in the Group Vision. From this fiscal year onward, the AGC Group will combine its AGC Report (company and business information) and CSR Report. In this report, the Group aims to clearly communicate to stakeholders its growth strategy of effectively advancing its business initiatives and CSR goals as an integrated whole under the corporate mission to Yuji Nishimi Kazuhiko Ishimura Kazuhiko Ishimura “Look Beyond” to make the world a brighter place, as outlined in Representative Director Representative Director Representative Director the Group Vision. Senior Executive Vice President President & CEO President & CEO The AGC Group hopes to give its stakeholders a comprehen- The AGC Group hopes to give its stakeholders a comprehen- sive understanding of the various initiatives it promotes as a busi- sive understanding of the various initiatives it promotes as a busi- ness that contributes to sustainable society. ness that contributes to sustainable society. Yuji Nishimi Representative Director Senior Executive Vice President This report has been compiled in two chapters. This report has been compiled in two chapters. In Chapter 1 “Business Overview,” the report presents business In Chapter 1 “Business Overview,” the report presents business summaries and strategies, as well as key achievements in the summaries and strategies, as well as key achievements in the Group’s three major businesses—glass, electronics and chemicals. Group’s three major businesses—glass, electronics and chemicals. Takashi Fujino Director In Chapter 2 “Responsibilities to Our Stakeholders,” the report Senior Executive Ofﬁcer discusses the social responsibilities fulfilled by the AGC Group, based on the core themes cited in ISO 26000. In Chapter 2 “Responsibilities to Our Stakeholders,” the report discusses the social responsibilities fulfilled by the AGC Group, based on the core themes cited in ISO 26000. Katsuhisa Kato Katsuhisa Kato Representative Director Representative Director Executive Vice President Executive Vice President Takashi Fujino Director Senior Executive Ofﬁcer An Array of Tools Helps the Group Deepen its Communication with Stakeholders An Array of Tools Helps the Group Deepen its Communication with Stakeholders Financial Information Tools Financial Information Tools Non-Financial Information Tools Non-Financial Information Tools Kunihiro Matsuo Kunihiro Matsuo Director (Outside) Director (Outside) [Attorney At Law, [Attorney At Law, Kunihiro Matsuo Law Ofﬁce] Kunihiro Matsuo Law Ofﬁce] Financial Review Financial Review (PDF file only) (PDF file only) For Understanding AGC Group’s Growth Strategy For Understanding AGC Group’s Growth Strategy Hajime Sawabe Hajime Sawabe Director (Outside) Director (Outside) [Representative Director, [Representative Director, Chairman, TDK Corporation] Chairman, TDK Corporation] Masahiro Sakane Masahiro Sakane Director (Outside) Director (Outside) [Chairman of the Board, [Chairman of the Board, Komatsu Ltd.] Komatsu Ltd.] CSR Website www.agc.com/english/csr/ CSR Website www.agc.com/english/csr/ CSR Information CSR Information Supplement Supplement (PDF file only) (PDF file only) Executive Ofﬁcers Corporate Executive Ofﬁcers Corporate Repor ts the AGC Group’ s Repor ts the AGC Group’ s business outline and financial business outline and financial information including a con- information including a con- solidated financial statement solidated financial statement President & CEO President & CEO Kazuhiko Ishimura Kazuhiko Ishimura CEO CEO Marehisa Ishiko Marehisa Ishiko Regional President of North Regional President of North America, Glass Company America, Glass Company AGC Report 2012 (This report) AGC Report 2012 (This report) Yoshiaki Tamura President of Electronics Company; For Comprehensive Information GM of Display General Div., Electronics Company Yoshiaki Tamura President of Electronics Company; For Comprehensive Information GM of Display General Div., Electronics Company Senior Executive Senior Executive Vice Presidents Vice Presidents Yuji Nishimi Yuji Nishimi Overall business management Overall business management (AGC Group improvement (AGC Group improvement activities, electronics business activities, electronics business and business development) and business development) Akio Endo Akio Endo Scope of Report Scope of Report President of Glass Company President of Glass Company Jean-François Heris Jean-François Heris Regional President of Europe, Regional President of Europe, Glass Company; President & Glass Company; President & CEO of AGC Glass Europe CEO of AGC Glass Europe Takashi Fujino Takashi Fujino Overall business management Overall business management (Finance); GM of Ofﬁce of the (Finance); GM of Ofﬁce of the President President Reporting Period Reporting Period Executive Vice Executive Vice Fiscal 2011 (Jan.–Dec. 2011) Fiscal 2011 (Jan.–Dec. 2011) Presidents Presidents Some information includes content from both fiscal 2010 and 2012. Some information includes content from both fiscal 2010 and 2012. Katsuhisa Kato Katsuhisa Kato Organizations Covered in the Report Overall business management Overall business management Asahi Glass and its 179 consolidated subsidiaries (Group compa- (Technology); GM of Technology (Technology); GM of Technology General Division General Division nies) in and outside Japan Organizations Covered in the Report Asahi Glass and its 179 consolidated subsidiaries (Group compa- nies) in and outside Japan Masayuki Kamiya Masayuki Kamiya Chief Representative of AGC Chief Representative of AGC Group for China Group for China Primary Notation and Report Targets Used in the Report Executive Ofﬁcers Executive Ofﬁcers Primary Notation and Report Targets Used in the Report Tadayuki Oi Tadayuki Oi GM of Production Technology GM of Production Technology Same as “Organizations Covered in the Same as “Organizations Covered in the Center, Technology General Center, Technology General Report” mentioned above Report” mentioned above Division Division Kei Yonamoto Kei Yonamoto Brazil Global Project Brazil Global Project The AGC Group The AGC Group Team Leader Team Leader Corporate Auditors Corporate Auditors Extracted and compiled based on policies and promotional measures related to non-financial data and CSR activities Extracted and compiled based on policies and promotional measures related to non-financial data and CSR activities Takashi Terashima Takashi Terashima Izumi Tamai (Outside) Izumi Tamai (Outside) Shigeru Hikuma (Outside) Shigeru Hikuma (Outside) Kenji Haga (Outside) Kenji Haga (Outside) Introducing social responsi- Introducing social responsi- bilities shouldered by the bilities shouldered by the AGC Group AGC Group Shinichi Kawakami Shinichi Kawakami GM of Human Resources & GM of Human Resources & Administration Ofﬁce Administration Ofﬁce Shinji Miyaji Shinji Miyaji Group Leader of Corporate Group Leader of Corporate Planning Group, Ofﬁce of the Planning Group, Ofﬁce of the President President Takuya Shimamura Takuya Shimamura AGC Group Website AGC Group Website Kimikazu Ichikawa Kimikazu Ichikawa President of Chemicals President of Chemicals http://www.agc-group.com/en/ http://www.agc-group.com/en/ Regional President of Regional President of Company Company Japan/Asia Paciﬁc, Glass Japan/Asia Paciﬁc, Glass Communicating information about the AGC Group more Communicating information about the AGC Group more Tetsuo Tatsuno Tetsuo Tatsuno Company Company widely, timely, and in more detail widely, timely, and in more detail Vice President, Planning and Vice President, Planning and Coordination, Glass Company Coordination, Glass Company Yoshinori Kobayashi Yoshinori Kobayashi GM of Electronics General Div., GM of Electronics General Div., Electronics Company Electronics Company Eisuke Yanagisawa GM of Legal Eisuke Yanagisawa GM of Legal Hiroshi Akagi Hiroshi Akagi GM of Business Management GM of Business Management General Div., Chemicals General Div., Chemicals Company Company Kazuyoshi Watanabe Kazuyoshi Watanabe GM of Technology GM of Technology Non-Financial Information Guidelines Non-Financial Information Guidelines Development General Div., Development General Div., Electronics Company Electronics Company • ISO 26000: 2010 Guidance on social responsibility • ISO 26000: 2010 Guidance on social responsibility Yoshinori Hirai Yoshinori Hirai GM of Business Development GM of Business Development Ofﬁce Ofﬁce • Sustainable Reporting Guidelines Version 3.1 (G3.1), Global • Sustainable Reporting Guidelines Version 3.1 (G3.1), Global Reporting Initiative (GRI) Reporting Initiative (GRI) Tokio Matsuo Tokio Matsuo GM of CSR Ofﬁce GM of CSR Ofﬁce • Environmental Reporting Guidelines (2012), Japanese Ministry of • Environmental Reporting Guidelines (2012), Japanese Ministry of the Environment the Environment Akinobu Shimao Akinobu Shimao President of AGC Ceramics President of AGC Ceramics Co., Ltd. Co., Ltd. Date of Publication Date of Publication Kihachiro Okamoto Vice President, Automotive, Glass Company Kihachiro Okamoto Vice President, Automotive, Glass Company Tomoya Takigawa Tomoya Takigawa June 2012 June 2012 GM of Research Center, GM of Research Center, Last date of publication: AGC Report: June 2011 CSR Report: July 2011 Technology General Division Technology General Division Shigekuni Inoue Shigekuni Inoue GM of Electronic Glass General GM of Electronic Glass General Div., Electronics Company Div., Electronics Company Last date of publication: AGC Report: June 2011 CSR Report: July 2011 The AGC Group (Japan) Senior Executive Senior Executive The AGC Group (Japan) Ofﬁcers Ofﬁcers Asahi Glass/the Company Asahi Glass/the Company Shukichi Umemoto Shukichi Umemoto GM of Finance & Control Ofﬁce GM of Finance & Control Ofﬁce The AGC Group (Asia) The AGC Group (Asia) Group companies in Japan including Group companies in Japan including Yasumasa Nakao Yasumasa Nakao Asahi Glass Co. Ltd. Asahi Glass Co. Ltd. Vice President, Technology, Vice President, Technology, AGC Asahi Glass Co. Ltd. (on an AGC Asahi Glass Co. Ltd. (on an Glass Company Glass Company unconsolidated basis) unconsolidated basis) Takashi Shimbo Takashi Shimbo President Director of AGC President Director of AGC (China) Holdings Co., Ltd. (China) Holdings Co., Ltd. Group companies in Asia excluding the AGC Group (Japan) Group companies in Asia excluding the AGC Group (Japan) Regarding Future Assumptions, Forecasts and Plans Future perspectives described in this report are based on the latest information available to the AGC Group at the time of editing this report. Nevertheless, please note that results and consequences may vary with fluctuations in the business environment. Regarding Future Assumptions, Forecasts and Plans Future perspectives described in this report are based on the latest information available to the AGC Group at the time of editing this report. Nevertheless, please note that results and consequences may vary with fluctuations in the business environment. As of March 29, 2012 As of March 29, 2012 67 67 1 1 AGC Report 2012 AGC Report 2012 AGC Report 2012 AGC Report 2012 AKT_1206-0362_ 旭硝子 CSR 英文表紙 _ ウラ _12/06/20　SK AKT_1206-0362_ 旭硝子 CSR 英文表紙 _ ウラ _12/06/20　SK 1 1 Reporting and Editorial Policy/Contents Reporting and Editorial Policy/Contents 3 3 Overview of the AGC Group Overview of the AGC Group 4 4 Our Vision and Shared Values Our Vision and Shared Values 5 5 Financial and Non-Financial Highlights Financial and Non-Financial Highlights 7 7 CEO Message CEO Message 2002 2002 – – We Will Continue to Develop the AGC Group We Will Continue to Develop the AGC Group with the Goal to be an Outstanding Global with the Goal to be an Outstanding Global “ -2012” “ -2012” started. started. 2010 • New medium-term management plan 2010 • New medium-term management plan Enterprise that is Highly Profitable, Enterprise that is Highly Profitable, 2008 • Management policy introduced. 2008 • Management policy introduced. Toward Toward Global Global Fast-Growing and Contributes to the Fast-Growing and Contributes to the Management Management 2007 • Group brand uniﬁed as “AGC.” 2007 • Group brand uniﬁed as “AGC.” Realization of a Sustainable Society Realization of a Sustainable Society • Asahi Glass Company’s 100th • Asahi Glass Company’s 100th anniversary celebrated. anniversary celebrated. 9 9 CEO Interview CEO Interview 2004 • “JIKKO” management policy introduced. 2004 • “JIKKO” management policy introduced. Concerning the Medium-Term Management Concerning the Medium-Term Management 2002 • Glaverbel made into a wholly owned subsidiary. 2002 • Glaverbel made into a wholly owned subsidiary. Plan Plan “ -2012” “ -2012” • AGC Group Vision formulated. • AGC Group Vision formulated. • Global In-house Company System introduced. • Global In-house Company System introduced. 13 13 Dialogue Dialogue Conversation with the Winners of the Blue Planet Prize Conversation with the Winners of the Blue Planet Prize Looking to the Future of the Global Environment Looking to the Future of the Global Environment Aiming to Create a Sustainable Society Aiming to Create a Sustainable Society 1992 • U.S. glassmaker AFG Industries, Inc. acquired. 1992 • U.S. glassmaker AFG Industries, Inc. acquired. • The “Blue Planet Prize” to honor those who help solve • The “Blue Planet Prize” to honor those who help solve environmental problems created by the Asahi Glass environmental problems created by the Asahi Glass Foundation. Foundation. 1981 • Belgian glassmaker Glaverbel 1981 • Belgian glassmaker Glaverbel S.A. acquired. (photo ) S.A. acquired. (photo ) 1 1 39 Chapter 2 39 Chapter 2 1950 1950 – – 2001 2001 Feature 1 Feature 1 15 15 Contributing to Sustainable Development with Contributing to Sustainable Development with Era of Era of Growth and Growth and The Brazil Project The Brazil Project Expansion Expansion 19 Feature 2 19 Feature 2 1956 • Manufacture of automotive glass 1956 • Manufacture of automotive glass begun. (photo ) begun. (photo ) 2 2 Driving the Evolution of Smartphones and Tablet PCs Driving the Evolution of Smartphones and Tablet PCs • The Indo-Asahi Glass Co., Ltd. • The Indo-Asahi Glass Co., Ltd. The Future is Now with The Future is Now with 1954 • Asahi Glass entered the Cathode 1954 • Asahi Glass entered the Cathode established in India. established in India. Ray Tube (CRT) glass bulb Ray Tube (CRT) glass bulb ™ ™ business. (photo ) business. (photo ) 3 3 1907 1907 – – 1949 1949 The Early The Early Years Years 1933 • Caustic soda production using 1933 • Caustic soda production using lime process begun. lime process begun. 1925 • Shoko Glass Co., Ltd. established 1925 • Shoko Glass Co., Ltd. established in China. (photo ) in China. (photo ) 4 4 1916 • Production of refractories begun 1916 • Production of refractories begun at the Amagasaki Plant. at the Amagasaki Plant. 1907 • Asahi Glass Company founded in 1907 • Asahi Glass Company founded in Amagasaki, Hyogo Prefecture. Amagasaki, Hyogo Prefecture. (photo ) (photo ) 5 5 2011 • “Dragontrail™” glass for chemical 2011 • “Dragontrail™” glass for chemical Business Overview Business Overview strengthening launched. (photo ) strengthening launched. (photo ) • Development of 0.1-millimeter-thick • Development of 0.1-millimeter-thick 6 6 25 25 Glass Operations Glass Operations “ultra-thin glass”—the world’s “ultra-thin glass”—the world’s thinnest—using the ﬂoat method. thinnest—using the ﬂoat method. 29 29 Electronics Operations Electronics Operations (photo ) (photo ) 7 7 33 33 Chemicals Operations Chemicals Operations automotive door windows automotive door windows • “UV Verre Premium™” glass for • “UV Verre Premium™” glass for introduced. introduced. 37 37 Ceramics/Other Operations Ceramics/Other Operations 38 38 2010 • Sales of “FONTEX™”, a 2010 • Sales of “FONTEX™”, a The AGC Group and Clean Energy The AGC Group and Clean Energy commercial plastic optical ﬁber commercial plastic optical ﬁber enabling the world’s highest enabling the world’s highest transmission speed, launched. transmission speed, launched. 2006 • “Fluon® ETFE Film” selected for the main stadium and 2006 • “Fluon® ETFE Film” selected for the main stadium and the venue for aquatics games at a global sport event in the venue for aquatics games at a global sport event in Beijing. Beijing. 1999 • Mass production of “PD200” glass substrate for plasma 1999 • Mass production of “PD200” glass substrate for plasma display panels (PDPs) begun. display panels (PDPs) begun. 1998 • Mass production of a new alkali-free glass for TFT LCDs 1998 • Mass production of a new alkali-free glass for TFT LCDs begun. begun. 1990 • “CYTOP™” transparent ﬂuoropolymer developed. 1990 • “CYTOP™” transparent ﬂuoropolymer developed. 1980 • AZEC System of caustic soda manufacturing using 1980 • AZEC System of caustic soda manufacturing using Responsibilities to Responsibilities to ion-exchange membrane developed. ion-exchange membrane developed. 1 1 1975 • Production of “Asahi Guard™” ﬂuorinated water and oil 1975 • Production of “Asahi Guard™” ﬂuorinated water and oil repellents and “Aﬂon™COP” ﬂuorinated resins begun. repellents and “Aﬂon™COP” ﬂuorinated resins begun. Our Stakeholders Our Stakeholders • Ion-exchange membrane method for manufacturing • Ion-exchange membrane method for manufacturing caustic soda developed. caustic soda developed. 41 41 Targets and Results Targets and Results 1966 • Production of ﬂoat glass begun. 1966 • Production of ﬂoat glass begun. 43 43 Organizational Governance Organizational Governance (photo ) (photo ) 8 8 2 2 47 47 Human Rights and Labor Practices Human Rights and Labor Practices 1961 • Asahi Glass diversiﬁed into 1961 • Asahi Glass diversiﬁed into 52 52 The Environment The Environment oxide and propylene glycol oxide and propylene glycol organic chemicals, propylene organic chemicals, propylene 57 57 Fair Operating Practices and Consumer Issues Fair Operating Practices and Consumer Issues production started. production started. 59 59 Community Involvement and Development Community Involvement and Development 1954 • Production of double-glazing units (Pairglass™) begun. 1954 • Production of double-glazing units (Pairglass™) begun. 62 62 3 3 CSR Web Site Access CSR Web Site Access 1938 • Production of tempered glass and laminated glass begun. 1938 • Production of tempered glass and laminated glass begun. 63 63 Research & Development Research & Development 1928 • Production of ordinary sheet glass using the Fourcault 1928 • Production of ordinary sheet glass using the Fourcault 65 65 Global Network Global Network process begun. process begun. 67 67 Board of Directors, Corporate Auditors and Board of Directors, Corporate Auditors and 1917 • First production of soda ash using the ammonium 1917 • First production of soda ash using the ammonium 4 4 Executive Officers Executive Officers method in Japan. method in Japan. 68 68 Milestones Milestones 1909 • Production of Belgian-type 1909 • Production of Belgian-type hand-blown sheet glass (photo ) hand-blown sheet glass (photo ) 9 9 • The ﬁrst sheet glass successfully • The ﬁrst sheet glass successfully manufactured in Japan, begun. manufactured in Japan, begun. 5 5 6 6 7 7 8 8 9 9 AGC Report 2012 2 AGC Report 2012 2 AGC Report 2012 68 AGC Report 2012 68 Reporting and Editorial Policy Reporting and Editorial Policy Contents Contents In this report, the AGC Group clearly communicates its growth strategy to stakeholders, in In this report, the AGC Group clearly communicates its growth strategy to stakeholders, in accordance with its corporate mission to “Look Beyond to make the world a brighter place.” accordance with its corporate mission to “Look Beyond to make the world a brighter place.” From this ﬁscal year onward, the AGC Group will combine its AGC From this ﬁscal year onward, the AGC Group will combine its AGC This report has been compiled in two chapters. This report has been compiled in two chapters. Report (company and business information) and CSR Report. In this Report (company and business information) and CSR Report. In this report, the Group aims to clearly communicate to stakeholders its report, the Group aims to clearly communicate to stakeholders its In Chapter 1 “Business Overview,” the report presents business In Chapter 1 “Business Overview,” the report presents business growth strategy of effectively advancing its business initiatives and growth strategy of effectively advancing its business initiatives and summaries and strategies, as well as key achievements in the summaries and strategies, as well as key achievements in the CSR goals as an integrated whole under the corporate mission to CSR goals as an integrated whole under the corporate mission to Group’s three major businesses—glass, electronics and chemicals. Group’s three major businesses—glass, electronics and chemicals. “Look Beyond” to make the world a brighter place, as outlined in “Look Beyond” to make the world a brighter place, as outlined in the Group Vision. the Group Vision. In Chapter 2 “Responsibilities to Our Stakeholders,” the report In Chapter 2 “Responsibilities to Our Stakeholders,” the report The AGC Group hopes to give its stakeholders a comprehen- The AGC Group hopes to give its stakeholders a comprehen- discusses the social responsibilities fulﬁlled by the AGC Group, discusses the social responsibilities fulﬁlled by the AGC Group, sive understanding of the various initiatives it promotes as a busi- sive understanding of the various initiatives it promotes as a busi- based on the core themes cited in ISO 26000. based on the core themes cited in ISO 26000. ness that contributes to sustainable society. ness that contributes to sustainable society. An Array of Tools Helps the Group Deepen its Communication with Stakeholders An Array of Tools Helps the Group Deepen its Communication with Stakeholders Financial Information Tools Financial Information Tools Non-Financial Information Tools Non-Financial Information Tools For Understanding For Understanding AGC Group’s Growth Strategy AGC Group’s Growth Strategy Financial Review Financial Review (PDF file only) (PDF file only) Repor ts the AGC Group’ s Repor ts the AGC Group’ s business outline and financial business outline and financial information including a con- information including a con- solidated financial statement solidated financial statement AGC Report 2012 AGC Report 2012 (This report) (This report) CSR Homepage CSR Homepage www.agc.com/english/csr/ www.agc.com/english/csr/ CSR Information CSR Information Supplement Supplement (PDF file only) (PDF file only) Introducing social responsi- Introducing social responsi- Extracted and compiled based Extracted and compiled based bilities shouldered by the bilities shouldered by the on all policies and promotional on all policies and promotional AGC Group AGC Group measures related to non-financial measures related to non-financial data and CSR activities data and CSR activities For Comprehensive Information For Comprehensive Information AGC Group Website AGC Group Website http://www.agc-group.com/en/ http://www.agc-group.com/en/ Communicating information about the AGC Group more Communicating information about the AGC Group more widely, timely, and in more detail widely, timely, and in more detail Scope of Report Scope of Report Reporting Period Reporting Period Fiscal 2011 (Jan.–Dec. 2011) Fiscal 2011 (Jan.–Dec. 2011) Non-Financial Information Guidelines Non-Financial Information Guidelines • ISO 26000: 2010 Guidance on social responsibility • ISO 26000: 2010 Guidance on social responsibility • Sustainable Reporting Guidelines Version 3.1 (G3.1), Global • Sustainable Reporting Guidelines Version 3.1 (G3.1), Global • Environmental Reporting Guidelines (2012), Japanese Ministry of • Environmental Reporting Guidelines (2012), Japanese Ministry of Some information includes content from both ﬁscal 2010 and 2012. Some information includes content from both ﬁscal 2010 and 2012. Reporting Initiative (GRI) Reporting Initiative (GRI) Organizations Covered in the Report Organizations Covered in the Report panies”) in and outside Japan panies”) in and outside Japan Asahi Glass and its 179 consolidated subsidiaries (“Group com- Asahi Glass and its 179 consolidated subsidiaries (“Group com- the Environment the Environment Primary Notation and Report Targets Used in the Report Primary Notation and Report Targets Used in the Report Date of Publication Date of Publication The AGC Group The AGC Group Same as “Organizations Covered in the Same as “Organizations Covered in the Report” mentioned above Report” mentioned above July 2012 July 2012 The AGC Group (Japan) The AGC Group (Japan) Asahi Glass/the Company Asahi Glass/the Company Domestic (Japan) Group companies Domestic (Japan) Group companies including Asahi Glass Co. Ltd. including Asahi Glass Co. Ltd. AGC Asahi Glass Co. Ltd. (on an AGC Asahi Glass Co. Ltd. (on an unconsolidated basis) unconsolidated basis) The AGC Group (Asia) The AGC Group (Asia) Group companies in Asia excluding the Group companies in Asia excluding the AGC Group (Japan) AGC Group (Japan) Last date of publication: AGC Report: June 2011 CSR Report: July 2011 Last date of publication: AGC Report: June 2011 CSR Report: July 2011 Regarding Future Assumptions, Forecasts and Plans Regarding Future Assumptions, Forecasts and Plans Future perspectives described in this report are based on the latest Future perspectives described in this report are based on the latest information available to the AGC Group at the time of editing this information available to the AGC Group at the time of editing this report. Nevertheless, please note that results and consequences may report. Nevertheless, please note that results and consequences may vary with ﬂuctuations in the business environment. vary with ﬂuctuations in the business environment. 1 1 3 3 4 4 5 5 7 7 9 9 Reporting and Editorial Policy/Contents Reporting and Editorial Policy/Contents Overview of the AGC Group Overview of the AGC Group Our Vision and Shared Values Our Vision and Shared Values Financial and Non-Financial Highlights Financial and Non-Financial Highlights CEO Message CEO Message We Will Continue to Develop the AGC Group We Will Continue to Develop the AGC Group with the Goal to be an Outstanding Global with the Goal to be an Outstanding Global Enterprise that is Highly Profitable, Enterprise that is Highly Profitable, Fast-Growing and Contributes to the Fast-Growing and Contributes to the Realization of a Sustainable Society Realization of a Sustainable Society CEO Interview CEO Interview Concerning the Medium-Term Management Concerning the Medium-Term Management Plan Plan “ -2012” “ -2012” 13 13 Dialogue Dialogue Conversation with the Winners of the Blue Planet Prize Conversation with the Winners of the Blue Planet Prize Looking to the Future of the Global Environment Looking to the Future of the Global Environment Aiming to Create a Sustainable Society Aiming to Create a Sustainable Society 15 15 Feature 1 Feature 1 Contributing to Sustainable Development with Contributing to Sustainable Development with The Brazil Project The Brazil Project 19 Feature 2 19 Feature 2 Driving the Evolution of Smartphones and Tablet PCs Driving the Evolution of Smartphones and Tablet PCs The Future is Now with The Future is Now with ™ ™ 23 23 25 25 29 29 33 33 37 37 38 38 Chapter 1 Chapter 1 Business Overview Business Overview Glass Operations Glass Operations Electronics Operations Electronics Operations Chemicals Operations Chemicals Operations Ceramics/Other Operations Ceramics/Other Operations The AGC Group and Clean Energy The AGC Group and Clean Energy 39 Chapter 2 39 Chapter 2 Responsibilities to Responsibilities to Our Stakeholders Our Stakeholders Targets and Results Targets and Results Organizational Governance Organizational Governance Human Rights and Labor Practices Human Rights and Labor Practices The Environment The Environment Fair Operating Practices and Consumer Issues Fair Operating Practices and Consumer Issues Community Involvement and Development Community Involvement and Development CSR Web Site Access CSR Web Site Access Research & Development Research & Development Global Network Global Network Board of Directors, Corporate Auditors and Board of Directors, Corporate Auditors and Executive Officers Executive Officers 41 41 43 43 47 47 52 52 57 57 59 59 62 62 63 63 65 65 67 67 68 68 Milestones Milestones 1 1 AGC Report 2012 AGC Report 2012 AGC Report 2012 2 AGC Report 2012 2 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 technological innovation, the Group has developed world-class core technologies in ﬁelds in-cluding glass, chemicals and ceramics. Under the brand, approximately 50,000 group employees share the group vision and work together to create new value.As a global materials and components supplier, based on our core technologies in glass, ﬂuorine chemistry and their related ﬁelds, we will continue to: … Anticipate and envision the future, … Have perspectives beyond our own ﬁelds 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.NameAsahi Glass Co., Ltd. (Global brand: AGC)Head ofﬁce1-5-1, Marunouchi, Chiyoda-ku, Tokyo 100-8405, JapanFoundedSeptember 8, 1907IncorporatedJune 1, 1950Capital90,873 million yenOutstanding stock1,186,705,905 sharesEmployees50,957 (consolidated), 6,367 (non-consolidated)Consolidated Group companies 179 (142 overseas)As of the end of December 2011Note Sales ratios and sales by business segment is calculated using amount of net sales to external customers.We will continuously pursue innovations in technology, products, services, business models and human resources. We will continuously improve our operations for maximum efﬁciency and quality in every activity and at all times strive for the highest possible standard of performance. (“Never take the easy way out, but confront difﬁculties”) 1We will respect individuals with different cultures, capabilities and personalities, and our global man-agement will operate without regard to nationality, gender or background.We, as good global citizens, will shoulder the responsibility to contrib-ute to a sustainable society in har-mony with nature.We will build open and fair relation-ships with all of our stakeholders based on the highest ethical stan-dards.Net sales1,214.7billion yenNet sales1,214.7billion yenCorporate DataSales and Sales Ratio by Business SegmentSales and Sales Ratio by Geographic SegmentGlass46%554.4 billion yenEurope20%243.2 billion yenElectronics32%386.5 billion yenJapan/Asia74%923 billion yenChemicals20%248.6 billion yenAGC Group VisionOur Shared ValuesOur Mission—We, the AGC Group, “Look Beyond” to make the world a brighter place.Management PolicyManagement PolicyAGC Group Vision“ -2012”Overview of the AGC GroupOur Vision and Shared ValuesAction Plan(Medium-Term Management Plan)Action Plan(Medium-Term Management Plan)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 ExcellenceDiversityEnvironmentIntegrity1 “Never take the easy way out, but confront difﬁculties” is the founding principle of Asahi Glass.Ceramics/Other2%83.9 billion yenNorth America6%81 billion yenAGC Report 2012 3AGC Report 2012 4The 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 technological innovation, the Group has developed world-class core technologies in ﬁelds in-cluding glass, chemicals and ceramics. Under the brand, approximately 50,000 group employees share the group vision and work together to create new value.As a global materials and components supplier, based on our core technologies in glass, ﬂuorine chemistry and their related ﬁelds, we will continue to: … Anticipate and envision the future, … Have perspectives beyond our own ﬁelds 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.NameAsahi Glass Co., Ltd. (Global brand: AGC)Head ofﬁce1-5-1, Marunouchi, Chiyoda-ku, Tokyo 100-8405, JapanFoundedSeptember 8, 1907IncorporatedJune 1, 1950Capital90,873 million yenOutstanding stock1,186,705,905 sharesEmployees50,957 (consolidated), 6,367 (non-consolidated)Consolidated Group companies 179 (142 overseas)As of the end of December 2011Note Sales ratios and sales by business segment is calculated using amount of net sales to external customers.We will continuously pursue innovations in technology, products, services, business models and human resources. We will continuously improve our operations for maximum efﬁciency and quality in every activity and at all times strive for the highest possible standard of performance. (“Never take the easy way out, but confront difﬁculties”) 1We will respect individuals with different cultures, capabilities and personalities, and our global man-agement will operate without regard to nationality, gender or background.We, as good global citizens, will shoulder the responsibility to contrib-ute to a sustainable society in har-mony with nature.We will build open and fair relation-ships with all of our stakeholders based on the highest ethical stan-dards.Net sales1,214.7billion yenNet sales1,214.7billion yenCorporate DataSales and Sales Ratio by Business SegmentSales and Sales Ratio by Geographic SegmentGlass46%554.4 billion yenEurope20%243.2 billion yenElectronics32%386.5 billion yenJapan/Asia74%923 billion yenChemicals20%248.6 billion yenAGC Group VisionOur Shared ValuesOur Mission—We, the AGC Group, “Look Beyond” to make the world a brighter place.Management PolicyManagement PolicyAGC Group Vision“ -2012”Overview of the AGC GroupOur Vision and Shared ValuesAction Plan(Medium-Term Management Plan)Action Plan(Medium-Term Management Plan)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 ExcellenceDiversityEnvironmentIntegrity1 “Never take the easy way out, but confront difﬁculties” is the founding principle of Asahi Glass.Ceramics/Other2%83.9 billion yenNorth America6%81 billion yenAGC Report 2012 3AGC Report 2012 41,5005001510010,00012,00050,0003045150501,5001,000(Billion yen)(Billion yen)20091,148.220101,288.920111,214.786.7229.2165.7030020010008,0006,0004,0002,000(1,000 tons-CO2)200711,70020098,02020109,22020119,86060(Billion yen)(Billion yen)200945.0201039.4201146.4124.9117.4152.705010015020002,0001,000500(Billion yen)20091,781.920101,764.020111,691.6808.3849.8850.501,2009006003000(Billion yen)200920.02010123.2201195.3060,00040,00020,00030,00010,000200749,710200947,618201050,399201150,957Total assetsTotal net assetsR&D costsCAPEXNet salesOperating incomeJapan/Asia33,05665%North America3,7017%Europe14,20028%Glass30,11559%Electronics13,10926%Ceramics/Other3,0576%Chemicals4,6769%Number ofemployees (FY 2011) 50,957Number ofemployees (FY 2011) 50,957200847,770020089,9800(Billion yen)Asahi Glass Co., Ltd. and Consolidated SubsidiariesFiscal years ending on December 31 (consolidated)20092011Income statement and balance sheet data (million yen)Net sales1Operating incomeNet incomeTotal assetsTotal net assetsSales by business segment (million yen)GlassElectronicsChemicalsCeramics/OtherSales ratio by business segment (%)1Glass Electronics Chemicals Ceramics/OtherOther ﬁnancial dataResearch and development costs (million yen)Capital expenditures (million yen)Return on equity (ROE) (%)Return on assets (ROA) (%)2¥ 1,148,198 86,682 19,985 1,781,875 808,312¥ 525,008 369,341 233,696 68,889 42 32 20 6¥ 44,958 124,937 2.7 4.82010¥ 1,288,947 229,205 123,184 1,764,038 849,815¥ 570,921 435,301 260,078 77,305 44 34 20 2¥ 39,399 117,439 15.8 12.9Increase (Decrease)¥ (74,275) (63,542) (27,894) (72,482) 645¥ (16,498) (48,789) (11,505) 6,610 — — — —¥ 7,043 35,266 — —¥ 1,214,672 165,663 95,290 1,691,556 850,460¥ 554,423 386,512 248,573 83,915 46 32 20 2¥ 46,442 152,705 11.8 9.6Net sales/Operating incomeNet incomeTotal assets/Total net assetsR&D costs/CAPEXNumber of employeesEmployees and employee ratio by geographical segmentEmployees and employee ratio by business segmentGreenhouse gas emissions20092011Sales by geographical segment (million yen)JapanAsia3North America EuropeSales ratio by geographical segment (%)JapanAsia3North AmericaEuropeNon-ﬁnancial dataNumber of employeesTotal energy consumption (PJ)Greenhouse gas emissions (1,000 tons-CO2)Ratio of sales to fast-growing markets (%)4Ratio of environment-related sales (%)4Ratio of sales of new products (%)4¥ 658,556 417,976 76,452 236,076 47 30 6 17 47,618 125 8,020 14 13 42010¥ 777,612 495,669 86,081 232,961 49 31 5 15 50,399 145 9,220 — — —Increase (Decrease)¥ — 427,365 (5,075) 10,269 — — — — 558 2 640 — — —¥ — 923,034 81,006 243,230 — 74 6 20 50,957 147 9,860 19 16 83 From ﬁscal year 2011, the ﬁgure includes both Japan and Asia.4 Data for ﬁscal 2009 is provided to show comparison before and after introduction of the medium-term management planin 2010.1 Sales ratios and sales by business segment is calculated using amount of net sales to external customers.2 Based on operating income.“ -2012”Financial and Non-Financial HighlightsAGC Report 2012 5AGC Report 2012 61,5005001510010,00012,00050,0003045150501,5001,000(Billion yen)(Billion yen)20091,148.220101,288.920111,214.786.7229.2165.7030020010008,0006,0004,0002,000(1,000 tons-CO2)200711,70020098,02020109,22020119,86060(Billion yen)(Billion yen)200945.0201039.4201146.4124.9117.4152.705010015020002,0001,000500(Billion yen)20091,781.920101,764.020111,691.6808.3849.8850.501,2009006003000(Billion yen)200920.02010123.2201195.3060,00040,00020,00030,00010,000200749,710200947,618201050,399201150,957Total assetsTotal net assetsR&D costsCAPEXNet salesOperating incomeJapan/Asia33,05665%North America3,7017%Europe14,20028%Glass30,11559%Electronics13,10926%Ceramics/Other3,0576%Chemicals4,6769%Number ofemployees (FY 2011) 50,957Number ofemployees (FY 2011) 50,957200847,770020089,9800(Billion yen)Asahi Glass Co., Ltd. and Consolidated SubsidiariesFiscal years ending on December 31 (consolidated)20092011Income statement and balance sheet data (million yen)Net sales1Operating incomeNet incomeTotal assetsTotal net assetsSales by business segment (million yen)GlassElectronicsChemicalsCeramics/OtherSales ratio by business segment (%)1Glass Electronics Chemicals Ceramics/OtherOther ﬁnancial dataResearch and development costs (million yen)Capital expenditures (million yen)Return on equity (ROE) (%)Return on assets (ROA) (%)2¥ 1,148,198 86,682 19,985 1,781,875 808,312¥ 525,008 369,341 233,696 68,889 42 32 20 6¥ 44,958 124,937 2.7 4.82010¥ 1,288,947 229,205 123,184 1,764,038 849,815¥ 570,921 435,301 260,078 77,305 44 34 20 2¥ 39,399 117,439 15.8 12.9Increase (Decrease)¥ (74,275) (63,542) (27,894) (72,482) 645¥ (16,498) (48,789) (11,505) 6,610 — — — —¥ 7,043 35,266 — —¥ 1,214,672 165,663 95,290 1,691,556 850,460¥ 554,423 386,512 248,573 83,915 46 32 20 2¥ 46,442 152,705 11.8 9.6Net sales/Operating incomeNet incomeTotal assets/Total net assetsR&D costs/CAPEXNumber of employeesEmployees and employee ratio by geographical segmentEmployees and employee ratio by business segmentGreenhouse gas emissions20092011Sales by geographical segment (million yen)JapanAsia3North America EuropeSales ratio by geographical segment (%)JapanAsia3North AmericaEuropeNon-ﬁnancial dataNumber of employeesTotal energy consumption (PJ)Greenhouse gas emissions (1,000 tons-CO2)Ratio of sales to fast-growing markets (%)4Ratio of environment-related sales (%)4Ratio of sales of new products (%)4¥ 658,556 417,976 76,452 236,076 47 30 6 17 47,618 125 8,020 14 13 42010¥ 777,612 495,669 86,081 232,961 49 31 5 15 50,399 145 9,220 — — —Increase (Decrease)¥ — 427,365 (5,075) 10,269 — — — — 558 2 640 — — —¥ — 923,034 81,006 243,230 — 74 6 20 50,957 147 9,860 19 16 83 From ﬁscal year 2011, the ﬁgure includes both Japan and Asia.4 Data for ﬁscal 2009 is provided to show comparison before and after introduction of the medium-term management planin 2010.1 Sales ratios and sales by business segment is calculated using amount of net sales to external customers.2 Based on operating income.“ -2012”Financial and Non-Financial HighlightsAGC Report 2012 5AGC Report 2012 6CEO Message CEO Message We Will Continue to Develop the AGC Group with the Goal to be an We Will Continue to Develop the AGC Group with the Goal to be an Outstanding Global Enterprise that is Highly Proﬁtable, Fast-Growing Outstanding Global Enterprise that is Highly Proﬁtable, Fast-Growing and Contributes to the Realization of a Sustainable Society and Contributes to the Realization of a Sustainable Society Kazuhiko Ishimura Kazuhiko Ishimura President & CEO President & CEO In February 2010, the AGC Group formulated its In February 2010, the AGC Group formulated its Last year, the Group launched Dragontrail™, a high- Last year, the Group launched Dragontrail™, a high- “Aspirations for 2020” as a group-wide vision for the future. “Aspirations for 2020” as a group-wide vision for the future. performance specialty glass for chemical strengthen- performance specialty glass for chemical strengthen- AGC’s Aspirations for 2020 AGC’s Aspirations for 2020 The AGC Group aspires to excel as a highly profit- The AGC Group aspires to excel as a highly profit- able and fast-growing global enterprise making able and fast-growing global enterprise making contributions to a sustainable society by: contributions to a sustainable society by: • Having strong and differentiated technologies • Having strong and differentiated technologies • Giving consideration to environmental friendliness • Giving consideration to environmental friendliness not only of products but also for overall produc- not only of products but also for overall produc- tion processes and business activities tion processes and business activities • Contributing to the development of fast-growing • Contributing to the development of fast-growing regions regions ing, to meet the burgeoning demand for cover glass ing, to meet the burgeoning demand for cover glass for smartphones and other devices. We also released for smartphones and other devices. We also released the world’ s thinnest glass substrates for touch panels, the world’ s thinnest glass substrates for touch panels, with a thickness of 0.28 millimeters, and successfully with a thickness of 0.28 millimeters, and successfully developed ultra-thin sheet glass using the ﬂoat developed ultra-thin sheet glass using the ﬂoat method. At only 0.1 millimeters thick, it is also the thin- method. At only 0.1 millimeters thick, it is also the thin- nest ﬂoat glass in the world. nest ﬂoat glass in the world. While further evolving glass technologies, the AGC While further evolving glass technologies, the AGC Group works to combine and develop the Group’ s core Group works to combine and develop the Group’ s core technologies in glass, chemicals and ceramics as a technologies in glass, chemicals and ceramics as a means to further differentiate our products and establish means to further differentiate our products and establish a dominant position as a strong competitor in the market. a dominant position as a strong competitor in the market. Our third measure aims to Deliver Technology Our third measure aims to Deliver Technology Solutions for Environmental and Energy Issues. Solutions for Environmental and Energy Issues. To realize these aspirations, the AGC Group is cur- To realize these aspirations, the AGC Group is cur- The AGC Group’ s operations require a vast amount of The AGC Group’ s operations require a vast amount of rently focusing on the following three measures under rently focusing on the following three measures under energy for various processes including glass melting energy for various processes including glass melting its management policy, . its management policy, . and caustic soda electrolytic processes. Recognizing its and caustic soda electrolytic processes. Recognizing its We regard the ﬁrst measure as our Second Round We regard the ﬁrst measure as our Second Round responsibility to society as a major energy consumer, responsibility to society as a major energy consumer, of Globalization. of Globalization. the Group is doing its utmost to cut down on the the Group is doing its utmost to cut down on the The AGC Group has already been pursuing globaliza- The AGC Group has already been pursuing globaliza- energy used in these production processes. Indeed, energy used in these production processes. Indeed, tion by actively developing its business in regions such tion by actively developing its business in regions such we have already established some of the world’ s most we have already established some of the world’ s most as Asia, Europe and North America. as Asia, Europe and North America. advanced energy-saving technologies, and are intro- advanced energy-saving technologies, and are intro- In recent years, however, with the economies of In recent years, however, with the economies of ducing them into the Group’s plants worldwide. ducing them into the Group’s plants worldwide. advanced countries stagnating, fast-growing countries are advanced countries stagnating, fast-growing countries are At the same time, the AGC Group’ s energy-saving pro- At the same time, the AGC Group’ s energy-saving pro- emerging as growth-drivers, and issues such as demand emerging as growth-drivers, and issues such as demand duction processes give rise to energy-conserving archi- duction processes give rise to energy-conserving archi- for resources are coming to the fore. These changes for resources are coming to the fore. These changes tectural and automotive glass, as well as solar tectural and automotive glass, as well as solar have resulted in a considerable global shift. To respond have resulted in a considerable global shift. To respond power-related materials and components. As their power-related materials and components. As their to these changes, we intend to raise the AGC Group’ s to these changes, we intend to raise the AGC Group’ s usage grows, these products are making an increas- usage grows, these products are making an increas- presence in the advanced and fast-growing regions where presence in the advanced and fast-growing regions where ingly signiﬁcant contribution to solving environmental ingly signiﬁcant contribution to solving environmental it already operates, and moreover, develop business in it already operates, and moreover, develop business in and energy-related problems on a global scale through and energy-related problems on a global scale through particularly fast-growing countries that we have yet to particularly fast-growing countries that we have yet to their superior performance. their superior performance. enter. In this way, our Second Round of Globalization enter. In this way, our Second Round of Globalization On both of these fronts—working diligently to con- On both of these fronts—working diligently to con- promotes the expansion and evolution of the AGC promotes the expansion and evolution of the AGC serve energy in production processes and promoting serve energy in production processes and promoting Group in tandem with the growth of these regions. Group in tandem with the growth of these regions. environmentally friendly products—we intend to apply environmentally friendly products—we intend to apply As a speciﬁc example of this measure, we decided to As a speciﬁc example of this measure, we decided to our technological capabilities to help solve environ- our technological capabilities to help solve environ- launch full-scale architectural and automotive glass launch full-scale architectural and automotive glass mental and energy problems. mental and energy problems. operations in Brazil last year, where we are currently operations in Brazil last year, where we are currently By steadily carrying out these By steadily carrying out these constructing a plant in the state of São Paulo. constructing a plant in the state of São Paulo. measures, the AGC Group is building the foundations measures, the AGC Group is building the foundations Our second measure is designed to pursue Our second measure is designed to pursue for growth at an accelerated pace while contributing to for growth at an accelerated pace while contributing to differentiation as a Glass-technology-driven Company. differentiation as a Glass-technology-driven Company. the creation of a sustainable society through its busi- the creation of a sustainable society through its busi- The AGC Group was the ﬁrst company in Japan to pro- The AGC Group was the ﬁrst company in Japan to pro- ness activities. In this manner, we aspire to be an out- ness activities. In this manner, we aspire to be an out- duce ﬂat glass on an industrial scale, going on to make duce ﬂat glass on an industrial scale, going on to make standing and truly global corporate enterprise that standing and truly global corporate enterprise that glass for automobiles, electronic displays and other glass for automobiles, electronic displays and other consistently earns the trust and meets the expectations consistently earns the trust and meets the expectations products that have continually supported people’ s liveli- products that have continually supported people’ s liveli- of all stakeholders, including customers, shareholders, of all stakeholders, including customers, shareholders, hoods and economic development in each generation. hoods and economic development in each generation. investors, business partners and the public at large. investors, business partners and the public at large. 7 7 AGC Report 2012 AGC Report 2012 AGC Report 2012 8 AGC Report 2012 8 CEO Message We Will Continue to Develop the AGC Group with the Goal to be an Outstanding Global Enterprise that is Highly Profitable, Fast-Growing and Contributes to the Realization of a Sustainable Society Kazuhiko Ishimura President & CEO In February 2010, the AGC Group formulated its “Aspirations for 2020” as a group-wide vision for the future. AGC’s Aspirations for 2020 The AGC Group aspires to excel as a highly profit- able 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 produc- tion processes and business activities • Contributing to the development of fast-growing regions To realize these aspirations, the AGC Group is cur- rently focusing on the following three measures under its management policy, . We regard the first measure as our Second Round of Globalization. The AGC Group has already been pursuing globaliza- tion by actively developing its business in regions such as Asia, Europe and North America. In recent years, however, with the economies of advanced countries stagnating, fast-growing countries are emerging as growth-drivers, and issues such as demand for resources are coming to the fore. These changes have resulted in a considerable global shift. To respond to these changes, we intend to raise the AGC Group’ s presence in the advanced and fast-growing regions where it already operates, and moreover, develop business in particularly fast-growing countries that we have yet to enter. In this way, our Second Round of Globalization promotes the expansion and evolution of the AGC Group in tandem with the growth of these regions. As a specific example of this measure, we decided to launch full-scale architectural and automotive glass operations in Brazil last year, where we are currently constructing a plant in the state of São Paulo. Our second measure is designed to pursue differentiation as a Glass-technology-driven Company. The AGC Group was the first company in Japan to pro- duce flat glass on an industrial scale, going on to make glass for automobiles, electronic displays and other products that have continually supported people’ s liveli- hoods and economic development in each generation. Last year, the Group launched Dragontrail™, a high- performance specialty glass for chemical strengthen- ing, to meet the burgeoning demand for cover glass for smartphones and other devices. We also released the world’ s thinnest glass substrates for touch panels, with a thickness of 0.28 millimeters, and successfully developed ultra-thin sheet glass using the float method. At only 0.1 millimeters thick, it is also the thin- nest float glass in the world. While further evolving glass technologies, the AGC Group works to combine and develop the Group’ s core technologies in glass, chemicals and ceramics as a means to further differentiate our products and establish a dominant position as a strong competitor in the market. Our third measure aims to Deliver Technology Solutions for Environmental and Energy Issues. The AGC Group’ s operations require a vast amount of energy for various processes including glass melting and caustic soda electrolytic processes. Recognizing its responsibility to society as a major energy consumer, the Group is doing its utmost to cut down on the energy used in these production processes. Indeed, we have already established some of the world’ s most advanced energy-saving technologies, and are intro- ducing them into the Group’s plants worldwide. At the same time, the AGC Group’ s energy-saving pro- duction processes give rise to energy-conserving archi- tectural and automotive glass, as well as solar power-related materials and components. As their usage grows, these products are making an increas- ingly significant contribution to solving environmental and energy-related problems on a global scale through their superior performance. On both of these fronts—working diligently to con- serve energy in production processes and promoting environmentally friendly products—we intend to apply our technological capabilities to help solve environ- mental and energy problems. By steadily carrying out these measures, the AGC Group is building the foundations for growth at an accelerated pace while contributing to the creation of a sustainable society through its busi- ness activities. In this manner, we aspire to be an out- standing and truly global corporate enterprise that consistently earns the trust and meets the expectations of all stakeholders, including customers, shareholders, investors, business partners and the public at large. 7 AGC Report 2012 AGC Report 2012 8 duction technology that delivers high value-added prod-ucts while saving energy and resources. We also integrate these technologies to develop differentiated products and strengthen our market competitiveness.A good example of this product differentiation is the fusion of glass technology and chemical coating technol-ogy that resulted in UV Verre Premium™, the world’s ﬁrst automotive tempered glass for front doors that blocks approximately 99% of UV rays. The glass has been well received by customers who have actually used it. In addi-tion, a ﬁne example of heightened market competitiveness is the use of ceramics technology cultivated over many years to develop a glass-melting furnace with excellent durability and heat-resistance, resulting in improvements to productivity and the quality of our glass products.Our accumulation of unique technologies in the ﬁelds of glass, chemicals and ceramics derives from our excellent human resources. In order to leverage fully the expertise of each AGC Group employee, we created Skill Map, a human resources database organized by ﬁeld of expertise, which was rolled out in 2010. The database holds the work histories of employees with high-level technical knowledge, expertise and know-how, and the rich business knowledge and experience at Group companies around the world.Skill Map has enabled us to quickly select the most suitable members when beginning cross-section product development projects, and also draft rational recruitment plans in line with future growth strategy. There are now independent lively exchanges across divisional boundar-ies, such as global “in-company academic societies” com-prising employees working in the same ﬁeld. Such active commitment is due in large part to the introduction of Skill Map (See page 49).promote architectural and automotive glass operations in Brazil, an area into which we recently entered, and seek opportunities for market entry into areas where we do not yet have a presence.With regard to measures to become a Glass-technology-driven Company, we are leveraging the light weight, thinness and high strength of specialty glass for chemical strengthening and expanding its applications beyond displays into other areas such as solar panels and the automotive and housing sectors. In order to Deliver Technology Solutions for Environmental and Energy Issues, we are promoting the development and sales expansion of energy-saving glass for eco-friendly housingand eco-friendly vehicles, LED and OLED lighting materials, and lithium-ion battery cathode materials. In addition, all our operations—glass, electronics, chemi-cals and ceramics—provide products geared to the solar power generation market. We are also working on making signiﬁcant improvements to the energy efﬁciency of our production processes through the use of innovative pro-duction technology.Through all these initiatives, we strive to further con-tribute to solving environmental and energy issues.I think one of the AGC Group’s biggest strengths lies in its technology. The AGC Group is not limited to glass: it has accumulated unique technology across the ﬁelds of chemicals and ceramics as well. The Group evolves each unique technology to the fullest, pursuing high-level pro-As a concrete ﬁgure for the Aspirations for 2020, the AGC Group is aiming for net sales of over two trillion yen and 30% sales ratios in fast-growing markets, environment-related items and new products. In ﬁscal 2011, in order to realize these goals, we worked to build foundations for growth and bolster the earning power of our existing operations based on the medium-term management plan . Speciﬁcally, we implemented measures to expand our operations in fast-growing regions: in addition to putting a TFT-LCD glass substrates polishing plant into operation in China, we entered the architectural and automotive glass business in Brazil, and increased the capacity of our chemicals production facilities in Indonesia. We launched new products, such as specialty glass for chemical strengthening, and also expanded our lineup of energy-saving glass and other environment-related products.As a result of these and other measures, sales ratios are steadily improving: in ﬁscal 2011, our ratio of sales to fast-growing markets, ratio of environment-related sales, and ratio of sales of new products increased to 19%, 16% and 8% respectively.At present, the business environment surrounding the AGC Group is undergoing drastic changes. The growth rate of the ﬂat panel display (FPD) market is slowing as demand from replacing cathode-ray tubes runs its course. In addition, due to economic development in fast-growing countries and the unstable international situation, the prices of resources and energy are anticipated to rise and stayhigh. On top of that, although high growth in fast-growing markets is expected to continue, with the effects of the European ﬁnancial crisis, future prospects are uncertain for the global economy as a whole, including developed coun-tries, and are expected to stay that way.These changes are not transient, and I have a strong sense of urgency about them. But at the same time, I see these challenging times as the perfect opportunity to enhance the Group’s business strengths and build foundations for growth.For example, in response to the FPD market’s slowing growth rate, we can work to increase the proﬁtabil-ity of glass and chemicals operations as well as strengthen related operations, and, as a result, reduce our depen-dence on FPD operations for proﬁt. Also, rising resource and energy prices should be seen as an opportunity to thoroughly improve the energy efﬁciency of our produc-tion facilities, thereby enhancing our cost competitive-ness. In addition, treating these changes in the operating environment as a business opportunity, we will expedite sales of energy-saving products and accelerate expansion of operations in fast-growing markets where high growth is anticipated. By managing these changes in the business environ-ment, the AGC Group will use ﬁscal 2012 as the founda-tion for a reversal of its business results and a rapid return to its growth track.We will work to enhance our business strengths and to accelerate the building of foundations for growth. With regard to enhancing our business strengths, we will institute various measures in all lines of business to further improve productivity, such as introducing innova-tive, high-efﬁciency production facilities and optimizing production facilities to match demand trends. We will also push forward measures to increase investment efﬁciency and improve cash ﬂows through inventory reduction.Meanwhile, based on the management policy , we will work to accelerate the building of foundations for growth from three perspectives: the Second Round of Globalization, becoming a Glass-technology-driven Company and Delivering Technology Solutions for Environmental and Energy Issues. In the Second Round of Globalization, we will advancethe expansion of automotive glass sales and the productionof TFT-LCD glass substrates in China, where we have already launched business operations. In addition, we will steadily respond to the growing demand for architectural and automotive glass in Russia and Central and Eastern Europe. We will use all these measures to further enhance the AGC Group’s presence. We are also planning to expand the geographical scope of our operations as we As a member of society, a corporation has a responsibility to a wide range of stakeholders, including customers, shareholders and investors, society at large, business part-ners and employees. It should not simply pursue proﬁt, ignoring communities and the environment. Therefore, corporations must have a due sense of balance, face their stakeholders, and try to respond to their requests and expectations.The AGC Group is engaged in various initiatives geared to the creation of a sustainable society based on its corporate mission under the Group vision : We “Look Beyond” to make the world a brighter place. For example, in an effort to ameliorate global environmental issues, we are developing and manufacturing energy-saving architectural glass, solar-related materials and components, and other environ-mentally friendly products, and promoting the wide-spread use of such green products around the world. We are also helping to solve regional social problems in the fast-growing regions in which we operate, providing edu-cational support in cooperation with local organizations, for example.As a Group, I feel it is our obligation to continue to provide technology and services that meet the expectations of society, while remaining atten-tive to its needs. As such,I appreciate the support we receive as a Group from everyone, and the expectations for ourfuture initiatives.“ -2012”Application of Specialty Glass for Chemical StrengtheningProgress towards Projected Operations in 2020Trends in Results for the Whole Business YearDisplaymarketSolar power generation marketAutomotive marketHousingmarketAGC Group business domains14%13%4%19%16%8%30%30%30%Ratio of sales to fast-growing marketsRatio of environment-related salesRatio of sales of new productsNet salesof 1.1trillion yenin 2009Net salesof 1.2trillion yenin 2011Net salesof 2.0trillion yenor more in 2020010020030005001,0001,5002,0002009201020112012forecastSalesOperating incomeNet incomeSales: billion yenOperating incomeNet income: billion yen50150250Rapid return to growth trackSpecialty glass forchemical strengtheningCEO Interview Concerning the Medium-Term Management PlanTell us about the progress of the medium-term management plan.Q3A3Q4A4Q5A5Q6A6Q2A2Even in this harsh management environment, the ratios of sales in fast-growing areas and of new and environment-related products are steadily growing.How do you perceive the changes in the business environment that have occurred since the plan was drafted?I see handling those changes as an issue that must be overcome, but also as an opportunity.Tell us about specific growth strategies.In addition to raising the profitability of existing businesses, we will accelerate the building of foundations for growth from three perspectives.Tell us about the AGC Group’s strengths.How are you working to fully manifest Group strengths?We have introduced Skill Map, a human resources database organized by field of expertise, to make effective use of our human resources.We aim to differentiate our products and operations by utilizing the unique technology we have accumulated across many fields, including glass, chemicals and ceramics.Tell us how the AGC Group’s CSR activities are contributing to the creation of sustainable societies.We listen to communities, striving to be a Group that engenders trust, expectation and support.“ -2012”Q1A1By Enhancing Our Business Strengths and Accelerating the Building of Foundations for Growth, We Will Pursue Continuing Growth Alongside Our StakeholdersKazuhiko IshimuraPresident & CEOCEO Interview Concerning the Medium-Term Management Plan“ -2012”AGC Report 2012 9AGC Report 2012 10AGC Report 2012 11AGC Report 2012 12duction technology that delivers high value-added prod-ucts while saving energy and resources. We also integrate these technologies to develop differentiated products and strengthen our market competitiveness.A good example of this product differentiation is the fusion of glass technology and chemical coating technol-ogy that resulted in UV Verre Premium™, the world’s ﬁrst automotive tempered glass for front doors that blocks approximately 99% of UV rays. The glass has been well received by customers who have actually used it. In addi-tion, a ﬁne example of heightened market competitiveness is the use of ceramics technology cultivated over many years to develop a glass-melting furnace with excellent durability and heat-resistance, resulting in improvements to productivity and the quality of our glass products.Our accumulation of unique technologies in the ﬁelds of glass, chemicals and ceramics derives from our excellent human resources. In order to leverage fully the expertise of each AGC Group employee, we created Skill Map, a human resources database organized by ﬁeld of expertise, which was rolled out in 2010. The database holds the work histories of employees with high-level technical knowledge, expertise and know-how, and the rich business knowledge and experience at Group companies around the world.Skill Map has enabled us to quickly select the most suitable members when beginning cross-section product development projects, and also draft rational recruitment plans in line with future growth strategy. There are now independent lively exchanges across divisional boundar-ies, such as global “in-company academic societies” com-prising employees working in the same ﬁeld. Such active commitment is due in large part to the introduction of Skill Map (See page 49).promote architectural and automotive glass operations in Brazil, an area into which we recently entered, and seek opportunities for market entry into areas where we do not yet have a presence.With regard to measures to become a Glass-technology-driven Company, we are leveraging the light weight, thinness and high strength of specialty glass for chemical strengthening and expanding its applications beyond displays into other areas such as solar panels and the automotive and housing sectors. In order to Deliver Technology Solutions for Environmental and Energy Issues, we are promoting the development and sales expansion of energy-saving glass for eco-friendly housingand eco-friendly vehicles, LED and OLED lighting materials, and lithium-ion battery cathode materials. In addition, all our operations—glass, electronics, chemi-cals and ceramics—provide products geared to the solar power generation market. We are also working on making signiﬁcant improvements to the energy efﬁciency of our production processes through the use of innovative pro-duction technology.Through all these initiatives, we strive to further con-tribute to solving environmental and energy issues.I think one of the AGC Group’s biggest strengths lies in its technology. The AGC Group is not limited to glass: it has accumulated unique technology across the ﬁelds of chemicals and ceramics as well. The Group evolves each unique technology to the fullest, pursuing high-level pro-As a concrete ﬁgure for the Aspirations for 2020, the AGC Group is aiming for net sales of over two trillion yen and 30% sales ratios in fast-growing markets, environment-related items and new products. In ﬁscal 2011, in order to realize these goals, we worked to build foundations for growth and bolster the earning power of our existing operations based on the medium-term management plan . Speciﬁcally, we implemented measures to expand our operations in fast-growing regions: in addition to putting a TFT-LCD glass substrates polishing plant into operation in China, we entered the architectural and automotive glass business in Brazil, and increased the capacity of our chemicals production facilities in Indonesia. We launched new products, such as specialty glass for chemical strengthening, and also expanded our lineup of energy-saving glass and other environment-related products.As a result of these and other measures, sales ratios are steadily improving: in ﬁscal 2011, our ratio of sales to fast-growing markets, ratio of environment-related sales, and ratio of sales of new products increased to 19%, 16% and 8% respectively.At present, the business environment surrounding the AGC Group is undergoing drastic changes. The growth rate of the ﬂat panel display (FPD) market is slowing as demand from replacing cathode-ray tubes runs its course. In addition, due to economic development in fast-growing countries and the unstable international situation, the prices of resources and energy are anticipated to rise and stayhigh. On top of that, although high growth in fast-growing markets is expected to continue, with the effects of the European ﬁnancial crisis, future prospects are uncertain for the global economy as a whole, including developed coun-tries, and are expected to stay that way.These changes are not transient, and I have a strong sense of urgency about them. But at the same time, I see these challenging times as the perfect opportunity to enhance the Group’s business strengths and build foundations for growth.For example, in response to the FPD market’s slowing growth rate, we can work to increase the proﬁtabil-ity of glass and chemicals operations as well as strengthen related operations, and, as a result, reduce our depen-dence on FPD operations for proﬁt. Also, rising resource and energy prices should be seen as an opportunity to thoroughly improve the energy efﬁciency of our produc-tion facilities, thereby enhancing our cost competitive-ness. In addition, treating these changes in the operating environment as a business opportunity, we will expedite sales of energy-saving products and accelerate expansion of operations in fast-growing markets where high growth is anticipated. By managing these changes in the business environ-ment, the AGC Group will use ﬁscal 2012 as the founda-tion for a reversal of its business results and a rapid return to its growth track.We will work to enhance our business strengths and to accelerate the building of foundations for growth. With regard to enhancing our business strengths, we will institute various measures in all lines of business to further improve productivity, such as introducing innova-tive, high-efﬁciency production facilities and optimizing production facilities to match demand trends. We will also push forward measures to increase investment efﬁciency and improve cash ﬂows through inventory reduction.Meanwhile, based on the management policy , we will work to accelerate the building of foundations for growth from three perspectives: the Second Round of Globalization, becoming a Glass-technology-driven Company and Delivering Technology Solutions for Environmental and Energy Issues. In the Second Round of Globalization, we will advancethe expansion of automotive glass sales and the productionof TFT-LCD glass substrates in China, where we have already launched business operations. In addition, we will steadily respond to the growing demand for architectural and automotive glass in Russia and Central and Eastern Europe. We will use all these measures to further enhance the AGC Group’s presence. We are also planning to expand the geographical scope of our operations as we As a member of society, a corporation has a responsibility to a wide range of stakeholders, including customers, shareholders and investors, society at large, business part-ners and employees. It should not simply pursue proﬁt, ignoring communities and the environment. Therefore, corporations must have a due sense of balance, face their stakeholders, and try to respond to their requests and expectations.The AGC Group is engaged in various initiatives geared to the creation of a sustainable society based on its corporate mission under the Group vision : We “Look Beyond” to make the world a brighter place. For example, in an effort to ameliorate global environmental issues, we are developing and manufacturing energy-saving architectural glass, solar-related materials and components, and other environ-mentally friendly products, and promoting the wide-spread use of such green products around the world. We are also helping to solve regional social problems in the fast-growing regions in which we operate, providing edu-cational support in cooperation with local organizations, for example.As a Group, I feel it is our obligation to continue to provide technology and services that meet the expectations of society, while remaining atten-tive to its needs. As such,I appreciate the support we receive as a Group from everyone, and the expectations for ourfuture initiatives.“ -2012”Application of Specialty Glass for Chemical StrengtheningProgress towards Projected Operations in 2020Trends in Results for the Whole Business YearDisplaymarketSolar power generation marketAutomotive marketHousingmarketAGC Group business domains14%13%4%19%16%8%30%30%30%Ratio of sales to fast-growing marketsRatio of environment-related salesRatio of sales of new productsNet salesof 1.1trillion yenin 2009Net salesof 1.2trillion yenin 2011Net salesof 2.0trillion yenor more in 2020010020030005001,0001,5002,0002009201020112012forecastSalesOperating incomeNet incomeSales: billion yenOperating incomeNet income: billion yen50150250Rapid return to growth trackSpecialty glass forchemical strengtheningCEO Interview Concerning the Medium-Term Management PlanTell us about the progress of the medium-term management plan.Q3A3Q4A4Q5A5Q6A6Q2A2Even in this harsh management environment, the ratios of sales in fast-growing areas and of new and environment-related products are steadily growing.How do you perceive the changes in the business environment that have occurred since the plan was drafted?I see handling those changes as an issue that must be overcome, but also as an opportunity.Tell us about specific growth strategies.In addition to raising the profitability of existing businesses, we will accelerate the building of foundations for growth from three perspectives.Tell us about the AGC Group’s strengths.How are you working to fully manifest Group strengths?We have introduced Skill Map, a human resources database organized by field of expertise, to make effective use of our human resources.We aim to differentiate our products and operations by utilizing the unique technology we have accumulated across many fields, including glass, chemicals and ceramics.Tell us how the AGC Group’s CSR activities are contributing to the creation of sustainable societies.We listen to communities, striving to be a Group that engenders trust, expectation and support.“ -2012”Q1A1By Enhancing Our Business Strengths and Accelerating the Building of Foundations for Growth, We Will Pursue Continuing Growth Alongside Our StakeholdersKazuhiko IshimuraPresident & CEOCEO Interview Concerning the Medium-Term Management Plan“ -2012”AGC Report 2012 9AGC Report 2012 10AGC Report 2012 11AGC Report 2012 12duction technology that delivers high value-added prod-ucts while saving energy and resources. We also integrate these technologies to develop differentiated products and strengthen our market competitiveness.A good example of this product differentiation is the fusion of glass technology and chemical coating technol-ogy that resulted in UV Verre Premium™, the world’s first automotive tempered glass for front doors that blocks approximately 99% of UV rays. The glass has been well received by customers who have actually used it. In addi-tion, a fine example of heightened market competitiveness is the use of ceramics technology cultivated over many years to develop a glass-melting furnace with excellent durability and heat-resistance, resulting in improvements to productivity and the quality of our glass products.Our accumulation of unique technologies in the fields of glass, chemicals and ceramics derives from our excellent human resources. In order to leverage fully the expertise of each AGC Group employee, we created Skill Map, a human resources database organized by field of expertise, which was rolled out in 2010. The database holds the work histories of employees with high-level technical knowledge, expertise and know-how, and the rich business knowledge and experience at Group companies around the world.Skill Map has enabled us to quickly select the most suitable members when beginning cross-section product development projects, and also draft rational recruitment plans in line with future growth strategy. There are now independent lively exchanges across divisional boundar-ies, such as global “in-company academic societies” com-prising employees working in the same field. Such active commitment is due in large part to the introduction of Skill Map (See page 49).promote architectural and automotive glass operations in Brazil, an area into which we recently entered, and seek opportunities for market entry into areas where we do not yet have a presence.With regard to measures to become a Glass-technology-driven Company, we are leveraging the light weight, thinness and high strength of specialty glass for chemical strengthening and expanding its applications beyond displays into other areas such as solar panels and the automotive and housing sectors. In order to Deliver Technology Solutions for Environmental and Energy Issues, we are promoting the development and sales expansion of energy-saving glass for eco-friendly housingand eco-friendly vehicles, LED and OLED lighting materials, and lithium-ion battery cathode materials. In addition, all our operations—glass, electronics, chemi-cals and ceramics—provide products geared to the solar power generation market. We are also working on making significant improvements to the energy efficiency of our production processes through the use of innovative pro-duction technology.Through all these initiatives, we strive to further con-tribute to solving environmental and energy issues.I think one of the AGC Group’s biggest strengths lies in its technology. The AGC Group is not limited to glass: it has accumulated unique technology across the fields of chemicals and ceramics as well. The Group evolves each unique technology to the fullest, pursuing high-level pro-As a concrete figure for the Aspirations for 2020, the AGC Group is aiming for net sales of over two trillion yen and 30% sales ratios in fast-growing markets, environment-related items and new products. In fiscal 2011, in order to realize these goals, we worked to build foundations for growth and bolster the earning power of our existing operations based on the medium-term management plan . Specifically, we implemented measures to expand our operations in fast-growing regions: in addition to putting a TFT-LCD glass substrates polishing plant into operation in China, we entered the architectural and automotive glass business in Brazil, and increased the capacity of our chemicals production facilities in Indonesia. We launched new products, such as specialty glass for chemical strengthening, and also expanded our lineup of energy-saving glass and other environment-related products.As a result of these and other measures, sales ratios are steadily improving: in fiscal 2011, our ratio of sales to fast-growing markets, ratio of environment-related sales, and ratio of sales of new products increased to 19%, 16% and 8% respectively.At present, the business environment surrounding the AGC Group is undergoing drastic changes. The growth rate of the flat panel display (FPD) market is slowing as demand from replacing cathode-ray tubes runs its course. In addition, due to economic development in fast-growing countries and the unstable international situation, the prices of resources and energy are anticipated to rise and stayhigh. On top of that, although high growth in fast-growing markets is expected to continue, with the effects of the European financial crisis, future prospects are uncertain for the global economy as a whole, including developed coun-tries, and are expected to stay that way.These changes are not transient, and I have a strong sense of urgency about them. But at the same time, I see these challenging times as the perfect opportunity to enhance the Group’s business strengths and build foundations for growth.For example, in response to the FPD market’s slowing growth rate, we can work to increase the profitabil-ity of glass and chemicals operations as well as strengthen related operations, and, as a result, reduce our depen-dence on FPD operations for profit. Also, rising resource and energy prices should be seen as an opportunity to thoroughly improve the energy efficiency of our produc-tion facilities, thereby enhancing our cost competitive-ness. In addition, treating these changes in the operating environment as a business opportunity, we will expedite sales of energy-saving products and accelerate expansion of operations in fast-growing markets where high growth is anticipated. By managing these changes in the business environ-ment, the AGC Group will use fiscal 2012 as the founda-tion for a reversal of its business results and a rapid return to its growth track.We will work to enhance our business strengths and to accelerate the building of foundations for growth. With regard to enhancing our business strengths, we will institute various measures in all lines of business to further improve productivity, such as introducing innova-tive, high-efficiency production facilities and optimizing production facilities to match demand trends. We will also push forward measures to increase investment efficiency and improve cash flows through inventory reduction.Meanwhile, based on the management policy , we will work to accelerate the building of foundations for growth from three perspectives: the Second Round of Globalization, becoming a Glass-technology-driven Company and Delivering Technology Solutions for Environmental and Energy Issues. In the Second Round of Globalization, we will advancethe expansion of automotive glass sales and the productionof TFT-LCD glass substrates in China, where we have already launched business operations. In addition, we will steadily respond to the growing demand for architectural and automotive glass in Russia and Central and Eastern Europe. We will use all these measures to further enhance the AGC Group’s presence. We are also planning to expand the geographical scope of our operations as we As a member of society, a corporation has a responsibility to a wide range of stakeholders, including customers, shareholders and investors, society at large, business part-ners and employees. It should not simply pursue profit, ignoring communities and the environment. Therefore, corporations must have a due sense of balance, face their stakeholders, and try to respond to their requests and expectations.The AGC Group is engaged in various initiatives geared to the creation of a sustainable society based on its corporate mission under the Group vision : We “Look Beyond” to make the world a brighter place. For example, in an effort to ameliorate global environmental issues, we are developing and manufacturing energy-saving architectural glass, solar-related materials and components, and other environ-mentally friendly products, and promoting the wide-spread use of such green products around the world. We are also helping to solve regional social problems in the fast-growing regions in which we operate, providing edu-cational support in cooperation with local organizations, for example.As a Group, I feel it is our obligation to continue to provide technology and services that meet the expectations of society, while remaining atten-tive to its needs. As such,I appreciate the support we receive as a Group from everyone, and the expectations for ourfuture initiatives.“ -2012”Application of Specialty Glass for Chemical StrengtheningProgress towards Projected Operations in 2020Trends in Results for the Whole Business YearDisplaymarketSolar power generation marketAutomotive marketHousingmarketAGC Group business domains14%13%4%19%16%8%30%30%30%Ratio of sales to fast-growing marketsRatio of environment-related salesRatio of sales of new productsNet salesof 1.1trillion yenin 2009Net salesof 1.2trillion yenin 2011Net salesof 2.0trillion yenor more in 2020010020030005001,0001,5002,0002009201020112012forecastSalesOperating incomeNet incomeSales: billion yenOperating incomeNet income: billion yen50150250Rapid return to growth trackSpecialty glass forchemical strengtheningCEO Interview Concerning the Medium-Term Management PlanTell us about the progress of the medium-term management plan.Q3A3Q4A4Q5A5Q6A6Q2A2Even in this harsh management environment, the ratios of sales in fast-growing areas and of new and environment-related products are steadily growing.How do you perceive the changes in the business environment that have occurred since the plan was drafted?I see handling those changes as an issue that must be overcome, but also as an opportunity.Tell us about specific growth strategies.In addition to raising the profitability of existing businesses, we will accelerate the building of foundations for growth from three perspectives.Tell us about the AGC Group’s strengths.How are you working to fully manifest Group strengths?We have introduced Skill Map, a human resources database organized by field of expertise, to make effective use of our human resources.We aim to differentiate our products and operations by utilizing the unique technology we have accumulated across many fields, including glass, chemicals and ceramics.Tell us how the AGC Group’s CSR activities are contributing to the creation of sustainable societies.We listen to communities, striving to be a Group that engenders trust, expectation and support.“ -2012”Q1A1By Enhancing Our Business Strengths and Accelerating the Building of Foundations for Growth, We Will Pursue Continuing Growth Alongside Our StakeholdersKazuhiko IshimuraPresident & CEOCEO Interview Concerning the Medium-Term Management Plan“ -2012”AGC Report 2012 9AGC Report 2012 10AGC Report 2012 11AGC Report 2012 12duction technology that delivers high value-added prod-ucts while saving energy and resources. We also integrate these technologies to develop differentiated products and strengthen our market competitiveness.A good example of this product differentiation is the fusion of glass technology and chemical coating technol-ogy that resulted in UV Verre Premium™, the world’s ﬁrst automotive tempered glass for front doors that blocks approximately 99% of UV rays. The glass has been well received by customers who have actually used it. In addi-tion, a ﬁne example of heightened market competitiveness is the use of ceramics technology cultivated over many years to develop a glass-melting furnace with excellent durability and heat-resistance, resulting in improvements to productivity and the quality of our glass products.Our accumulation of unique technologies in the ﬁelds of glass, chemicals and ceramics derives from our excellent human resources. In order to leverage fully the expertise of each AGC Group employee, we created Skill Map, a human resources database organized by ﬁeld of expertise, which was rolled out in 2010. The database holds the work histories of employees with high-level technical knowledge, expertise and know-how, and the rich business knowledge and experience at Group companies around the world.Skill Map has enabled us to quickly select the most suitable members when beginning cross-section product development projects, and also draft rational recruitment plans in line with future growth strategy. There are now independent lively exchanges across divisional boundar-ies, such as global “in-company academic societies” com-prising employees working in the same ﬁeld. Such active commitment is due in large part to the introduction of Skill Map (See page 49).promote architectural and automotive glass operations in Brazil, an area into which we recently entered, and seek opportunities for market entry into areas where we do not yet have a presence.With regard to measures to become a Glass-technology-driven Company, we are leveraging the light weight, thinness and high strength of specialty glass for chemical strengthening and expanding its applications beyond displays into other areas such as solar panels and the automotive and housing sectors. In order to Deliver Technology Solutions for Environmental and Energy Issues, we are promoting the development and sales expansion of energy-saving glass for eco-friendly housingand eco-friendly vehicles, LED and OLED lighting materials, and lithium-ion battery cathode materials. In addition, all our operations—glass, electronics, chemi-cals and ceramics—provide products geared to the solar power generation market. We are also working on making signiﬁcant improvements to the energy efﬁciency of our production processes through the use of innovative pro-duction technology.Through all these initiatives, we strive to further con-tribute to solving environmental and energy issues.I think one of the AGC Group’s biggest strengths lies in its technology. The AGC Group is not limited to glass: it has accumulated unique technology across the ﬁelds of chemicals and ceramics as well. The Group evolves each unique technology to the fullest, pursuing high-level pro-As a concrete ﬁgure for the Aspirations for 2020, the AGC Group is aiming for net sales of over two trillion yen and 30% sales ratios in fast-growing markets, environment-related items and new products. In ﬁscal 2011, in order to realize these goals, we worked to build foundations for growth and bolster the earning power of our existing operations based on the medium-term management plan . Speciﬁcally, we implemented measures to expand our operations in fast-growing regions: in addition to putting a TFT-LCD glass substrates polishing plant into operation in China, we entered the architectural and automotive glass business in Brazil, and increased the capacity of our chemicals production facilities in Indonesia. We launched new products, such as specialty glass for chemical strengthening, and also expanded our lineup of energy-saving glass and other environment-related products.As a result of these and other measures, sales ratios are steadily improving: in ﬁscal 2011, our ratio of sales to fast-growing markets, ratio of environment-related sales, and ratio of sales of new products increased to 19%, 16% and 8% respectively.At present, the business environment surrounding the AGC Group is undergoing drastic changes. The growth rate of the ﬂat panel display (FPD) market is slowing as demand from replacing cathode-ray tubes runs its course. In addition, due to economic development in fast-growing countries and the unstable international situation, the prices of resources and energy are anticipated to rise and stayhigh. On top of that, although high growth in fast-growing markets is expected to continue, with the effects of the European ﬁnancial crisis, future prospects are uncertain for the global economy as a whole, including developed coun-tries, and are expected to stay that way.These changes are not transient, and I have a strong sense of urgency about them. But at the same time, I see these challenging times as the perfect opportunity to enhance the Group’s business strengths and build foundations for growth.For example, in response to the FPD market’s slowing growth rate, we can work to increase the proﬁtabil-ity of glass and chemicals operations as well as strengthen related operations, and, as a result, reduce our depen-dence on FPD operations for proﬁt. Also, rising resource and energy prices should be seen as an opportunity to thoroughly improve the energy efﬁciency of our produc-tion facilities, thereby enhancing our cost competitive-ness. In addition, treating these changes in the operating environment as a business opportunity, we will expedite sales of energy-saving products and accelerate expansion of operations in fast-growing markets where high growth is anticipated. By managing these changes in the business environ-ment, the AGC Group will use ﬁscal 2012 as the founda-tion for a reversal of its business results and a rapid return to its growth track.We will work to enhance our business strengths and to accelerate the building of foundations for growth. With regard to enhancing our business strengths, we will institute various measures in all lines of business to further improve productivity, such as introducing innova-tive, high-efﬁciency production facilities and optimizing production facilities to match demand trends. We will also push forward measures to increase investment efﬁciency and improve cash ﬂows through inventory reduction.Meanwhile, based on the management policy , we will work to accelerate the building of foundations for growth from three perspectives: the Second Round of Globalization, becoming a Glass-technology-driven Company and Delivering Technology Solutions for Environmental and Energy Issues. In the Second Round of Globalization, we will advancethe expansion of automotive glass sales and the productionof TFT-LCD glass substrates in China, where we have already launched business operations. In addition, we will steadily respond to the growing demand for architectural and automotive glass in Russia and Central and Eastern Europe. We will use all these measures to further enhance the AGC Group’s presence. We are also planning to expand the geographical scope of our operations as we As a member of society, a corporation has a responsibility to a wide range of stakeholders, including customers, shareholders and investors, society at large, business part-ners and employees. It should not simply pursue proﬁt, ignoring communities and the environment. Therefore, corporations must have a due sense of balance, face their stakeholders, and try to respond to their requests and expectations.The AGC Group is engaged in various initiatives geared to the creation of a sustainable society based on its corporate mission under the Group vision : We “Look Beyond” to make the world a brighter place. For example, in an effort to ameliorate global environmental issues, we are developing and manufacturing energy-saving architectural glass, solar-related materials and components, and other environ-mentally friendly products, and promoting the wide-spread use of such green products around the world. We are also helping to solve regional social problems in the fast-growing regions in which we operate, providing edu-cational support in cooperation with local organizations, for example.As a Group, I feel it is our obligation to continue to provide technology and services that meet the expectations of society, while remaining atten-tive to its needs. As such,I appreciate the support we receive as a Group from everyone, and the expectations for ourfuture initiatives.“ -2012”Application of Specialty Glass for Chemical StrengtheningProgress towards Projected Operations in 2020Trends in Results for the Whole Business YearDisplaymarketSolar power generation marketAutomotive marketHousingmarketAGC Group business domains14%13%4%19%16%8%30%30%30%Ratio of sales to fast-growing marketsRatio of environment-related salesRatio of sales of new productsNet salesof 1.1trillion yenin 2009Net salesof 1.2trillion yenin 2011Net salesof 2.0trillion yenor more in 2020010020030005001,0001,5002,0002009201020112012forecastSalesOperating incomeNet incomeSales: billion yenOperating incomeNet income: billion yen50150250Rapid return to growth trackSpecialty glass forchemical strengtheningCEO Interview Concerning the Medium-Term Management PlanTell us about the progress of the medium-term management plan.Q3A3Q4A4Q5A5Q6A6Q2A2Even in this harsh management environment, the ratios of sales in fast-growing areas and of new and environment-related products are steadily growing.How do you perceive the changes in the business environment that have occurred since the plan was drafted?I see handling those changes as an issue that must be overcome, but also as an opportunity.Tell us about specific growth strategies.In addition to raising the profitability of existing businesses, we will accelerate the building of foundations for growth from three perspectives.Tell us about the AGC Group’s strengths.How are you working to fully manifest Group strengths?We have introduced Skill Map, a human resources database organized by field of expertise, to make effective use of our human resources.We aim to differentiate our products and operations by utilizing the unique technology we have accumulated across many fields, including glass, chemicals and ceramics.Tell us how the AGC Group’s CSR activities are contributing to the creation of sustainable societies.We listen to communities, striving to be a Group that engenders trust, expectation and support.“ -2012”Q1A1By Enhancing Our Business Strengths and Accelerating the Building of Foundations for Growth, We Will Pursue Continuing Growth Alongside Our StakeholdersKazuhiko IshimuraPresident & CEOCEO Interview Concerning the Medium-Term Management Plan“ -2012”AGC Report 2012 9AGC Report 2012 10AGC Report 2012 11AGC Report 2012 12Dr. Jane Lubchenco has achieved outstanding academic results in her research in the ﬁeld of marine ecol-ogy, and has cultivated new ﬁelds that incorporate elements of geology, material cycles, and ecosystems. She is one of the most quoted biologists in the world, and has had a signiﬁcant impact on the research of marine ecology. Dr. Lubchenco has put forth the unique idea of a “social contract” between scientists and society in which there are close relationships between biodiversity, human health, the economy, the social responsibility of scientists, and national security. She thus indicates an identity for scientists who are working to tackle global environmental issues.Ishimura: Established in 1933, the Asahi Glass Foundation’s major activity back then was to offer funding for research for the chemical industry at universities. In 1992, based on the advice of former Chairperson of the Science Council of Japan, Dr. Jiro Kondo, who believed that environmental issues would become increasingly important, the Foundation created the Blue Planet Prize to award indi-viduals and organizations contributing to research related to environmental problems. The prize is regarded as the Nobel Prize in the ﬁeld of environmental related issues.Lubchenco: It’s wonderful when successful companies like the AGC Group have the wisdom to establish a foundation to beneﬁt society. The Blue Planet Prize recognizes the importance of the environment of the blue planet that we all share. With great humility and deep respect for the Earth, I am greatly honored to accept this award.Roy: I believe I’m the second Indian who has won the award in the past 20 years since it was established. And, if I’m not mistaken, I’m the only prizewinner who actually lives and works in a rural area. In this way, I think it must have been a challenge for the Blue Planet Prize to choose Barefoot College. It’s the ﬁrst time the award has spot-lighted the traditional knowledge and skills that poor people have around the world.Ishimura:While supporting this award, the AGC Group is developing technologies to dramatically reduce energy con-sumption in energy-intensive glass manufacturing processes as a part of our efforts to respond to global environmental issues.Roy: At Barefoot College, we have been utilizing solar power generation in agricultural communities. Is the AGC Group making use of solar energy? The ocean can also be considered as a source of energy, of course. What are your thoughts on that?Ishimura: While solar power is not yet capable of generat-ing the high temperatures required for glass production, we use the electricity generated from PV systems for other operations. As for harnessing the power from the ocean, we are looking at future possibilities. Meanwhile, we are working to develop and manufacture solar-related materi-als and components that improve power generation efﬁciency by leveraging our strengths in the glass, chemi-cals and ceramics technologies. We intend to promote these solar technologies and products worldwide.Lubchenco: It’s been very exciting to hear about some of the cutting-edge technologies the AGC Group is develop-ing that make the world better, not only by creating envi-ronment friendly products but also by making its own operations more environmentally friendly. We look forward to more of these kinds of activities in the future.Note This article is an excerpt from the conversation.The Asahi Glass Foundation: It was established in 1933 as the Asahi Foundation for Chemical Industry Promotion in commemoration of the 25th anniversary of the founding of Asahi Glass Co., Ltd. At that time, its primary The Blue Planet Prize is awarded by the Asahi Glass Foundation to honor individuals and organi-zations that have made significant contributions to progress in natural science as well as to the real-ization of a sustainable society. Celebrating its 20th anniversary in 2011, the Blue Planet Prize is now recognized as a prestigious environmental award worldwide. On November 8, 2011, the win-ners of the prize in 2011 were invited to the AGC Group Headquarters to talk about global environ-mental issues.For 40 years, Barefoot College has conducted low-proﬁle educational activities aimed at addressing poverty and improving the quality of life in the rural communities of developing countries, and has achieved signiﬁcant results in supporting the efforts of local residents to resolve problems them-selves. Barefoot College operates in India and other developing countries in which rural communities are facing problems, and it makes use of local traditional knowledge as well as new knowledge, including the use of small-scale solar electric power generation. The organization has given education to provide local residents with opportunities and systems that enable them to learn how to improve their quality of life. Thus, over a period of many years, Barefoot College has succeeded in developing independent and sustainable rural com-munities in various regions that are in tune with natural ecosystems.function was to provide grants for research and development activities. In 1992, the Foundation revised its programs, changed its name to the current one, and established the Blue Planet Prize. The foundation has continued to carry out a variety of activities centering on its research grant-making and commendation programs.Dr. Jane Lubchenco (United States), biologistBarefoot College (India), founder Mr. Bunker Roy Mr. Bunker Roy(India)Founder of Barefoot CollegeDr. Jane Lubchenco(United States)BiologistKazuhiko IshimuraAGC Group CEOProfiles of the Prize WinnersAsahi Glass Foundation Supports Publication of Joint Paper by Laureates of the Blue Planet PrizeFor more information on the joint paper presented by the Blue Planet Prize laureates:http://www.af-info.or.jp/en/bpplaureates/Blue Planet Prize laureates jointly presented a paper titled, The Environment and Development Challenges: The Imperative to Act, at the 12th Special Session of the Governing Council meeting of the United Nations Environment Programme in February 2012.Representing the Blue Planet Prize laureates, British professor, Dr. Robert Watson, gave a presentation. Dialogue Conversation with the Winners of the Blue Planet PrizeLooking to the Future of the Global EnvironmentAiming to Create a Sustainable SocietyAGC Report 2012 13AGC Report 2012 14Dr. Jane Lubchenco has achieved outstanding academic results in her research in the field of marine ecol-ogy, and has cultivated new fields that incorporate elements of geology, material cycles, and ecosystems. She is one of the most quoted biologists in the world, and has had a significant impact on the research of marine ecology. Dr. Lubchenco has put forth the unique idea of a “social contract” between scientists and society in which there are close relationships between biodiversity, human health, the economy, the social responsibility of scientists, and national security. She thus indicates an identity for scientists who are working to tackle global environmental issues.Ishimura: Established in 1933, the Asahi Glass Foundation’s major activity back then was to offer funding for research for the chemical industry at universities. In 1992, based on the advice of former Chairperson of the Science Council of Japan, Dr. Jiro Kondo, who believed that environmental issues would become increasingly important, the Foundation created the Blue Planet Prize to award indi-viduals and organizations contributing to research related to environmental problems. The prize is regarded as the Nobel Prize in the field of environmental related issues.Lubchenco: It’s wonderful when successful companies like the AGC Group have the wisdom to establish a foundation to benefit society. The Blue Planet Prize recognizes the importance of the environment of the blue planet that we all share. With great humility and deep respect for the Earth, I am greatly honored to accept this award.Roy: I believe I’m the second Indian who has won the award in the past 20 years since it was established. And, if I’m not mistaken, I’m the only prizewinner who actually lives and works in a rural area. In this way, I think it must have been a challenge for the Blue Planet Prize to choose Barefoot College. It’s the first time the award has spot-lighted the traditional knowledge and skills that poor people have around the world.Ishimura:While supporting this award, the AGC Group is developing technologies to dramatically reduce energy con-sumption in energy-intensive glass manufacturing processes as a part of our efforts to respond to global environmental issues.Roy: At Barefoot College, we have been utilizing solar power generation in agricultural communities. Is the AGC Group making use of solar energy? The ocean can also be considered as a source of energy, of course. What are your thoughts on that?Ishimura: While solar power is not yet capable of generat-ing the high temperatures required for glass production, we use the electricity generated from PV systems for other operations. As for harnessing the power from the ocean, we are looking at future possibilities. Meanwhile, we are working to develop and manufacture solar-related materi-als and components that improve power generation efficiency by leveraging our strengths in the glass, chemi-cals and ceramics technologies. We intend to promote these solar technologies and products worldwide.Lubchenco: It’s been very exciting to hear about some of the cutting-edge technologies the AGC Group is develop-ing that make the world better, not only by creating envi-ronment friendly products but also by making its own operations more environmentally friendly. We look forward to more of these kinds of activities in the future.Note This article is an excerpt from the conversation.The Asahi Glass Foundation: It was established in 1933 as the Asahi Foundation for Chemical Industry Promotion in commemoration of the 25th anniversary of the founding of Asahi Glass Co., Ltd. At that time, its primary The Blue Planet Prize is awarded by the Asahi Glass Foundation to honor individuals and organi-zations that have made significant contributions to progress in natural science as well as to the real-ization of a sustainable society. Celebrating its 20th anniversary in 2011, the Blue Planet Prize is now recognized as a prestigious environmental award worldwide. On November 8, 2011, the win-ners of the prize in 2011 were invited to the AGC Group Headquarters to talk about global environ-mental issues.For 40 years, Barefoot College has conducted low-profile educational activities aimed at addressing poverty and improving the quality of life in the rural communities of developing countries, and has achieved significant results in supporting the efforts of local residents to resolve problems them-selves. Barefoot College operates in India and other developing countries in which rural communities are facing problems, and it makes use of local traditional knowledge as well as new knowledge, including the use of small-scale solar electric power generation. The organization has given education to provide local residents with opportunities and systems that enable them to learn how to improve their quality of life. Thus, over a period of many years, Barefoot College has succeeded in developing independent and sustainable rural com-munities in various regions that are in tune with natural ecosystems.function was to provide grants for research and development activities. In 1992, the Foundation revised its programs, changed its name to the current one, and established the Blue Planet Prize. The foundation has continued to carry out a variety of activities centering on its research grant-making and commendation programs.Dr. Jane Lubchenco (United States), biologistBarefoot College (India), founder Mr. Bunker Roy Mr. Bunker Roy(India)Founder of Barefoot CollegeDr. Jane Lubchenco(United States)BiologistKazuhiko IshimuraAGC Group CEOProfiles of the Prize WinnersAsahi Glass Foundation Supports Publication of Joint Paper by Laureates of the Blue Planet PrizeFor more information on the joint paper presented by the Blue Planet Prize laureates:www.af-info.or.jp/en/bpplaureates/Blue Planet Prize laureates jointly presented a paper titled, The Environment and Development Challenges: The Imperative to Act, at the 12th Special Session of the Governing Council meeting of the United Nations Environment Programme in February 2012.Representing the Blue Planet Prize laureates, British professor, Dr. Robert Watson, gave a presentation. Dialogue Conversation with the Winners of the Blue Planet PrizeLooking to the Future of the Global EnvironmentAiming to Create a Sustainable SocietyAGC Report 2012 13AGC Report 2012 14Feature 1 Contributing to Sustainable Development with The Brazil Project Against a backdrop of rapid economic growth, the demand for glass in Brazil is growing.The AGC Group has decided to build a new plant in the Brazilian state of São Paulo to act as a springboard for new growth.New challenges for the AGC Group include providing state-of-the-art glass solutions as a global glass supplier, and opening new frontiers for business while confronting social issues in Brazil’s developing society. Opening the Brazilian Market toward the Second Round of Globalization The concept of a second round of globalization is pre- sented in the AGC Group’s management policy, , and the Group has made further business expansion in fast-growing markets one of the pillars of its future growth strategy. As speciﬁc goals, the “Aspirations for 2020” include Group sales of over 2 trillion yen, with sales from fast-growing markets making up more than 30%. At present, the AGC Group’ s presence in fast-growing countries is increasing steadily: it holds the top share in architec- tural and automotive glass in Russia, and is also expanding its share in India and China with a focus on the automo- Kei Yonamoto Asahi Glass Executive Vice President Brazil Global Project Team Leader tive market. However, b u s i n e s s e x p a n s i o n must not be limited to t h e s e m a r k e t s i f t h e Aspirations for 2020 are t o b e r e a l i z e d : t h e opening of new growth markets is vital. To that end, for the past few years, the AGC Group has been considering a move into Brazil, a blank area on its business map. Brazil has a population of approximately 200 million – the ﬁfth largest in the world – and in 2010 the country had achieved high economic growth of 7.5%. Future plans include hosting a succession of international sporting events, and as a result, increased demand in the construc- tion market is expected. Growth in the automotive sector is also remarkable: more than 3.6 million new cars were sold in 2011, making Brazil the fourth largest consumer in the world, and the number manufactured in 2015 is pre- dicted to reach 4 million. In addition, young people, who comprise a high percentage of the current Brazilian popu- lation, will constitute the future mainstream of consumers, and so economic growth can be expected to continue over the medium and long-term. Of course there are risks, economic instability among them. However, the country holds abundant potential above and beyond its current growth. The Group decided that the time was ﬁnally right to advance, and construction of the plant was given the go-ahead. M a r k e t E y e s As one of the BRICS countries, Brazil is seeing continued high economic growth. The country boasts territory approximately 23 times the size of Japan, and has used this vast area for concentrated efforts in the agricultural, livestock and mining industries. In recent years, it has promoted the production of ethanol, an energy source that does not use fossil resources, and the construction of infrastructure used in social and daily life, and its gross domestic product (GDP) is greatly expanding. On the other hand, energy consumption and CO2 emissions per person are also increasing, and there is a need for a harmo- nized growth strategy that will balance the economic development of society with the global environment. Gross Domestic Product (GDP)/Population Change in Brazil (Billion U.S. dollars) Gross Domestic Product Population Change (Millions) 190 188 186 192 193 1,653 1,593 1,367 1,000 1,089 882 2,500 2,000 1,500 500 0 200 195 2,089 190 180 170 160 0 2005 2006 2007 2008 2009 2010 Source: Ministry of Internal Affairs and Communications Statistics Bureau Website (Japanese only) http://www.stat.go.jp/data/sekai/index.htm Brazil São Paulo AGC Glass Brazil AGC Vidros do Brasil Ltda. Site: Guaratinguetá City, São Paulo, Brazil Portion of ownership: AGC Group 100% Description of business: and automotive glass Production capacity1: Manufacture and sales of architectural Float glass (220,000 tons/year), automotive glass (for 500,000 cars/year) No. of employees1: Approximately 500 1 As of 2016 Concentrating the Full Power of the AGC Group to Realize a Stable Supply of High-Quality Products and automotive glass in the state of São Paulo. Operation is planned to begin in stages Competing companies have long held an oligopoly in starting in 2013. The new both the construction and automotive sectors of the plant will be equipped with Brazilian glass market. However, in recent years, as the state-of-the-art equipment economy has grown, the scale of the market has and operation expertise to expanded rapidly. The resulting vigorous demand cannot ensure globally standardized quality, which is made pos- be completely satisﬁed by domestic production, and sible through the standardization of production facilities imports from Asia and Europe are increasing. For this and operation procedures across the Group. I am conﬁ- reason, through skillful use of the state-of-the-art technol- dent that the products manufactured at the new plant will ogy and business know-how it has cultivated in the global undoubtedly display high market competitiveness with market, the AGC Group is conﬁdent of success. regard to quality, supply stability and cost performance. The Group is moving forward with preparations for The Group is proactively expanding its business for glass this advance, putting together a lateral team composed of with outstanding thermal insulation and other high-value- personnel of diverse nationalities with a focus on added products. Through its supply of these products, the European members, and concentrating the knowledge Group plans to contribute to environmental conscious- and experience gained from prior advances into countries ness and improvements in quality of life in Brazil. It will and regions around the world. In particular, with the also give consideration to environmental degradation, global development of auto manufacturers, more empha- disparity of wealth and other issues in Brazilian society, sis has been placed on the globally standardized quality and intends to address them through manufacturing pro- of components, and the Group’ s ability to provide such cesses and social contribution activities. components is a tremendous asset with regard to auto- I have personally had many opportunities to speak motive glass. At present, the to personnel at stores in the area. The AGC Group is held AGC Group is building a in high regard, and there is palpable anticipation locally ﬂoat glass furnace to act as about the arrival of the ﬁrst new glass supplier in a long the core facility for glass pro- time. The Group is resolved to use its full power to launch duction, as well as the pro- its business in Brazil, to contribute to local society and duction facility for high- industry, and to lead growth strategy for the AGC Group value-added architectural through opening the new frontier of the Brazilian market. 15 AGC Report 2012 AGC Report 2012 16 Brazil São Paulo AGC Glass Brazil AGC Vidros do Brasil Ltda. Site: Guaratinguetá City, São Paulo, Brazil Portion of ownership: AGC Group 100% Description of business: Manufacture and sales of architectural and automotive glass Production capacity1: Float glass (220,000 tons/year), automotive glass (for 500,000 cars/year) No. of employees1: Approximately 500 1 As of 2016 Feature 1 M a r k e t E y e s As one of the BRICS countries, Brazil is seeing continued high economic growth. The country boasts territory approximately 23 times the size of Japan, and has used this vast area for concentrated efforts in the agricultural, livestock and mining industries. In recent years, it has promoted the production of ethanol, an energy source that does not use fossil resources, and the construction of infrastructure used in social and daily life, and its gross domestic product (GDP) is greatly expanding. On the other hand, energy consumption and CO2 emissions per person are also increasing, and there is a need for a harmo- nized growth strategy that will balance the economic development of society with the global environment. Gross Domestic Product (GDP)/Population Change in Brazil (Billion U.S. dollars) (Millions) 2,500 200 Gross Domestic Product Population Change 192 193 195 2,089 190 190 188 186 2,000 1,500 180 170 160 0 1,653 1,593 1,367 1,000 1,089 882 500 0 2005 2006 2007 2008 2009 2010 Source: Ministry of Internal Affairs and Communications Statistics Bureau Website (Japanese only) http://www.stat.go.jp/data/sekai/index.htm Contributing to Sustainable Development with The Brazil Project Against a backdrop of rapid economic growth, the demand for glass in Brazil is growing.The AGC Group has decided to build a new plant in the Brazilian state of São Paulo to act as a springboard for new growth.New challenges for the AGC Group include providing state-of-the-art glass solutions as a global glass supplier, and opening new frontiers for business while confronting social issues in Brazil’s developing society. Opening the Brazilian Market toward the Second Round of Globalization tive market. However, b u s i n e s s e x p a n s i o n must not be limited to The concept of a second round of globalization is pre- t h e s e m a r k e t s i f t h e sented in the AGC Group’s management policy, Aspirations for 2020 are , and the Group has made further business t o b e r e a l i z e d : t h e expansion in fast-growing markets one of the pillars of its opening of new growth future growth strategy. As speciﬁc goals, the “Aspirations markets is vital. To that for 2020” include Group sales of end, for the past few over 2 trillion yen, with sales from years, the AGC Group has been considering a move into fast-growing markets making up Brazil, a blank area on its business map. more than 30%. At present, Brazil has a population of approximately 200 million the AGC Group’ s presence – the ﬁfth largest in the world – and in 2010 the country in fast-growing countries is had achieved high economic growth of 7.5%. Future plans increasing steadily: it holds include hosting a succession of international sporting the top share in architec- events, and as a result, increased demand in the construc- tural and automotive glass tion market is expected. Growth in the automotive sector in Russia, and is also is also remarkable: more than 3.6 million new cars were expanding its share sold in 2011, making Brazil the fourth largest consumer in in India and China the world, and the number manufactured in 2015 is pre- with a focus on dicted to reach 4 million. In addition, young people, who the automo- comprise a high percentage of the current Brazilian popu- Kei Yonamoto Asahi Glass Executive Vice President Brazil Global Project Team Leader lation, will constitute the future mainstream of consumers, and so economic growth can be expected to continue over the medium and long-term. Of course there are risks, economic instability among them. However, the country holds abundant potential above and beyond its current growth. The Group decided that the time was ﬁnally right to advance, and construction of the plant was given the go-ahead. Concentrating the Full Power of the AGC Group to Realize a Stable Supply of High-Quality Products Competing companies have long held an oligopoly in both the construction and automotive sectors of the Brazilian glass market. However, in recent years, as the economy has grown, the scale of the market has expanded rapidly. The resulting vigorous demand cannot be completely satisﬁed by domestic production, and imports from Asia and Europe are increasing. For this reason, through skillful use of the state-of-the-art technol- ogy and business know-how it has cultivated in the global market, the AGC Group is conﬁdent of success. The Group is moving forward with preparations for this advance, putting together a lateral team composed of personnel of diverse nationalities with a focus on European members, and concentrating the knowledge and experience gained from prior advances into countries and regions around the world. In particular, with the global development of auto manufacturers, more empha- sis has been placed on the globally standardized quality of components, and the Group’ s ability to provide such components is a tremendous asset with regard to auto- motive glass. At present, the AGC Group is building a ﬂoat glass furnace to act as the core facility for glass pro- duction, as well as the pro- duction facility for high- value-added architectural and automotive glass in the state of São Paulo. Operation is planned to begin in stages starting in 2013. The new plant will be equipped with state-of-the-art equipment and operation expertise to ensure globally standardized quality, which is made pos- sible through the standardization of production facilities and operation procedures across the Group. I am conﬁ- dent that the products manufactured at the new plant will undoubtedly display high market competitiveness with regard to quality, supply stability and cost performance. The Group is proactively expanding its business for glass with outstanding thermal insulation and other high-value- added products. Through its supply of these products, the Group plans to contribute to environmental conscious- ness and improvements in quality of life in Brazil. It will also give consideration to environmental degradation, disparity of wealth and other issues in Brazilian society, and intends to address them through manufacturing pro- cesses and social contribution activities. I have personally had many opportunities to speak to personnel at stores in the area. The AGC Group is held in high regard, and there is palpable anticipation locally about the arrival of the ﬁrst new glass supplier in a long time. The Group is resolved to use its full power to launch its business in Brazil, to contribute to local society and industry, and to lead growth strategy for the AGC Group through opening the new frontier of the Brazilian market. 15 AGC Report 2012 AGC Report 2012 16 Feature 1 Contributing to Sustainable Development with The Brazil Project We will Leverage the AGC Group’s Global Technological Expertise and Know-How to Contribute to Brazil’s Economic and Social Development Davide Cappellino President AGC Glass Brazil Supporting the Growth of Brazil by Providing Advanced Glass Solutions Taking Responsibility as a Global Enterprise to Deal with Global Environmental Problems The Brazilian economy has been growing rapidly in recent years, and driven by the growth of the con- struction and automotive sectors, glass consump- tion has been following the same trend. Yet for many years, Brazil’ s glass market has been domi- nated by other companies. AGC Brazil aims to sup- port the development of the Brazilian glass market by bringing the best of AGC Group’ s global expe- rience, providing customers with high quality glass at reasonable prices. Windows in Brazil are often basic, performing poorly in terms of protection from heat, cold and noise. We will offer more sophisticated and efﬁcient glass applications, improving quality of life for Brazilians by contribut- ing to their comfort. We have already started sell- ing glass through a distribution center located near São Paulo. For the moment the glass is imported from Europe, but we are accelerating construction of our plant in order to be able to produce locally as soon as possible. AGC Brazil will also support the actions of all AGC Group In-house Companies, for example in exploring and opening the Brazilian market to products from the Chemicals Company. AGC Brazil will not be just an economic operator, focusing only on the business opportunities of this promising market. Our ambition is also to play a social role, offering concrete contributions to the development of Brazilian society and its people. This large country is today facing many chal- lenges in a number of ﬁelds. The growing economy is absorbing natural resources and a growing amount of energy, and environmental preservation is an increasingly urgent issue. Socially, Brazil is characterized by great disparities between the rich classes and a vast portion of the population who still live in poverty. AGC Brazil will put in place cutting-edge technology to reduce consumption of energy and water, as well as South America’ s most advanced system for the treatment of fumes and protection of the surrounding environment. In the meantime, we will invest in efforts to improve the public school system and support pro- grams to help children and adolescents improve skills for better jobs. We will contribute to job cre- ation for our future colleagues both directly and indirectly, working with local administrations and communities. Contributing to the Resolution of Education and Poverty Issues to Facilitate Prosperous Coexistence with Brazilian Society While Brazil experiences rapid economic growth, widening disparities are resulting in more serious pov- erty issues. One thing that prevents the poor from escaping poverty is lack of education. Although the school attendance rate in Brazil is comparatively high, many children fail grades or drop out due to inad- equate educational environments or lack of understanding on the part of their families. When they enter society, they do so without the education necessary to ﬁnd decent jobs.Before launching its business in Brazil, the AGC Group held several talks with local administrations and a number of NGOs, gathering opinions from experts before it began to consider social contribution activities for Brazil. As a result, based on an awareness of the severity of education issues in Brazilian society and on the concepts of “Support for the next generation” and “Harmony with local communities” given in the AGC Group Social Contribution Basic Policy, the Group has addressed support for education in the region. Supporting Improvements to the Public School People through Job Training and Before/After System School Care Support for Job Hunting among Local Young The Ayrton Senna Institute (est. 1994) is developing For over 30 years, Casa Betânia has operated a programs to improve public education all across Brazil in before and after school care program for young order to reduce illiteracy, age-grade distortion, failure and people from the poorest areas of Guaratinguetá dropouts. The AGC Group supports the Institute’s new City by providing meals and extracurricular lessons. learning environment improve- ment program in Guaratinguetá City, which involves training for public school teachers and the improvement of school materials. Their goal is to support children to be successful at school, and to protect them from violence, drugs and other temptations. The AGC Group will help Casa Betânia expand the capacity of their child care facility to accommodate more children, and will build a new job training center to support job hunting among the area’s young people. AGC Group CEO Kazuhiko Ishimura (right) and Ayrton Senna Institute President Viviane Senna (left) Photo credits: Mr. Moises Moraes “ S t a k e h o l d e r ’ s V o i c e It is with Great Joy that Guaratinguetá Receives the AGC Group, a Leading Producer of Glass in the World. ” The AGC Group is seriously concerned with issues related to education and the environment. We are proud to say that this company will be our partner in sustainable development and social activities, as well as for job creation and social programs that focus on education in our country. We wish AGC Glass Brazil the greatest success. Junior Fillipo Mayor of Guaratinguetá Finalized image of new plant in Brazil 17 AGC Report 2012 AGC Report 2012 18 Feature 1 Contributing to Sustainable Development with The Brazil Project We will Leverage the AGC Group’s Global Technological Expertise and Know-How to Contribute to Brazil’s Economic and Social Development Davide Cappellino President AGC Glass Brazil Supporting the Growth of Brazil by Providing Taking Responsibility as a Global Enterprise Advanced Glass Solutions to Deal with Global Environmental Problems The Brazilian economy has been growing rapidly in AGC Brazil will not be just an economic operator, recent years, and driven by the growth of the con- focusing only on the business opportunities of this struction and automotive sectors, glass consump- promising market. Our ambition is also to play a tion has been following the same trend. Yet for social role, offering concrete contributions to the many years, Brazil’ s glass market has been domi- development of Brazilian society and its people. nated by other companies. AGC Brazil aims to sup- This large country is today facing many chal- port the development of the Brazilian glass market lenges in a number of ﬁelds. The growing economy by bringing the best of AGC Group’ s global expe- is absorbing natural resources and a growing rience, providing customers with high quality glass amount of energy, and environmental preservation at reasonable prices. Windows in Brazil are often is an increasingly urgent issue. Socially, Brazil is basic, performing poorly in terms of protection characterized by great disparities between the rich from heat, cold and noise. We will offer more classes and a vast portion of the population who sophisticated and efﬁcient glass applications, still live in poverty. improving quality of life for Brazilians by contribut- AGC Brazil will put in place cutting-edge ing to their comfort. We have already started sell- technology to reduce consumption of energy and ing glass through a distribution center located near water, as well as South America’ s most advanced São Paulo. For the moment the glass is imported system for the treatment of fumes and protection from Europe, but we are accelerating construction of the surrounding environment. of our plant in order to be able to produce locally In the meantime, we will invest in efforts to as soon as possible. improve the public school system and support pro- AGC Brazil will also support the actions of all grams to help children and adolescents improve AGC Group In-house Companies, for example in skills for better jobs. We will contribute to job cre- exploring and opening the Brazilian market to ation for our future colleagues both directly and products from the Chemicals Company. indirectly, working with local administrations and communities. 17 AGC Report 2012 Finalized image of new plant in Brazil Contributing to the Resolution of Education and Poverty Issues to Facilitate Prosperous Coexistence with Brazilian Society While Brazil experiences rapid economic growth, widening disparities are resulting in more serious pov- erty issues. One thing that prevents the poor from escaping poverty is lack of education. Although the school attendance rate in Brazil is comparatively high, many children fail grades or drop out due to inad- equate educational environments or lack of understanding on the part of their families. When they enter society, they do so without the education necessary to ﬁnd decent jobs.Before launching its business in Brazil, the AGC Group held several talks with local administrations and a number of NGOs, gathering opinions from experts before it began to consider social contribution activities for Brazil. As a result, based on an awareness of the severity of education issues in Brazilian society and on the concepts of “Support for the next generation” and “Harmony with local communities” given in the AGC Group Social Contribution Basic Policy, the Group has addressed support for education in the region. Supporting Improvements to the Public School System The Ayrton Senna Institute (est. 1994) is developing programs to improve public education all across Brazil in order to reduce illiteracy, age-grade distortion, failure and dropouts. The AGC Group supports the Institute’s new learning environment improve- ment program in Guaratinguetá City, which involves training for public school teachers and the improvement of school materials. Support for Job Hunting among Local Young People through Job Training and Before/After School Care For over 30 years, Casa Betânia has operated a before and after school care program for young people from the poorest areas of Guaratinguetá City by providing meals and extracurricular lessons. Their goal is to support children to be successful at school, and to protect them from violence, drugs and other temptations. The AGC Group will help Casa Betânia expand the capacity of their child care facility to accommodate more children, and will build a new job training center to support job hunting among the area’s young people. AGC Group CEO Kazuhiko Ishimura (right) and Ayrton Senna Institute President Viviane Senna (left) Photo credits: Mr. Moises Moraes “ l S t a k e h o d e r ’ s V o c e i It is with Great Joy that Guaratinguetá Receives the AGC Group, a Leading Producer of Glass in the World. ” The AGC Group is seriously concerned with issues related to education and the environment. We are proud to say that this company will be our partner in sustainable development and social activities, as well as for job creation and social programs that focus on education in our country. We wish AGC Glass Brazil the greatest success. Junior Fillipo Mayor of Guaratinguetá AGC Report 2012 18 Feature 2 Feature 2 Driving the Evolution of Smartphones and Tablet PCs Driving the Evolution of Smartphones and Tablet PCs The Future is The Future is Now with Now with ™ ™ The AGC Group introduces Dragontrail™—a The AGC Group introduces Dragontrail™—a revolutionary cover glass that is resistant to revolutionary cover glass that is resistant to scratching and shocks and keeps displays look- scratching and shocks and keeps displays look- ing pristine. The Group has drawn on its highly ing pristine. The Group has drawn on its highly advanced and diverse technologies developed advanced and diverse technologies developed over many years to create a cover glass for over many years to create a cover glass for today’ s generation. Demonstrating material today’ s generation. Demonstrating material properties never seen before, Dragontrail™ is properties never seen before, Dragontrail™ is attracting attention from device manufacturers attracting attention from device manufacturers all over the world. all over the world. M M a a r r k k e e t t E E y y e e s s Rapid Growth of the Global Markets for Rapid Growth of the Global Markets for Smartphones and Tablet PCs Smartphones and Tablet PCs The number of smartphones shipped globally shot up The number of smartphones shipped globally shot up from about 200 million units in 2009 to 500 million units from about 200 million units in 2009 to 500 million units in 2011. Likewise, shipments of tablet PCs, which took in 2011. Likewise, shipments of tablet PCs, which took the market by storm from 2010, reached almost 80 mil- the market by storm from 2010, reached almost 80 mil- lion units in 2011—around four times the amount in the lion units in 2011—around four times the amount in the previous year. Driving the trend is the introduction of previous year. Driving the trend is the introduction of 3G-capable mobile phones by major manufacturers and 3G-capable mobile phones by major manufacturers and compatible 3G services made available in countries compatible 3G services made available in countries around the world, along with the popularity of social around the world, along with the popularity of social media and the spreading usage of applications and media and the spreading usage of applications and content tailored to these devices. The markets for content tailored to these devices. The markets for smartphones and tablet PCs are expected to grow smartphones and tablet PCs are expected to grow steadily, with shipments forecast at about 1.3 billion steadily, with shipments forecast at about 1.3 billion units and about 300 million units, respectively, in 2015. units and about 300 million units, respectively, in 2015. Shipments of Smartphones and Tablet PCs Shipments of Smartphones and Tablet PCs (in-house research) (in-house research) (Millions of units) (Millions of units) Smartphones Smartphones Tablet PCs Tablet PCs ™ ™ 1,287 1,287 1,133 1,133 929 929 768 768 528 528 174 174 0 0 0 0 267 267 19 19 169 169 219 219 271 271 73 73 103 103 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 2015 2015 1,500 1,500 1,000 1,000 500 500 Dragontrail™ is a specialty glass that Dragontrail™ is a specialty glass that i s h i g h l y r e c e p t i v e t o c h e m i c a l i s h i g h l y r e c e p t i v e t o c h e m i c a l strengthening. It is designed for use strengthening. It is designed for use as touch panel cover glass with smart- as touch panel cover glass with smart- phones, tablet PCs and other devices. phones, tablet PCs and other devices. The AGC Group has launched a pro- The AGC Group has launched a pro- motional campaign centered on the motional campaign centered on the image of a dragon for this revolution- image of a dragon for this revolution- ary new product. ary new product. Developing Specialty Glass for Protecting Displays Developing Specialty Glass for Protecting Displays and Touch Panels from Shocks and Scratches and Touch Panels from Shocks and Scratches The markets for smartphones and tablet PCs equipped The markets for smartphones and tablet PCs equipped with touch panels are growing on a global scale. The with touch panels are growing on a global scale. The displays and touch panels of these mobile devices not displays and touch panels of these mobile devices not only need to be cared for because the LCD screen is only need to be cared for because the LCD screen is directly touched during operations, but they also require directly touched during operations, but they also require protection from shocks that can result from dropping the protection from shocks that can result from dropping the device while on the move, and scratches that might occur device while on the move, and scratches that might occur from scraping inside carrying bags. from scraping inside carrying bags. To provide an ideal material for protecting displays and To provide an ideal material for protecting displays and touch panels, AGC Group has developed a cover glass that touch panels, AGC Group has developed a cover glass that realizes a level of strength far beyond that of conventionally realizes a level of strength far beyond that of conventionally used soda-lime glass, and a highly scratch-resistant, glossy used soda-lime glass, and a highly scratch-resistant, glossy texture impossible to attain with resin display covers. texture impossible to attain with resin display covers. With a Proactive Approach from Customers’ With a Proactive Approach from Customers’ Product Design Stage, Seeking Materials Needed Product Design Stage, Seeking Materials Needed in the Next Generation in the Next Generation Development of Dragontrail™ commenced in December Development of Dragontrail™ commenced in December 2007. After listening to opinions from the industrial design 2007. After listening to opinions from the industrial design division of an electronic device manufacturer who stresses division of an electronic device manufacturer who stresses the importance of advanced design and the texture of the importance of advanced design and the texture of materials, the AGC Group came to recognize the need for materials, the AGC Group came to recognize the need for a completely new cover glass like nothing seen before— a completely new cover glass like nothing seen before— strong enough not to break even if dropped, and with a strong enough not to break even if dropped, and with a texture that radiates beauty and reﬁnement. texture that radiates beauty and reﬁnement. The Group’ s customers are mostly manufacturers of The Group’ s customers are mostly manufacturers of materials and components such as liquid crystal panels. In materials and components such as liquid crystal panels. In a highly innovative ﬁeld like electronic devices, however, a highly innovative ﬁeld like electronic devices, however, there are many cases in which the manufacturer of a there are many cases in which the manufacturer of a ﬁnished product decides on the raw materials and com- ﬁnished product decides on the raw materials and com- ponents used in their products. In an effort to incorporate ponents used in their products. In an effort to incorporate AGC products into the basic design of ﬁnished products, AGC products into the basic design of ﬁnished products, the AGC Group approaches not only direct customers but the AGC Group approaches not only direct customers but also the manufacturers of ﬁnished products from the initial also the manufacturers of ﬁnished products from the initial product design stage. product design stage. It was in this context that the AGC Group responded It was in this context that the AGC Group responded to the need for an all-new cover glass. Smartphones to the need for an all-new cover glass. Smartphones equipped with touch panels were only beginning to equipped with touch panels were only beginning to appear at that time, but the Group expected a bright appear at that time, but the Group expected a bright future for cover glass, and decided to cultivate it as a future for cover glass, and decided to cultivate it as a Group core product to follow its glass substrates for ﬂat- Group core product to follow its glass substrates for ﬂat- panel displays (FPDs). Using commercially successful glass panel displays (FPDs). Using commercially successful glass for chemical strengthening as a point of reference, the for chemical strengthening as a point of reference, the Group designated researchers specializing in materials Group designated researchers specializing in materials development from AGC Research Center to create glass development from AGC Research Center to create glass that is stronger and more scratch-resistant than its previ- that is stronger and more scratch-resistant than its previ- ous materials, and at the same time, brought together per- ous materials, and at the same time, brought together per- sonnel involved in sonnel involved in glass melting and glass melting and mold processing from mold processing from A G C P r o d u c t i o n A G C P r o d u c t i o n Technology Center to Technology Center to swiftly prepare for swiftly prepare for mass production. mass production. Aiming for smooth Aiming for smooth project management, project management, Dragontrail™ Dragontrail™ cover glass for cover glass for touch panels touch panels Glass substrates Glass substrates for touch panels for touch panels Glass substrates Glass substrates for display devices for display devices ings, which have a lifespan of several years to several ings, which have a lifespan of several years to several decades. In comparison, the product lifecycle of electronic decades. In comparison, the product lifecycle of electronic devices is several years at longest, and products with a devices is several years at longest, and products with a short lifespan are generally upgraded to a new model only short lifespan are generally upgraded to a new model only about half a year after their release. Accordingly, develop- about half a year after their release. Accordingly, develop- ment periods are also comparatively shorter. With no pre- ment periods are also comparatively shorter. With no pre- vious experience in such short-term development cycles, vious experience in such short-term development cycles, the AGC Group responded to customer requests to pro- the AGC Group responded to customer requests to pro- vide new prototypes within a month or even just a week. vide new prototypes within a month or even just a week. group group To create an environment conducive to swift prod- To create an environment conducive to swift prod- members in members in uct development, the AGC Group undertook various in- uct development, the AGC Group undertook various in- charge of sales and charge of sales and house measures to help the project members efﬁciently house measures to help the project members efﬁciently technology planning technology planning focus on their work. The speed of prototype production focus on their work. The speed of prototype production served as a bridge between served as a bridge between gradually improved, and in 2008, the customer adopted gradually improved, and in 2008, the customer adopted customers and the development team. customers and the development team. the Group’ s specialty glass for chemical strengthening for the Group’ s specialty glass for chemical strengthening for its new smartphones. The AGC Group began mass pro- its new smartphones. The AGC Group began mass pro- Focusing on Speeding Up Materials Development Focusing on Speeding Up Materials Development duction from that time onward. duction from that time onward. According to the Lifecycles of Customers’ Products According to the Lifecycles of Customers’ Products The AGC Group has an especially high degree of techni- The AGC Group has an especially high degree of techni- cal expertise in designing the composition of glass by cal expertise in designing the composition of glass by applying various techniques to control its material proper- applying various techniques to control its material proper- ties, including hardness, uniformity, transparency, ties, including hardness, uniformity, transparency, strength, scratch-resistance and density. In the Dragontrail strength, scratch-resistance and density. In the Dragontrail ™ project, the Group successfully achieved the composi- ™ project, the Group successfully achieved the composi- tion of the new glass after the ﬁrst six months or so. tion of the new glass after the ﬁrst six months or so. When prototypes were being evaluated by custom- When prototypes were being evaluated by custom- ers, however, problems arose related to the speed of pro- ers, however, problems arose related to the speed of pro- totype development. Products that the Group has tradi- totype development. Products that the Group has tradi- tionally dealt with were glass for automobiles and build- tionally dealt with were glass for automobiles and build- 19 19 AGC Report 2012 AGC Report 2012 AGC Report 2012 20 AGC Report 2012 20 Feature 2 Feature 2 Driving the Evolution of Smartphones and Tablet PCs Driving the Evolution of Smartphones and Tablet PCs The Future is The Future is Now with Now with ™ ™ The AGC Group introduces Dragontrail™—a The AGC Group introduces Dragontrail™—a revolutionary cover glass that is resistant to revolutionary cover glass that is resistant to scratching and shocks and keeps displays look- scratching and shocks and keeps displays look- ing pristine. The Group has drawn on its highly ing pristine. The Group has drawn on its highly advanced and diverse technologies developed advanced and diverse technologies developed over many years to create a cover glass for over many years to create a cover glass for today’ s generation. Demonstrating material today’ s generation. Demonstrating material properties never seen before, Dragontrail™ is properties never seen before, Dragontrail™ is attracting attention from device manufacturers attracting attention from device manufacturers all over the world. all over the world. M M a a r r k k e e t t E E y y e e s s Rapid Growth of the Global Markets for Rapid Growth of the Global Markets for Smartphones and Tablet PCs Smartphones and Tablet PCs The number of smartphones shipped globally shot up The number of smartphones shipped globally shot up from about 200 million units in 2009 to 500 million units from about 200 million units in 2009 to 500 million units in 2011. Likewise, shipments of tablet PCs, which took in 2011. Likewise, shipments of tablet PCs, which took the market by storm from 2010, reached almost 80 mil- the market by storm from 2010, reached almost 80 mil- lion units in 2011—around four times the amount in the lion units in 2011—around four times the amount in the previous year. Driving the trend is the introduction of previous year. Driving the trend is the introduction of 3G-capable mobile phones by major manufacturers and 3G-capable mobile phones by major manufacturers and compatible 3G services made available in countries compatible 3G services made available in countries around the world, along with the popularity of social around the world, along with the popularity of social media and the spreading usage of applications and media and the spreading usage of applications and content tailored to these devices. The markets for content tailored to these devices. The markets for smartphones and tablet PCs are expected to grow smartphones and tablet PCs are expected to grow steadily, with shipments forecast at about 1.3 billion steadily, with shipments forecast at about 1.3 billion units and about 300 million units, respectively, in 2015. units and about 300 million units, respectively, in 2015. Shipments of Smartphones and Tablet PCs Shipments of Smartphones and Tablet PCs (in-house research) (in-house research) (Millions of units) (Millions of units) 1,500 1,500 Smartphones Smartphones Tablet PCs Tablet PCs ™ ™ 1,287 1,287 1,133 1,133 Dragontrail™ is a specialty glass that Dragontrail™ is a specialty glass that i s h i g h l y r e c e p t i v e t o c h e m i c a l i s h i g h l y r e c e p t i v e t o c h e m i c a l strengthening. It is designed for use strengthening. It is designed for use as touch panel cover glass with smart- as touch panel cover glass with smart- phones, tablet PCs and other devices. phones, tablet PCs and other devices. The AGC Group has launched a pro- The AGC Group has launched a pro- motional campaign centered on the motional campaign centered on the image of a dragon for this revolution- image of a dragon for this revolution- ary new product. ary new product. 1,000 1,000 500 500 929 929 768 768 528 528 174 174 0 0 0 0 267 267 19 19 169 169 219 219 271 271 73 73 103 103 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 2015 2015 Developing Specialty Glass for Protecting Displays Developing Specialty Glass for Protecting Displays materials and components such as liquid crystal panels. In materials and components such as liquid crystal panels. In and Touch Panels from Shocks and Scratches and Touch Panels from Shocks and Scratches a highly innovative field like electronic devices, however, a highly innovative field like electronic devices, however, there are many cases in which the manufacturer of a there are many cases in which the manufacturer of a The markets for smartphones and tablet PCs equipped The markets for smartphones and tablet PCs equipped finished product decides on the raw materials and com- finished product decides on the raw materials and com- with touch panels are growing on a global scale. The with touch panels are growing on a global scale. The ponents used in their products. In an effort to incorporate ponents used in their products. In an effort to incorporate displays and touch panels of these mobile devices not displays and touch panels of these mobile devices not AGC products into the basic design of finished products, AGC products into the basic design of finished products, only need to be cared for because the LCD screen is only need to be cared for because the LCD screen is the AGC Group approaches not only direct customers but the AGC Group approaches not only direct customers but directly touched during operations, but they also require directly touched during operations, but they also require also the manufacturers of finished products from the initial also the manufacturers of finished products from the initial protection from shocks that can result from dropping the protection from shocks that can result from dropping the product design stage. product design stage. device while on the move, and scratches that might occur device while on the move, and scratches that might occur It was in this context that the AGC Group responded It was in this context that the AGC Group responded from scraping inside carrying bags. from scraping inside carrying bags. to the need for an all-new cover glass. Smartphones to the need for an all-new cover glass. Smartphones To provide an ideal material for protecting displays and To provide an ideal material for protecting displays and equipped with touch panels were only beginning to equipped with touch panels were only beginning to touch panels, AGC Group has developed a cover glass that touch panels, AGC Group has developed a cover glass that appear at that time, but the Group expected a bright appear at that time, but the Group expected a bright realizes a level of strength far beyond that of conventionally realizes a level of strength far beyond that of conventionally future for cover glass, and decided to cultivate it as a future for cover glass, and decided to cultivate it as a used soda-lime glass, and a highly scratch-resistant, glossy used soda-lime glass, and a highly scratch-resistant, glossy Group core product to follow its glass substrates for flat- Group core product to follow its glass substrates for flat- texture impossible to attain with resin display covers. texture impossible to attain with resin display covers. panel displays (FPDs). Using commercially successful glass panel displays (FPDs). Using commercially successful glass With a Proactive Approach from Customers’ With a Proactive Approach from Customers’ Group designated researchers specializing in materials Group designated researchers specializing in materials Product Design Stage, Seeking Materials Needed Product Design Stage, Seeking Materials Needed development from AGC Research Center to create glass development from AGC Research Center to create glass for chemical strengthening as a point of reference, the for chemical strengthening as a point of reference, the in the Next Generation in the Next Generation that is stronger and more scratch-resistant than its previ- that is stronger and more scratch-resistant than its previ- ous materials, and at the same time, brought together per- ous materials, and at the same time, brought together per- Development of Dragontrail™ commenced in December Development of Dragontrail™ commenced in December sonnel involved in sonnel involved in 2007. After listening to opinions from the industrial design 2007. After listening to opinions from the industrial design glass melting and glass melting and division of an electronic device manufacturer who stresses division of an electronic device manufacturer who stresses mold processing from mold processing from the importance of advanced design and the texture of the importance of advanced design and the texture of A G C P r o d u c t i o n A G C P r o d u c t i o n materials, the AGC Group came to recognize the need for materials, the AGC Group came to recognize the need for Technology Center to Technology Center to a completely new cover glass like nothing seen before— a completely new cover glass like nothing seen before— swiftly prepare for swiftly prepare for strong enough not to break even if dropped, and with a strong enough not to break even if dropped, and with a mass production. mass production. texture that radiates beauty and refinement. texture that radiates beauty and refinement. Aiming for smooth Aiming for smooth The Group’ s customers are mostly manufacturers of The Group’ s customers are mostly manufacturers of project management, project management, Dragontrail™ Dragontrail™ cover glass for cover glass for touch panels touch panels Glass substrates Glass substrates for touch panels for touch panels Glass substrates Glass substrates for display devices for display devices group group members in members in charge of sales and charge of sales and technology planning technology planning served as a bridge between served as a bridge between customers and the development team. customers and the development team. Focusing on Speeding Up Materials Development Focusing on Speeding Up Materials Development According to the Lifecycles of Customers’ Products According to the Lifecycles of Customers’ Products The AGC Group has an especially high degree of techni- The AGC Group has an especially high degree of techni- cal expertise in designing the composition of glass by cal expertise in designing the composition of glass by applying various techniques to control its material proper- applying various techniques to control its material proper- ties, including hardness, uniformity, transparency, strength, ties, including hardness, uniformity, transparency, strength, scratch-resistance and density. In the Dragontrail™ project, scratch-resistance and density. In the Dragontrail™ project, the Group successfully achieved the composition of the new the Group successfully achieved the composition of the new glass after the first six months or so. glass after the first six months or so. When prototypes were being evaluated by custom- When prototypes were being evaluated by custom- ers, however, problems arose related to the speed of pro- ers, however, problems arose related to the speed of pro- totype development. Products that the Group has tradi- totype development. Products that the Group has tradi- tionally dealt with were glass for automobiles and build- tionally dealt with were glass for automobiles and build- ings, which have a lifespan of several years to several ings, which have a lifespan of several years to several decades. In comparison, the product lifecycle of electronic decades. In comparison, the product lifecycle of electronic devices is several years at longest, and products with a devices is several years at longest, and products with a short lifespan are generally upgraded to a new model only short lifespan are generally upgraded to a new model only about half a year after their release. Accordingly, develop- about half a year after their release. Accordingly, develop- ment periods are also comparatively shorter. With no pre- ment periods are also comparatively shorter. With no pre- vious experience in such short-term development cycles, vious experience in such short-term development cycles, the AGC Group responded to customer requests to pro- the AGC Group responded to customer requests to pro- vide new prototypes within a month or even just a week. vide new prototypes within a month or even just a week. To create an environment conducive to swift prod- To create an environment conducive to swift prod- uct development, the AGC Group undertook various in- uct development, the AGC Group undertook various in- house measures to help the project members efficiently house measures to help the project members efficiently focus on their work. The speed of prototype production focus on their work. The speed of prototype production gradually improved, and in 2008, the customer adopted gradually improved, and in 2008, the customer adopted the Group’ s specialty glass for chemical strengthening for the Group’ s specialty glass for chemical strengthening for its new smartphones. The AGC Group began mass pro- its new smartphones. The AGC Group began mass pro- duction from that time onward. duction from that time onward. 19 19 AGC Report 2012 AGC Report 2012 AGC Report 2012 20 AGC Report 2012 20 Feature 2 Feature 2 Driving the Evolution of Smartphones and Tablet PCs Driving the Evolution of Smartphones and Tablet PCs The Future is Now with The Future is Now with ™ ™ Key Technology Key Technology Mass Production and Larger Sized Glass Sheets Mass Production and Larger Sized Glass Sheets Optimally Achieved with the Float Method Optimally Achieved with the Float Method The ﬂoat method is a means to form glass by horizontally ﬂoat- The ﬂoat method is a means to form glass by horizontally ﬂoat- ing it on molten tin from a large furnace. Highly suitable for ing it on molten tin from a large furnace. Highly suitable for large volume and large-sized glass production, the ﬂoat large volume and large-sized glass production, the ﬂoat method is widely used to manufacture architectural and auto- method is widely used to manufacture architectural and auto- motive glass. The AGC Group succeeded in the mass produc- motive glass. The AGC Group succeeded in the mass produc- tion of FPD glass substrates by the ﬂoat method for the ﬁrst tion of FPD glass substrates by the ﬂoat method for the ﬁrst time in the world, and successfully increased both area size time in the world, and successfully increased both area size and productivity of FPD glass substrates. Today, this method is and productivity of FPD glass substrates. Today, this method is fully utilized in efﬁcient mass-production of Dragontrail™. fully utilized in efﬁcient mass-production of Dragontrail™. The Float Method for Flat Glass Production The Float Method for Flat Glass Production Opening for feeding raw glass materials Opening for feeding raw glass materials Reﬁning Furnace Reﬁning Furnace Annealing Annealing Melting Furnace Melting Furnace Float bath (cross-section view) Float bath (cross-section view) Regenerator Regenerator Glass Glass Molten Tin Molten Tin In January 2011, the AGC Group announced In January 2011, the AGC Group announced worldwide that it would capitalize on the rapidly grow- worldwide that it would capitalize on the rapidly grow- ing demand for smartphones and tablet PCs with a ing demand for smartphones and tablet PCs with a newly developed specialty glass designed especially for newly developed specialty glass designed especially for these devices. Calling the product “Dragontrail™,” the these devices. Calling the product “Dragontrail™,” the Group held press conferences in various places around Group held press conferences in various places around the world. the world. Establishing a Stable Supply System to Establishing a Stable Supply System to Meet Growing Demand Meet Growing Demand Customers have lauded Dragontrail™ not only for its Customers have lauded Dragontrail™ not only for its excellent strength and scratch-resistance, but also excellent strength and scratch-resistance, but also because it can be manufactured efﬁciently using the ﬂoat because it can be manufactured efﬁciently using the ﬂoat method, a manufacturing process that is best suited for method, a manufacturing process that is best suited for producing large volumes of ﬂat glass. New ﬂoat glass producing large volumes of ﬂat glass. New ﬂoat glass facilities were installed at the Group’ s Takasago Plant in facilities were installed at the Group’ s Takasago Plant in December 2011, thereby improving the Group’ s ability December 2011, thereby improving the Group’ s ability to offer a stable supply of the product in line with grow- to offer a stable supply of the product in line with grow- ing demand. ing demand. Along with this effort to keep Along with this effort to keep Dragontrail™ in stable supply and Dragontrail™ in stable supply and further improve product performance, further improve product performance, the AGC Group is working to develop the AGC Group is working to develop and provide high-value-added materi- and provide high-value-added materi- als that are ahead of their time, with als that are ahead of their time, with the view to broaden the applications the view to broaden the applications for this product as cover glass not only for smartphones for this product as cover glass not only for smartphones and tablet PCs but also computer displays, car navigation and tablet PCs but also computer displays, car navigation systems and ﬂat-panel televisions. systems and ﬂat-panel televisions. Cutting Cutting Words from Key Personnel Involved in the Dragontrail™ Project Words from Key Personnel Involved in the Dragontrail™ Project Responding to the Growing Responding to the Growing Usage of Touch Panels by Usage of Touch Panels by Providing Cover Glass Best Providing Cover Glass Best Suited for All Applications Suited for All Applications Nobuhiko Imajyo Nobuhiko Imajyo General Manager, Business Planning Ofﬁce, General Manager, Business Planning Ofﬁce, Electronics Company Electronics Company Today, touch panel operation is not limited to smartphones Today, touch panel operation is not limited to smartphones and tablet PCs, but is also used in a variety of electronic prod- and tablet PCs, but is also used in a variety of electronic prod- ucts, including digital cameras and multifunction remote con- ucts, including digital cameras and multifunction remote con- trols for televisions and hard disk recorders. In the ﬁeld of trols for televisions and hard disk recorders. In the ﬁeld of personal computers, the recent Ultrabook™1 incorporates personal computers, the recent Ultrabook™1 incorporates both a keyboard and a touch panel. Furthermore, with new both a keyboard and a touch panel. Furthermore, with new operating systems that support touch panel operations sched- operating systems that support touch panel operations sched- uled for release in this year, notebook PCs equipped with uled for release in this year, notebook PCs equipped with touch panel operability are expected to enter the mainstream. touch panel operability are expected to enter the mainstream. Similarly, in the automotive industry, vehicle console panels are Similarly, in the automotive industry, vehicle console panels are being ﬁtted with touch panels, and all kinds of equipment, being ﬁtted with touch panels, and all kinds of equipment, including car stereos, navigations systems and air conditioners including car stereos, navigations systems and air conditioners are being developed to incorporate indicators and touch are being developed to incorporate indicators and touch panels. As the usages of such displays and touch panels panels. As the usages of such displays and touch panels expand, the AGC Group is capitalizing on the properties of expand, the AGC Group is capitalizing on the properties of Dragontrail™, which can be produced in various thicknesses, Dragontrail™, which can be produced in various thicknesses, with the plan to broaden its applications in even more ﬁelds. with the plan to broaden its applications in even more ﬁelds. Dragontrail™ offers the potential to contribute to the design Dragontrail™ offers the potential to contribute to the design of all of these devices. It can be of all of these devices. It can be used not only as the main glass used not only as the main glass component of smartphones, component of smartphones, for instance, but could also be for instance, but could also be considered for designs that considered for designs that cover the entire body of a cover the entire body of a phone in glass. phone in glass. 1 Ultrabook™ is a registered 1 Ultrabook™ is a registered trademark of Intel Corporation trademark of Intel Corporation Dragontrail™ used in automotive Dragontrail™ used in automotive applications applications Dragontrail™ Featured in a Range of Media in Dragontrail™ Featured in a Range of Media in Japan and Overseas Japan and Overseas “Dragontrail™ is multiple times stronger than soda-lime “Dragontrail™ is multiple times stronger than soda-lime glass commonly used in windows, resists scratches and has glass commonly used in windows, resists scratches and has a ‘beautiful, pristine’ ﬁnish. A brief test by AP proved a ‘beautiful, pristine’ ﬁnish. A brief test by AP proved impressive, with the glass showing virtually no damage after impressive, with the glass showing virtually no damage after being scratched hard for several seconds with a key.”—Japan being scratched hard for several seconds with a key.”—Japan Times (AP/Aﬂo), January 22, 2011 edition Times (AP/Aﬂo), January 22, 2011 edition “The AGC Group will develop “Dragontrail™,” a cover glass “The AGC Group will develop “Dragontrail™,” a cover glass for touchscreen panels, into a new pillar of earnings... The for touchscreen panels, into a new pillar of earnings... The press conference for the product was held with simultaneous press conference for the product was held with simultaneous interpretation into English. In addition, the press release was interpretation into English. In addition, the press release was issued not only in Japan but also in Europe, the United States, issued not only in Japan but also in Europe, the United States, China, South Korea and Chinese Taipei. Such a multilingual China, South Korea and Chinese Taipei. Such a multilingual announcement is not usual for the AGC Group, indicating the announcement is not usual for the AGC Group, indicating the strong emphasis that the Group places on the product.—Nikkei strong emphasis that the Group places on the product.—Nikkei Sangyo Shimbun, January 25, 2011 edition Sangyo Shimbun, January 25, 2011 edition Note English translation by Asahi Glass Note English translation by Asahi Glass Dragontrail™ attracted considerable Dragontrail™ attracted considerable interest from the many visitors to the interest from the many visitors to the AGC exhibit at SID Display Week AGC exhibit at SID Display Week 2011, the Society for Information 2011, the Society for Information Display’s Symposium, Seminar, and Display’s Symposium, Seminar, and Exhibition, held in Los Angeles, Exhibition, held in Los Angeles, United States, in May 2011. United States, in May 2011. A video presentation of Dragontrail™, including a video showing its A video presentation of Dragontrail™, including a video showing its strength against a hammer blow, is available on YouTube™1. strength against a hammer blow, is available on YouTube™1. 1 YouTube™ is a registered trademark of Google Corporation. 1 YouTube™ is a registered trademark of Google Corporation. Dragontrail™ Receives the 2011 Nikkei Dragontrail™ Receives the 2011 Nikkei Superior Products and Services Award2 from Superior Products and Services Award2 from the Nikkei Sangyo Shimbun and Praise from the Nikkei Sangyo Shimbun and Praise from the Review Committee the Review Committee Comments from the Review Committee Comments from the Review Committee Ken Sakamura Ken Sakamura Professor, University of Tokyo Interfaculty Initiative in Information Studies Professor, University of Tokyo Interfaculty Initiative in Information Studies “While overseas companies are increasing their presence in “While overseas companies are increasing their presence in recent years, these award-winning products reminded me recent years, these award-winning products reminded me that Japan still has a number of technologies that we can be that Japan still has a number of technologies that we can be proud of to the world. The materials- and parts-related tech- proud of to the world. The materials- and parts-related tech- nology, which Japan has been good at, is also evolving every nology, which Japan has been good at, is also evolving every year, and AGC’ s “Dragontrail” is the very symbol of such year, and AGC’ s “Dragontrail” is the very symbol of such advancement. It is a world-class product that addresses the advancement. It is a world-class product that addresses the expanding market for smart phones.”—Nikkei Sangyo expanding market for smart phones.”—Nikkei Sangyo Shimbun, January 4, 2012 edition (partial excerpt) Shimbun, January 4, 2012 edition (partial excerpt) Note English translation by Asahi Glass Note English translation by Asahi Glass 2 An award given to particularly outstanding new products and services from 2 An award given to particularly outstanding new products and services from those published in the range of Nikkei Inc. media concerns in 2011 those published in the range of Nikkei Inc. media concerns in 2011 21 21 AGC Report 2012 AGC Report 2012 AGC Report 2012 22 AGC Report 2012 22 Float bath (cross-section view)Melting FurnaceCuttingOpening for feeding raw glass materialsAnnealingRefining FurnaceRegeneratorGlassMolten TinIn January 2011, the AGC Group announced worldwide that it would capitalize on the rapidly grow-ing demand for smartphones and tablet PCs with a newly developed specialty glass designed especially for these devices. Calling the product “Dragontrail™,” the Group held press conferences in various places around the world.Customers have lauded Dragontrail™ not only for its excellent strength and scratch-resistance, but also because it can be manufactured efficiently using the float method, a manufacturing process that is best suited for producing large volumes of flat glass. New float glass facilities were installed at the Group’s Takasago Plant in December 2011, thereby improving the Group’s ability to offer a stable supply of the product in line with grow-ing demand. Along with this effort to keep Dragontrail™ in stable supply and further improve product performance, the AGC Group is working to develop and provide high-value-added materi-als that are ahead of their time, with the view to broaden the applications for this product as cover glass not only for smartphones and tablet PCs but also computer displays, car navigation systems and flat-panel televisions.“Dragontrail™ is multiple times stronger than soda-lime glass commonly used in windows, resists scratches and has a ‘beautiful, pristine’ finish. A brief test by AP proved impressive, with the glass showing virtually no damage after being scratched hard for several seconds with a key.”—Japan Times (AP/Aflo), January 22, 2011 edition“The AGC Group will develop “Dragontrail™,” a cover glass for touchscreen panels, into a new pillar of earnings... The press conference for the product was held with simultaneous interpretation into English. In addition, the press release was issued not only in Japan but also in Europe, the United States, China, South Korea and Taiwan. Such a multilingual announcement is not usual for the AGC Group, indicating the strong emphasis that the Group places on the product.—Nikkei Sangyo Shimbun, January 25, 2011 editionNote English translation by Asahi Glass“While overseas companies are increasing their presence in recent years, these award-winning products reminded me that Japan still has a number of technologies that we can be proud of to the world. The materials- and parts-related tech-nology, which Japan has been good at, is also evolving every year, and AGC’s “Dragontrail” is the very symbol of such advancement. It is a world-class product that addresses the expanding market for smart phones.”—Nikkei Sangyo Shimbun, January 4, 2012 edition (partial excerpt)Note English translation by Asahi Glass2 An award given to particularly outstanding new products and services from those published in the range of Nikkei Inc. media concerns in 2011A video presentation of Dragontrail™, including a video showing its strength against a hammer blow, is available on YouTube™1.Dragontrail™ attracted considerable interest from the many visitors to the AGC exhibit at SID Display Week 2011, the Society for Information Display’s Symposium, Seminar, and Exhibition, held in Los Angeles, United States, in May 2011.1 YouTube™ is a registered trademark of Google Corporation.Comments from the Review CommitteeKen Sakamura Professor, University of Tokyo Interfaculty Initiative in Information StudiesThe float method is a means to form glass by horizontally float-ing it on molten tin from a large furnace. Highly suitable for large volume and large-sized glass production, the float method is widely used to manufacture architectural and auto-motive glass. The AGC Group succeeded in the mass produc-tion of FPD glass substrates by the float method for the first time in the world, and successfully increased both area size and productivity of FPD glass substrates. Today, this method is fully utilized in efficient mass-production of Dragontrail™.Today, touch panel operation is not limited to smartphones and tablet PCs, but is also used in a variety of electronic prod-ucts, including digital cameras and multifunction remote con-trols for televisions and hard disk recorders. In the field of personal computers, the recent Ultrabook™1 incorporates both a keyboard and a touch panel. Furthermore, with new operating systems that support touch panel operations sched-uled for release in this year, notebook PCs equipped with touch panel operability are expected to enter the mainstream. Similarly, in the automotive industry, vehicle console panels are being fitted with touch panels, and all kinds of equipment, including car stereos, navigations systems and air conditioners are being developed to incorporate indicators and touch panels. As the usages of such displays and touch panels expand, the AGC Group is capitalizing on the properties of Dragontrail™, which can be produced in various thicknesses, with the plan to broaden its applications in even more fields.Dragontrail™ offers the potential to contribute to the design of all of these devices. It can be used not only as the main glass component of smartphones, for instance, but could also be considered for designs that cover the entire body of a phone in glass.Dragontrail™ used in automotive applications1 Ultrabook™ is a registered trademark of Intel CorporationThe Float Method for Flat Glass ProductionMass Production and Larger Sized Glass Sheets Optimally Achieved with the Float MethodGeneral Manager, Business Planning Office, Electronics CompanyNobuhiko ImajyoKey TechnologyWords from Key Personnel Involved in the Dragontrail™ ProjectDragontrail™ Featured in a Range of Media in Japan and OverseasDragontrail™ Receives the 2011 Nikkei Superior Products and Services Award2 from theNikkei Sangyo Shimbun and Praise from the Review CommitteeDriving the Evolution of Smartphones and Tablet PCsThe Future is Now with Feature 2™Establishing a Stable Supply System to Meet Growing DemandResponding to the Growing Usage of Touch Panels by Providing Cover Glass Best Suited for All ApplicationsAGC Report 2012 21AGC Report 2012 221Chapter Business Overview The AGC Group contributes to the realization of a sustainable society through its various business activities, such as glass, electronics, and chemicals. Operations Sales Ratio Products/Services (Market Share of Primary Products) Activity Highlights Technology Environment Global Business Glass Operations 46% Electronics Operations 32% Chemicals Operations 20% • Flat glass No.1 in World Float glass, low-emissivity (Low-E) glass, double glazing glass for solar control/heat-insulation, safety glass, decorative glass, glass for solar power systems • Automotive glass No.1 in World Tempered automotive glass, laminated automotive glass • Display glass Glass substrates for LCD-TFTs No.2 in World Glass substrates for PDPs No.1 in World Specialty glass for display applications, glass substrates for display devices, display-related materials • Electronics materials and parts CMP slurry, glass frit and paste, aspherical glass lenses (micro glass), Carboglass™, synthetic quartz glass, optical thin-ﬁlm products • Chlor-alkali & urethane Raw materials for vinyl chloride polymer, caustic soda, urethane materials • Fluorochemicals & specialty chemicals Fluoropolymers (ETFE) No.1 in World Water and oil repellents, pharmaceutical and agrochemical intermediates and active ingredients, iodine-related products, battery materials Ceramics/ Others • Ceramics Various refractory materials, ﬁne ceramics, sputtering targets • Logistics / Engineering 2% • UV-blocking tempered glass “UV Verre • Low-E double-glazing glass contributes to • Entering the Brazilian market P. 15 Premium™” automotive glass eliminates approximately 99% of UV rays P. 27 pleasant living that’s easier on the environment P. 28 • Stopray Ultravision™ 50 is a high-performance Magneton coated glass with a triple silver coating • Total oxygen combustion dramatically improves combustion efﬁciency during glass production P. 63 • In-ﬂight melting greatly reduces the amount of CO2 emitted during glass manufacturing P. 63 • Russia—One of the world’s largest glass manufacturing facilities P. 27 • 0.1 mm ultra-thin glass, the world's thinnest • Glass-ceramics substrate “GCHP™” glass manufactured by the ﬂoat method contributes to evolution of LED lighting • Strengthening production in China for TFT-LCD glass substrates P. 32 P. 31 P. 31 • “Dragontrail™”, specialty glass for chemical strengthening P. 19 • Glass frit and paste contribute to improved electrical properties as electrode binders for photovoltaic devices P. 38 • China (Shenzhen)—Setting up a production line for TFT-LCD glass substrates P. 32 • Strengthening of pharmaceutical and agrochemical intermediates and active ingredients operations through ﬂuorochemical technology P. 35 • Fluorine ion-exchange membrane • New production and sales site for “Flemion™” to be used in the bilateral cathode materials for lithium-ion batteries offset credit system P. 35 to be constructed in China • 30% expansion of electrolysis capacity in Indonesia P. 36 Japan Mexico • CO2 emissions cut through introduction of gas turbines • Implementation of CO2 recovery and recycling process using caustic soda • Sputtering targets for transparent conductive thin ﬁlm for photovoltaic TCO glass substrates P. 38 23 AGC Report 2012 AGC Report 2012 24 1Chapter Business Overview The AGC Group contributes to the realization of a sustainable society through its various business activities, such as glass, electronics, and chemicals. Operations Sales Ratio Products/Services (Market Share of Primary Products) Activity Highlights Technology Environment Global Business Glass Operations 46% • UV-blocking tempered glass “UV Verre • Low-E double-glazing glass contributes to • Entering the Brazilian market P. 15 Premium™” automotive glass eliminates approximately 99% of UV rays P. 27 pleasant living that’s easier on the environment P. 28 • Stopray Ultravision™ 50 is a high-performance Magneton coated glass with a triple silver coating • Total oxygen combustion dramatically improves combustion efficiency during glass production P. 63 • In-flight melting greatly reduces the amount of CO2 emitted during glass manufacturing P. 63 • Russia—One of the world’s largest glass manufacturing facilities P. 27 • 0.1 mm ultra-thin glass, the world's thinnest glass manufactured by the float method • Glass-ceramics substrate “GCHP™” contributes to evolution of LED lighting • Strengthening production in China for TFT-LCD glass substrates P. 32 P. 31 P. 31 Electronics Operations 32% • “Dragontrail™”, specialty glass for chemical P. 19 strengthening • Glass frit and paste contribute to improved electrical properties as electrode binders for photovoltaic devices P. 38 • China (Shenzhen)—Setting up a production line for TFT-LCD glass substrates P. 32 Chemicals Operations 20% Ceramics/ Others • Ceramics Various refractory materials, fine ceramics, sputtering targets • Logistics / Engineering 2% • Strengthening of pharmaceutical and • Fluorine ion-exchange membrane • New production and sales site for agrochemical intermediates and active ingredients operations through fluorochemical technology P. 35 “Flemion™” to be used in the bilateral offset credit system P. 35 cathode materials for lithium-ion batteries to be constructed in China • 30% expansion of electrolysis capacity in Indonesia P. 36 Japan Mexico • CO2 emissions cut through introduction of gas turbines • Implementation of CO2 recovery and recycling process using caustic soda • Sputtering targets for transparent conductive thin film for photovoltaic TCO glass substrates P. 38 • Flat glass No.1 in World Float glass, low-emissivity (Low-E) glass, double glazing glass for solar control/heat-insulation, safety glass, decorative glass, glass for solar power systems • Automotive glass No.1 in World Tempered automotive glass, laminated automotive glass • Display glass Glass substrates for LCD-TFTs No.2 in World Glass substrates for PDPs No.1 in World Specialty glass for display applications, glass substrates for display devices, display-related materials • Electronics materials and parts CMP slurry, glass frit and paste, aspherical glass lenses (micro glass), Carboglass™, synthetic quartz glass, optical thin-film products • Chlor-alkali & urethane Raw materials for vinyl chloride polymer, caustic soda, urethane materials • Fluorochemicals & specialty chemicals Fluoropolymers (ETFE) No.1 in World Water and oil repellents, pharmaceutical and agrochemical intermediates and active ingredients, iodine-related products, battery materials 23 AGC Report 2012 AGC Report 2012 24 Sunergy™, pyrolytic coatedglass, from the Glass Company were used for Naberezhnaya Tower in Moscow (Russia)Glass Operations consist of businesses centered on the ﬁelds of ﬂat glass and automotive glass. In the ﬂat glass business, the AGC Group offers an array of ﬂat glass products that meet the needs of each region: ﬂoat glass, fabricated glass for architectural use, decorative glass, glass for solar power systems and other products. Emphasis is also placed on energy-saving glass products that can contribute to the reduction of environmen-tal impact, including products with heat insulation/shielding features and CSP glass mirrors.In the automotive glass business, global marketing and the Group’s most advanced technologies are utilized in the pursuit of value-greater safety, excellent design, interior comfort and environmental performance. The value-added automotive glass products the AGC Group offers include UV-cut glass, IR-cut glass, and glass antennae. The Group’s ﬂat glass and automotive glass (new vehicle market) businesses hold a leading share of the world market. In ﬁscal 2011, the Group’s sales for the ﬂat glass sector and the automotive glass sector were 325.4 billion yen and 229 billion yen respectively, resulting in net sales of 554.4 billion yen and operating income of 9.9 billion yen for the Glass Operations.525.0570.9554.4Automotive glass41%Flat glass59%Sector-Based Sales Share6004000300200100500200920102011Sales Trends(Billion yen)GlassOperationssales554.4billion yen(FY)Low emissivity (Low-E) double glazing glassPhotovoltaic cover glass “Solite™”“Vitro Color Glass™” and “Lacobel™” for interior wall cladding“UV Verre Premium™” for automotive glassAround the world, the AGC Group provides high-performance products that bring new value to the ﬁelds of construction, automobiles, and solar power generation.Glass OperationsBusinessOverviewChapter 1Description of BusinessMarket share rankings of major products (AGC estimates)Flat glassAutomotive glassNo. 1 worldwideNo. 1 worldwideChemicalsOperationsElectronicsOperationsGlassOperationsCeramics/OthersAGC Report 2012 25AGC Report 2012 26Sunergy™, pyrolytic coatedglass, from the Glass Company were used for Naberezhnaya Tower in Moscow (Russia)Glass Operations consist of businesses centered on the fields of flat glass and automotive glass. In the flat glass business, the AGC Group offers an array of flat glass products that meet the needs of each region: float glass, fabricated glass for architectural use, decorative glass, glass for solar power systems and other products. Emphasis is also placed on energy-saving glass products that can contribute to the reduction of environmen-tal impact, including products with heat insulation/shielding features and CSP glass mirrors.In the automotive glass business, global marketing and the Group’s most advanced technologies are utilized in the pursuit of value-greater safety, excellent design, interior comfort and environmental performance. The value-added automotive glass products the AGC Group offers include UV-cut glass, IR-cut glass, and glass antennae. The Group’s flat glass and automotive glass (new vehicle market) businesses hold a leading share of the world market. In fiscal 2011, the Group’s sales for the flat glass sector and the automotive glass sector were 325.4 billion yen and 229 billion yen respectively, resulting in net sales of 554.4 billion yen and operating income of 9.9 billion yen for the Glass Operations.525.0570.9554.4Automotive glass41%Flat glass59%Sector-Based Sales Share6004000300200100500200920102011Sales Trends(Billion yen)GlassOperationssales554.4billion yen(FY)Low emissivity (Low-E) double-glazing glassPhotovoltaic cover glass “Solite™”“Vitro Color Glass™” and “Lacobel™” for interior wall cladding“UV Verre Premium™” for automotive glassAround the world, the AGC Group provides high-performance products that bring new value to the fields of construction, automobiles, and solar power generation.Glass OperationsBusinessOverviewChapter 1Description of BusinessMarket share rankings of major products (AGC estimates)Flat glassAutomotive glassNo. 1 worldwideNo. 1 worldwideChemicalsOperationsElectronicsOperationsGlassOperationsCeramics/OthersAGC Report 2012 25AGC Report 2012 26Glass Operations Electronics Operations Chemicals Operations Ceramics/ Others Environment the Environment Low-E Double-glazing Glass Contributes to Pleasant Living That’s Easier on Low-E double-glazing glass is energy-saving window glass in example, Stopray Ultravision 50 is a new energy-saving window which the heat insulating and solar control performance of glass with three layers of silver coating. This product realizes double-glazing glass have been further improved by coating extremely high selectivity in solar energy transmittance, blocking one pane with a special metallic film. As general environmental solar heat from outside at a level of 20% while allowing about awareness has risen in recent years, strict standards for heat 50% of visible light to penetrate. Stopray Ultravision 50 is a beau- insulation have been introduced for window glass in homes tiful and highly efficient glass that leads the latest trends in archi- and buildings, particularly in Europe and North America. tectural design and satisfies demands for energy conservation. Low-E double-glazing glass helps reduce energy consumption, The AGC Group will continue to introduce state-of-the-art coat- and its popularity is growing around the world. In response to ing technologies and strive to develop even higher-performing these needs, the AGC Group provides energy-saving glass for products, developing and providing ideal Low-E double-glazing use in the apertures of a variety of houses and buildings. For glass for every region. Low-E Double-glazing Glass Structure Special metallic film Glass Low-E Double-glazing Glass Mechanism In warm/hot regions: In summer, effec- tively shields solar radiation and heat f r o m t h e o u t s i d e (solar control effect), reducing air condi- tioning use. Spacer Air space In cold regions: In winter, effectively blocks cold air from entering and warm air from escaping ( h e a t i n s u l a t i n g e f f e c t ) , r e d u c i n g heater use. Chapter 1 Business Overview Glass Operations Activity Highlights Technology UV-blocking tempered glass “UV Verre Premium™” automotive glass eliminates approximately 99% of UV rays Winner, Nikkan Kogyo Shimbun’s “10 Best New Products of 2011” Award Concern for health and beauty is resulting in mounting con- sciousness of protection from ultraviolet (UV) rays. In an inde- pendent AGC Group survey of drivers, many female drivers said that they “were concerned about UV rays” in the areas around car windows. In response to these customer concerns, the Group began to develop high-performance UV-cut glass for car windows. After overcoming many technological chal- lenges, the Group successfully developed a high-performance UV absorbent with scratch-resistant properties. The commer- cial production of “UV Verre Premium™” began in December 2010. It is the first tempered automotive glass for automotive door windows in the world1 to cut approximately 99% of UV rays2. Since its release, UV Verre Premium™ has been rated highly by car manufacturers, and it is being used in an increas- ingly wide variety of cars, including the latest hybrids. 1 As of December 2010; survey conducted by AGC. 2 Measured by AGC based on ISO 9050 standards. UV Verre Premium™ A test with a UV checker, which reacts when exposed to ultraviolet rays. The UV checker turned purple when the window was opened; when shielded by UV Verre Premium™, the color fades away. Exterior Interior Exterior Interior Global Business Operating in Russia, the World’s Largest Glass Manufacturing Facility At the AGC Group’ s Klin Plant, located approximately 80 km northwest of Russia’ s capital, Moscow, the Group operates the largest glass manufacturing facility in the world. This facility was created to handle the future growth anticipated in the Russian construction market, and is capable of producing 1,000 tons of glass per day, in thicknesses ranging from 4 to 12 mm. The plant also holds processing facilities for high- performance heat-insulating coated glass, laminated glass and decorative glass, enabling the production of high value-added products. Particular to the plant are technological innovations incorporated throughout the plant to efficiently turn out high quality products, as is the ability to reduce energy consump- tion during production. The AGC Group will continue to advance into regions in which market expansion is anticipated and actively expand its production capacity. Klin Plant Russia Moscow Klin Plant, located approximately 80 km northwest of Moscow One of the largest glass manufacturing facilities in the world, in the Klin Plant 27 AGC Report 2012 AGC Report 2012 28 Technology Environment Glass Operations Electronics Operations Chemicals Operations Ceramics/ Others Low-E Double-glazing Glass Contributes to Pleasant Living That’s Easier on the Environment Low-E double-glazing glass is energy-saving window glass in which the heat insulating and solar control performance of double-glazing glass have been further improved by coating one pane with a special metallic film. As general environmental awareness has risen in recent years, strict standards for heat insulation have been introduced for window glass in homes and buildings, particularly in Europe and North America. Low-E double-glazing glass helps reduce energy consumption, and its popularity is growing around the world. In response to these needs, the AGC Group provides energy-saving glass for use in the apertures of a variety of houses and buildings. For example, Stopray Ultravision 50 is a new energy-saving window glass with three layers of silver coating. This product realizes extremely high selectivity in solar energy transmittance, blocking solar heat from outside at a level of 20% while allowing about 50% of visible light to penetrate. Stopray Ultravision 50 is a beau- tiful and highly efficient glass that leads the latest trends in archi- tectural design and satisfies demands for energy conservation. The AGC Group will continue to introduce state-of-the-art coat- ing technologies and strive to develop even higher-performing products, developing and providing ideal Low-E double-glazing glass for every region. Low-E Double-glazing Glass Structure Special metallic film Glass Spacer Air space Low-E Double-glazing Glass Mechanism In warm/hot regions: In summer, effec- tively shields solar radiation and heat f r o m t h e o u t s i d e (solar control effect), reducing air condi- tioning use. Exterior Interior In cold regions: In winter, effectively blocks cold air from entering and warm air from escaping ( h e a t i n s u l a t i n g e f f e c t ) , r e d u c i n g heater use. Exterior Interior Chapter 1 Business Overview Glass Operations Activity Highlights UV-blocking tempered glass “UV Verre Premium™” automotive glass eliminates approximately 99% of UV rays Winner, Nikkan Kogyo Shimbun’s “10 Best New Products of 2011” Award Concern for health and beauty is resulting in mounting con- cial production of “UV Verre Premium™” began in December sciousness of protection from ultraviolet (UV) rays. In an inde- 2010. It is the first tempered automotive glass for automotive pendent AGC Group survey of drivers, many female drivers door windows in the world1 to cut approximately 99% of UV said that they “were concerned about UV rays” in the areas rays2. Since its release, UV Verre Premium™ has been rated around car windows. In response to these customer concerns, highly by car manufacturers, and it is being used in an increas- the Group began to develop high-performance UV-cut glass ingly wide variety of cars, including the latest hybrids. for car windows. After overcoming many technological chal- 1 As of December 2010; survey conducted by AGC. lenges, the Group successfully developed a high-performance 2 Measured by AGC based on ISO 9050 standards. UV absorbent with scratch-resistant properties. The commer- UV Verre Premium™ A test with a UV checker, which reacts when exposed The UV checker turned purple when the window was opened; to ultraviolet rays. when shielded by UV Verre Premium™, the color fades away. Global Business Operating in Russia, the World’s Largest Glass Manufacturing Facility At the AGC Group’ s Klin Plant, located approximately 80 km decorative glass, enabling the production of high value-added northwest of Russia’ s capital, Moscow, the Group operates the products. Particular to the plant are technological innovations largest glass manufacturing facility in the world. This facility incorporated throughout the plant to efficiently turn out high was created to handle the future growth anticipated in the quality products, as is the ability to reduce energy consump- Russian construction market, and is capable of producing tion during production. The AGC Group will continue to 1,000 tons of glass per day, in thicknesses ranging from 4 to 12 advance into regions in which market expansion is anticipated mm. The plant also holds processing facilities for high- and actively expand its production capacity. performance heat-insulating coated glass, laminated glass and Klin Plant Russia Moscow Klin Plant, located approximately 80 km northwest of Moscow One of the largest glass manufacturing facilities in the world, in the Klin Plant 27 AGC Report 2012 AGC Report 2012 28 The AGC Group’s Electronics Operations offer high value-added products in the display sector and the electronics materials and parts sector, which support the evolution of displays and electronics devices. In the display sector, the Group’s TFT-LCD glass and plasma display (PDP) glass boast a leading share of the world market. By leveraging its unique production methods and high-level production technologies, the Group is pursuing R&D of next-generation image display devices while also enhancing its international competitiveness. Its presence is increasingly acknowledged in the world of image displays, which serve as a key interface tying people and information networks together. In the electronic materials and parts sector, the Group’s product line-ups include semiconductor process mate-rials and parts, such as synthetic quartz glass and high-purity silicon carbide; display materials and parts used in PDP optical ﬁlters; optical components such as visibility compensation ﬁlters for CCD optical ﬁlters; and glass substrates for hard disks; each of which is making a contribution to the evolution of electronics devices. In ﬁscal 2011, the Group’s sales for the display sector and the electronics materials and parts sector were 331 billion yen and 55.6 billion yen respectively, resulting in net sales of 386.5 billion yen and operating income of 133.5 billion yen for the Electronics Operations.Electronics materials and parts14%Displays86%Sales TrendsSector-Based Sales Share3001000200400500(Billion yen)2009369.32010435.32011386.5Electronicssales386.5billion yen(FY)Market share rankings of major products (AGC estimates)Glass substrates for TFT-LCDsGlass substrates for PDPsNo. 2 worldwideNo. 1 worldwide“Dragontrail™” specialty glass for chemical strengtheningGlass substrates for TFTsSynthetic quartz glassVisibility compensation filtersElectronics OperationsDescription of BusinessThe Electronics Company’s glass for display panels brings innovation to graphic displaysUsing its unique manufacturing methods and high-level production technology, the AGC Group provides creative glass products to support the evolution of displays and electronic instruments.BusinessOverviewChapter 1ChemicalsOperationsElectronicsOperationsGlassOperationsCeramics/OthersAGC Report 2012 29AGC Report 2012 30The AGC Group’s Electronics Operations offer high value-added products in the display sector and the electronics materials and parts sector, which support the evolution of displays and electronics devices. In the display sector, the Group’s TFT-LCD glass and plasma display (PDP) glass boast a leading share of the world market. By leveraging its unique production methods and high-level production technologies, the Group is pursuing R&D of next-generation image display devices while also enhancing its international competitiveness. Its presence is increasingly acknowledged in the world of image displays, which serve as a key interface tying people and information networks together. In the electronic materials and parts sector, the Group’s product line-ups include semiconductor process mate-rials and parts, such as synthetic quartz glass and high-purity silicon carbide; display materials and parts used in PDP optical ﬁlters; optical components such as visibility compensation ﬁlters for CCD optical ﬁlters; and glass substrates for hard disks; each of which is making a contribution to the evolution of electronics devices. In ﬁscal 2011, the Group’s sales for the display sector and the electronics materials and parts sector were 331 billion yen and 55.6 billion yen respectively, resulting in net sales of 386.5 billion yen and operating income of 133.5 billion yen for the Electronics Operations.Electronics materials and parts14%Displays86%Sales TrendsSector-Based Sales Share3001000200400500(Billion yen)2009369.32010435.32011386.5Electronicssales386.5billion yen(FY)Market share rankings of major products (AGC estimates)Glass substrates for TFT-LCDsGlass substrates for PDPsNo. 2 worldwideNo. 1 worldwide“Dragontrail™” specialty glass for chemical strengtheningGlass substrates for TFTsSynthetic quartz glassVisibility compensation filtersElectronics OperationsDescription of BusinessThe Electronics Company’s glass for display panels brings innovation to graphic displaysUsing its unique manufacturing methods and high-level production technology, the AGC Group provides creative glass products to support the evolution of displays and electronic instruments.BusinessOverviewChapter 1ChemicalsOperationsElectronicsOperationsGlassOperationsCeramics/OthersAGC Report 2012 29AGC Report 2012 30Chapter 1 Business Overview Electronics Operations Activity Highlights Glass Operations Electronics Operations Chemicals Operations Ceramics/ Others Technology Global Business 0.1 mm Ultra-Thin Glass, the World’s Thinnest Glass Manufactured by the Float Method Since early on, the AGC Group has been actively working to make glass ultra-thin. In May 2011, using its years of high-level process management expertise, the Group succeeded in developing ultra-thin sheet glass. At 0.1 mm thick, the glass is the thinnest in the world to be produced by the float method. This ultra-thin glass can be rolled up like film. Not only will it facilitate thinner LCD displays on cellular phones and other equipment, it can also be fitted on curved surfaces and used in flexible next-generation displays which users can roll into tubes and carry with them. In addition, glass material is superior to the existing resin and other films in terms of heat and chemical resis- tance, electric insulation, and gas barrier qualities. It is anticipated that new uses will be developed in various areas, including the electronics and energy sectors, to exploit these characteristics. A roll of ultra-thin glass Ultra-thin glass AGC Display Glass (Kunshan), new plant Environment Glass-Ceramics Substrate “GCHP™” Contributes to Evolution of LED Lighting Strengthening Production in China for TFT-LCD Glass Substrates Driven by increasing demand for LCD TVs and personal com- Jiangsu Province which commenced operation in autumn of puters, especially in fast-growing markets, growth in the global 2011. Equipped with a processing line that can handle up to flat panel display market is expected to continue. Particularly in eighth-generation TFT-LCD glass substrates (approximately China, demand for TFT-LCD panels has been surging in recent 2,200 mm x approximately 2,400 mm), the new processing years, and leading panel manufacturers are planning to build plant is located in Shenzhen City, Guangdong Province, and n e w p r o d u c t i o n p l a n t s f o r l a r g e - s i z e d L C D p a n e l s . mass production is scheduled to start in 2012. Consequently, demand for large-sized glass substrates, which are a necessary part of panel production, is anticipated to increase as well. In order to reliably respond to this expansion of demand in the Chinese market, the AGC Group has built a second process- ing plant in the country, following its first TFT-LCD glass substrate manufactur- ing plant in Kunshan City, China AGC Display Glass (Kunshan) AGC Display Glass (Shenzhen) The spread of energy-saving LED lighting began with low power products such as backlights for cellular phones, PCs and LCD TVs. Lately, however, the range of applications has begun expanding to include high power products, including general indoor and outdoor lighting, interior and exterior lighting for automobiles, street lamps, and tunnel lighting. These LED lights get their increased intensity and improved endurance from the glass-ceramics sub- strate GCHP™. When LEDs are used in high power appli- cations, the amount of heat t h e y g e n e r a t e i n c r e a s e s . GCHP™ enhances the durabil- ity of LEDs and enables them t o b e u s e d i n h i g h p o w e r applications as the glass- ceramics substrate is more reliable than the existing resin GCHP™—a glass- ceramics substrate for high-power LED lighting or alumina substrates with regard to heat dissipation and discoloration. In addition, its reflectivity is from 20 to 30% higher than that of alumina substrates, so intensity may be increased effectively. Since its release, GCHP™ has been held in high regard by LED and automobile manufacturers both in Japan and abroad, and is being adopted in products including general lighting and automobiles, for various uses. The Superiority of GCHP™ Glass-Ceramics Substrates as Seen in an LED Package Cross Section Alumina substrate Glass-ceramics substrate “GCHP™” Light LED Heat Light transmission Light LED Heatsink Heat High reflection 31 AGC Report 2012 AGC Report 2012 32 Glass Operations Electronics Operations Chemicals Operations Ceramics/ Others 0.1 mm Ultra-Thin Glass, the World’s Thinnest Glass Manufactured by the Float Strengthening Production in China for TFT-LCD Glass Substrates Global Business Driven by increasing demand for LCD TVs and personal com- puters, especially in fast-growing markets, growth in the global flat panel display market is expected to continue. Particularly in China, demand for TFT-LCD panels has been surging in recent years, and leading panel manufacturers are planning to build n e w p r o d u c t i o n p l a n t s f o r l a r g e - s i z e d L C D p a n e l s . Consequently, demand for large-sized glass substrates, which are a necessary part of panel production, is anticipated to increase as well. In order to reliably respond to this expansion of demand in the Chinese market, the AGC Group has built a second process- ing plant in the country, following its first TFT-LCD glass substrate manufactur- ing plant in Kunshan City, AGC Display Glass (Kunshan), new plant Jiangsu Province which commenced operation in autumn of 2011. Equipped with a processing line that can handle up to eighth-generation TFT-LCD glass substrates (approximately 2,200 mm x approximately 2,400 mm), the new processing plant is located in Shenzhen City, Guangdong Province, and mass production is scheduled to start in 2012. China AGC Display Glass (Kunshan) AGC Display Glass (Shenzhen) Chapter 1 Business Overview Electronics Operations Activity Highlights Technology Method Since early on, the AGC Group has been actively working to equipment, it can also be fitted on curved surfaces and used in make glass ultra-thin. In May 2011, using its years of high-level flexible next-generation displays which users can roll into tubes process management expertise, the Group succeeded in and carry with them. In addition, glass material is superior to the developing ultra-thin sheet glass. At 0.1 mm thick, the glass is existing resin and other films in terms of heat and chemical resis- the thinnest in the world to be produced by the float method. tance, electric insulation, and gas barrier qualities. It is anticipated This ultra-thin glass can be rolled up like film. Not only will it that new uses will be developed in various areas, including the facilitate thinner LCD displays on cellular phones and other electronics and energy sectors, to exploit these characteristics. A roll of ultra-thin glass Ultra-thin glass Environment Glass-Ceramics Substrate “GCHP™” Contributes to Evolution of LED Lighting The spread of energy-saving LED lighting began with low or alumina substrates with regard to heat dissipation and power products such as backlights for cellular phones, PCs and discoloration. In addition, its reflectivity is from 20 to 30% LCD TVs. Lately, however, the range of applications has begun higher than that of alumina substrates, so intensity may be expanding to include high power products, including general increased effectively. Since its release, GCHP™ has been held indoor and outdoor lighting, interior and exterior lighting for in high regard by LED and automobile manufacturers both in automobiles, street lamps, and tunnel lighting. These LED Japan and abroad, and is being adopted in products including lights get their increased intensity and improved endurance general lighting and automobiles, for various uses. from the glass-ceramics sub- strate GCHP™. When LEDs are used in high power appli- cations, the amount of heat t h e y g e n e r a t e i n c r e a s e s . GCHP™ enhances the durabil- ity of LEDs and enables them t o b e u s e d i n h i g h p o w e r applications as the glass- ceramics substrate is more reliable than the existing resin LED lighting GCHP™—a glass- ceramics substrate for high-power The Superiority of GCHP™ Glass-Ceramics Substrates as Seen in an LED Package Cross Section Alumina substrate Glass-ceramics substrate “GCHP™” Light LED Heat Light transmission Light LED Heatsink Heat High reflection 31 AGC Report 2012 AGC Report 2012 32 Fluorochemicals and specialty chemicals38%Chlor-alkali and urethane62%Sales TrendsSector-Based Sales Share1000200300(Billion yen)2009233.72010260.12011248.6Chemicals Operations sales 248.6billion yen(FY)Fluon® fluoropolymer films used at the UNIQLO Shinsaibashi store Under the vision “Chemistry for a Blue Planet,” The AGC Group’s Chemicals Operations brings safety, reassurance and comfort to customers’ homes; and contributes to environmental conservation.“Asahi Guard™” fluorinated water and oil repellents“Lumiflon™” highly weather-resistant fluoropolymer resin for coatingFluoropolymer “Fluon® ETFE” used in tubes and hosesThe Chemicals Company’s Fluon® ETFE Film product was used in the Allianz Arena, a German soccer stadiumChemicals OperationsCreate a safe, secure, comfortable and environmentally friendly world with chemical technology.Chemicals Operations are expanding based on the sectors of chlor-alkali and urethane, and ﬂuorochemicals and specialty chemicals.In the chlor-alkali and urethane sector, the Group offers basic chemical prod-ucts, such as caustic soda and sodium bicarbonate, which are extremely versatile in daily use and in an array of industries. Urethane-based products are indispensable for comfortable living, for example, heat-insulating materi-als for walls, and automobile seats. In the ﬂuorochemicals and specialty chemicals sector, the Group boasts the world’s leading technology and offers products that show exceptionally high-performance in heat resistance, chemi-cal resistance, and weather-resistance, among which ﬂuoropolymer ETFE maintains a leading share of the world market. Other products include ﬂuo-ropolymers and ﬂuoroelastomers that have drawn the attention of the auto-motive and aerospace industries; ﬂuoropolymer ﬁlms for architectural applica-tions; and ﬂuoropolymers for coatings with excellent weather-resistant prop-erties used in bridges and towers. Further, Chemicals Operations offer new multifunctional materials for the electronics and display sectors as well. In ﬁscal 2011, the Group’s sales for the chlor-alkali and urethane sector were 160.4 billion yen and sales for the ﬂuorochemicals and specialty chemicals were 97.3 billion yen, resulting in net sales of 248.6 billion yen1 and operating income of 18.1 billion yen for the Chemicals Operations.1 Sales to external customers; different from sales total from each sector.Market share ranking of major products (AGC estimates)Fluoropolymers (ETFE)No. 1 worldwideDescription of BusinessBusinessOverviewChapter 1ChemicalsOperationsElectronicsOperationsGlassOperationsCeramics/OthersAGC Report 2012 33AGC Report 2012 34Fluorochemicals and specialty chemicals38%Chlor-alkali and urethane62%Sales TrendsSector-Based Sales Share1000200300(Billion yen)2009233.72010260.12011248.6Chemicals Operations sales 248.6billion yen(FY)Fluon® fluoropolymer films used at the UNIQLO Shinsaibashi store Under the vision “Chemistry for a Blue Planet,” The AGC Group’s Chemicals Operations brings safety, reassurance and comfort to customers’ homes; and contributes to environmental conservation.“Asahi Guard™” fluorinated water and oil repellents“Lumiflon™” highly weather-resistant fluoropolymer resin for coatingFluoropolymer “Fluon® ETFE” used in tubes and hosesThe Chemicals Company’s Fluon® ETFE Film product was used in the Allianz Arena, a German soccer stadiumChemicals OperationsCreate a safe, secure, comfortable and environmentally friendly world with chemical technology.Chemicals Operations are expanding based on the sectors of chlor-alkali and urethane, and ﬂuorochemicals and specialty chemicals.In the chlor-alkali and urethane sector, the Group offers basic chemical prod-ucts, such as caustic soda and sodium bicarbonate, which are extremely versatile in daily use and in an array of industries. Urethane-based products are indispensable for comfortable living, for example, heat-insulating materi-als for walls, and automobile seats. In the ﬂuorochemicals and specialty chemicals sector, the Group boasts the world’s leading technology and offers products that show exceptionally high-performance in heat resistance, chemi-cal resistance, and weather-resistance, among which ﬂuoropolymer ETFE maintains a leading share of the world market. Other products include ﬂuo-ropolymers and ﬂuoroelastomers that have drawn the attention of the auto-motive and aerospace industries; ﬂuoropolymer ﬁlms for architectural applica-tions; and ﬂuoropolymers for coatings with excellent weather-resistant prop-erties used in bridges and towers. Further, Chemicals Operations offer new multifunctional materials for the electronics and display sectors as well. In ﬁscal 2011, the Group’s sales for the chlor-alkali and urethane sector were 160.4 billion yen and sales for the ﬂuorochemicals and specialty chemicals were 97.3 billion yen, resulting in net sales of 248.6 billion yen1 and operating income of 18.1 billion yen for the Chemicals Operations.1 Sales to external customers; different from sales total from each sector.Market share ranking of major products (AGC estimates)Fluoropolymers (ETFE)No. 1 worldwideDescription of BusinessBusinessOverviewChapter 1ChemicalsOperationsElectronicsOperationsGlassOperationsCeramics/OthersAGC Report 2012 33AGC Report 2012 34Chapter 1 Business Overview Chemicals Operations Activity Highlights Technology Global Business Strengthening of Pharmaceutical and Agrochemical Intermediates and Active Ingredients Operations through Fluorochemical Technology Taking advantage of its long-established fluorochemicals technol- ogy, the AGC Group is dedicating its resources to the supply of differentiated products in the pharmaceutical and agrochemical intermediates and active ingredients sector. Tapros ophthalmic solution 0.0015%, released domestically in Japan in December 2008, is a glaucoma medicine that uses the active pharmaceutical ingredient “Tafluprost,” which was created through a joint effort between the AGC Group and Santen Pharmaceutical. A fusion of the Group’s proprietary fluorochemical and organic synthesis tech- nologies, this pharmaceutical product shows outstanding charac- teristics, such as in its effectiveness in lowering intra-ocular pres- sure, the primary treatment for glaucoma. New medicines using Tafluprost are contributing to the treatment of glaucoma world- wide. Starting with Japan, these are now being sold in 37 countries throughout Europe, Asia and the United States. With the intent of doubling its production capacity for pharmaceu- tical and agrochemical intermediates and active ingredients, the AGC Group is building two new plants at AGC Wakasa Chemicals. The plant in Wakasa Town, Fukui Prefec- ture, will be used to produce agrochemi- cal intermediates and active ingredients such as insecticide and fungicide, and is scheduled to begin operation around November 2012. The active ingredients for glaucoma treatment will be manu- factured at the plant in Obama City, Fukui Prefecture; production is planned to begin in 2013. Tafluprost, Pharmaceutical active ingredient Environment Fluorine Ion-Exchange Membrane “Flemion™” to be Used in the Bilateral Offset Credit System The “Bilateral Offset Credit System” proposed by the Japanese government has the advantage of allowing developed and develop- ing countries to promptly implement greenhouse gas (GHG) emis- sions reduction initiatives through bilateral agreements, without going through the United Nations approval process, as was neces- sary with the conventional emissions trading system. In preparation for the realization of this new system, the Ministry of Economy, Trade and Industry is examining projects involving the popularization of climate change mitigation technology, and the AGC Group’s low- energy electrolysis1 process has been adopted as one such project. The purpose of this initiative is to examine the verification proce- dures and methods of measuring the amount of GHG emissions reduction using the result of energy usage reduction at two chemi- cals plants in Mexico, where the AGC Group’s fluorine ion-exchange membrane “Flemion™” has been introduced to drastically reduce energy consumption for the electrolysis process, which is a process used to manufacture caustic soda and other chemicals. Generally the ion-exchange membrane facilitates an energy reduction of approxi- mately 40% as compared to the conventional mercury method, and these efforts are anticipated to result in an annual CO2 emissions reduction of between 60-80,000 tons. 1 Electrolysis of brine that produces caustic soda and chlorine Low-carbon technology (low-energy electrolysis process), products, services, infrastructure, etc. Used to achieve Japan’s goals Japan Mexico Plant GHG emissions in Mexico reduced Electrolysis Process Mechanism (Ion-Exchange Membrane Method) [Chlorine Cl2] [Hydrogen H2] (+) Salt water Na+ e d o n A _ CI (–) Caustic Soda _ OH e d o h t a C “Flemion™”, fluoropolymer ion-exchange membrane Amount of GHG emissions reduction 35 AGC Report 2012 Glass Operations Electronics Operations Chemicals Operations Ceramics/ Others PT Asahimas Chemical (Cilegon, Banten Province, Indonesia) Indonesia 30% Expansion of Electrolysis1 Capacity in Indonesia Caustic soda is an alkali product that is widely used as a basic caustic soda. The AGC Group will utilize this chlorine in the industrial chemical, as well as in rayon, soaps and detergents, production of ethylene dichloride (EDC) and other products in seasonings, paper and pulp. In the Asian region, demand for an effort to help respond to expanding demand for chlorine caustic soda has been expanding year by year against the derivatives in the Asian regions with a focus on Indonesia. background of a favorable economy, and such a trend is 1 Brine electrolysis to produce chlorine and caustic soda expected to continue along with the economic growth of the region. In order to respond to growing demand for caustic soda and chlorine derivatives in the Asian market, the AGC Group is investing approximately 5 billion yen into its Indonesian local subsidiary, PT Asahimas Chemical to increase the electrolysis production capacity of the plant by 30%. This will give AGC Group’ s PT Asahimas Chemical a caustic soda production capacity of approximately 500,000 tons annually. The expansion of the electrolysis facility will also result in increased production of chlorine, which is produced along with PT Asahimas Chemical Responsibilities to Society Earthquake Prompt Resumption of Lifeline Product Supply Following Great East Japan On March 11, 2011, the Great East Japan Earthquake struck Japan and supply restrictions on electricity, crude petroleum and gaso- and halted the operation of the Chiba and Kashima plants of Asahi line. However, the Group worked with the related ministries and Glass. The facilities are crucial domestic production bases for the agencies and pressed forward with recovery activities, and as a Group’ s chemicals operations, such as manufacturing products result, was able to resume supply of these lifeline products early. In vital to civic lifelines, such as sodium hypochlorite, used to purify addition to fulfilling its responsibility municipal water, and medical sodium bicarbonate. In this state of to supply necessary products as a emergency, the AGC Group moved in accordance with its estab- manufacturer, the Group was able to lished Business Continuity Plan (BCP), and employees at head- be of assistance in preserving lives quarters, plants and branch offices stood together and worked and preventing civic disorder follow- towards recovery. There were many challenging issues following ing the disaster. the disaster, including restricted entry to certain areas of the plants AGC Report 2012 36 Chapter 1 Business Overview Chemicals Operations Activity Highlights Glass Operations Electronics Operations Chemicals Operations Ceramics/ Others PT Asahimas Chemical (Cilegon, Banten Province, Indonesia) Indonesia Technology Global Business Strengthening of Pharmaceutical and Agrochemical Intermediates and Active 30% Expansion of Electrolysis1 Capacity in Indonesia Ingredients Operations through Fluorochemical Technology Taking advantage of its long-established fluorochemicals technol- throughout Europe, Asia and the United States. ogy, the AGC Group is dedicating its resources to the supply of With the intent of doubling its production capacity for pharmaceu- differentiated products in the pharmaceutical and agrochemical tical and agrochemical intermediates and active ingredients, the intermediates and active ingredients sector. Tapros ophthalmic AGC Group is building two new plants at AGC Wakasa Chemicals. solution 0.0015%, released domestically in Japan in December The plant in Wakasa Town, Fukui Prefec- 2008, is a glaucoma medicine that uses the active pharmaceutical ture, will be used to produce agrochemi- ingredient “Tafluprost,” which was created through a joint effort cal intermediates and active ingredients between the AGC Group and Santen Pharmaceutical. A fusion of such as insecticide and fungicide, and is the Group’s proprietary fluorochemical and organic synthesis tech- scheduled to begin operation around nologies, this pharmaceutical product shows outstanding charac- November 2012. The active ingredients teristics, such as in its effectiveness in lowering intra-ocular pres- for glaucoma treatment will be manu- sure, the primary treatment for glaucoma. New medicines using factured at the plant in Obama City, Tafluprost are contributing to the treatment of glaucoma world- Fukui Prefecture; production is planned wide. Starting with Japan, these are now being sold in 37 countries to begin in 2013. Tafluprost, Pharmaceutical active ingredient Environment Offset Credit System Fluorine Ion-Exchange Membrane “Flemion™” to be Used in the Bilateral The “Bilateral Offset Credit System” proposed by the Japanese dures and methods of measuring the amount of GHG emissions government has the advantage of allowing developed and develop- reduction using the result of energy usage reduction at two chemi- ing countries to promptly implement greenhouse gas (GHG) emis- cals plants in Mexico, where the AGC Group’s fluorine ion-exchange sions reduction initiatives through bilateral agreements, without membrane “Flemion™” has been introduced to drastically reduce going through the United Nations approval process, as was neces- energy consumption for the electrolysis process, which is a process sary with the conventional emissions trading system. In preparation used to manufacture caustic soda and other chemicals. Generally the for the realization of this new system, the Ministry of Economy, Trade ion-exchange membrane facilitates an energy reduction of approxi- and Industry is examining projects involving the popularization of mately 40% as compared to the conventional mercury method, and climate change mitigation technology, and the AGC Group’s low- these efforts are anticipated to result in an annual CO2 emissions energy electrolysis1 process has been adopted as one such project. reduction of between 60-80,000 tons. The purpose of this initiative is to examine the verification proce- 1 Electrolysis of brine that produces caustic soda and chlorine Low-carbon technology (low-energy electrolysis process), products, services, infrastructure, etc. Used to achieve Japan’s goals Japan Mexico Plant GHG emissions in Mexico reduced Electrolysis Process Mechanism (Ion-Exchange Membrane Method) [Chlorine Cl2] [Hydrogen H2] (+) Salt water Na+ e d o n A _ CI (–) Caustic Soda _ OH e d o h t a C “Flemion™”, fluoropolymer ion-exchange membrane Amount of GHG emissions reduction 35 AGC Report 2012 Caustic soda is an alkali product that is widely used as a basic industrial chemical, as well as in rayon, soaps and detergents, seasonings, paper and pulp. In the Asian region, demand for caustic soda has been expanding year by year against the background of a favorable economy, and such a trend is expected to continue along with the economic growth of the region. In order to respond to growing demand for caustic soda and chlorine derivatives in the Asian market, the AGC Group is investing approximately 5 billion yen into its Indonesian local subsidiary, PT Asahimas Chemical to increase the electrolysis production capacity of the plant by 30%. This will give AGC Group’ s PT Asahimas Chemical a caustic soda production capacity of approximately 500,000 tons annually. The expansion of the electrolysis facility will also result in increased production of chlorine, which is produced along with Responsibilities to Society caustic soda. The AGC Group will utilize this chlorine in the production of ethylene dichloride (EDC) and other products in an effort to help respond to expanding demand for chlorine derivatives in the Asian regions with a focus on Indonesia. 1 Brine electrolysis to produce chlorine and caustic soda PT Asahimas Chemical Prompt Resumption of Lifeline Product Supply Following Great East Japan Earthquake On March 11, 2011, the Great East Japan Earthquake struck Japan and halted the operation of the Chiba and Kashima plants of Asahi Glass. The facilities are crucial domestic production bases for the Group’ s chemicals operations, such as manufacturing products vital to civic lifelines, such as sodium hypochlorite, used to purify municipal water, and medical sodium bicarbonate. In this state of emergency, the AGC Group moved in accordance with its estab- lished Business Continuity Plan (BCP), and employees at head- quarters, plants and branch offices stood together and worked towards recovery. There were many challenging issues following the disaster, including restricted entry to certain areas of the plants and supply restrictions on electricity, crude petroleum and gaso- line. However, the Group worked with the related ministries and agencies and pressed forward with recovery activities, and as a result, was able to resume supply of these lifeline products early. In addition to fulfilling its responsibility to supply necessary products as a manufacturer, the Group was able to be of assistance in preserving lives and preventing civic disorder follow- ing the disaster. AGC Report 2012 36 Chapter 1 Business Overview The AGC Group and Clean Energy Ceramics/Other Operations In addition to its Ceramics Operations, which support high-quality glass manufacturing, the Group is engaged in logistics, engineering and other operations. The AGC Group continues to contribute to efﬁcient energy use and the creation of clean energy, by integrating advanced technologies in glass, electronics, chemicals and ceramics. In order to realize an energy recycling society and create clean energy, the AGC Group has made strides in developing a range of technologies in each of its businesses, and providing products that create new value. Such contributions include photovoltaic products like photovoltaic cover glass and glass substrates, and a variety of clean energy products such as CSP mirrors, cathode materials for lithium-ion batteries and seal materials. Glass Operations Fused cast refractory brick for glass furnace crown from AGC Ceramics Photovoltaic cover glass Building integrated photovoltaics Solite™ Plus Sunjoule™ CSP Mirrors This photovoltaic cover glass is designed These Photovoltaic modules absorb AGC’s CSP mirrors collect sunlight more to utilize more light. AGC’s unique coat- sunlight on both surfaces for power efficiently. A thin, curved, concave type ing effectively lowers surface reflection generation. The modules can be installed is also available. and raises light transmittance. vertically on roads and roof fencing. Electronics Operations Chemicals Operations Ceramics Operations Description of Business The refractories used in glass melting furnaces play an important role in the stable production of high-quality glass. The AGC Group’ s ceramics business has its roots in the 1916 production of refractory bricks for glass furnaces. Through the years, the Group has cultivated expertise in fused cast refractories, bonded refractories, monolithic refractories and ﬁne ceramics, and offers engineering services and high-quality products based on these four material technologies. AGC Ceramics is dedicated to creating innovation under the banner of two visions: Glass Ceramics Innovation and Green Ceramics Innovation. In the glass engineering business, the company offers highly-durable, highly functional fused cast bricks that extend the life of glass furnaces and save energy and reduce CO2 during the glass production process, and proposes a wide range of solutions based on these high-performance products. In the environmen- tal energy business, the company strives to create products and technologies that contribute to environmental conservation, including ultra-insulating monolithic refractories and bonded refractories that contribute to saving energy and reducing the environmental impact of factory furnaces, and ﬁne ceramics products such as high-temperature fans and sputtering targets used for TCO substrates for PV modules. In addition to the ceramics operations, the AGC Group is also engaged in logis- tics, engineering, and other operations. The ﬁscal 2011 sales for those services amounted to 83.9 billion yen, with operating income of 4 billion yen. Fused cast bonded refractory bricks for glass melting furnaces THERMOTECT™ ultra-insulating monolithic refractory brick Photovoltaic electrode binder Glass frit and paste Electrode materials for lithium ion batteries Sputtering target for transparent conductive thin films Glass materials used for insulation, airtight Cathode Materials for lithium ion batter- This material is used to create transparent sealing, and protection, which can be used ies that are used in mobile phones and conductive films, which are indispensable in silver or aluminum electrode binders to personal notebook computers. Lithium for surface electrodes of PV cells. The help improve conductivity. ion batteries are highly durable for AGC Group offers high-quality materials repeated re-charging. based on its fine ceramics techniques. Ceramic sputtering targets Cement rotary kiln Exhibiting Sunjoule™ Power-Generation Glass at the 42nd Tokyo Motor Show 2011 Sales Trends (Billion yen) 100 80 60 40 20 0 77.3 83.9 68.9 2009 2010 2011 (FY) The AGC Group hosted an exhibit called “SMART MOBILITY CITY 2011” at the 42nd Tokyo Motor Show 2011, held at Tokyo Big Sight from December 3–11, 2011. In an easy-to-understand exhibit with video and onsite demon- strations, the AGC Group introduced how glass can lead to “smart” lifestyles that are people-friendly and socially harmonious. The exhibit highlighted the Sunjoule™ power-generation glass and other functional glass products which contribute to the creation of clean energy. The AGC booth also showcased a futuristic car whose body color changes over time and with the seasons and Dragontrail™, a specialty glass for chemical strengthening which garnered a lot of attention in a hands-on exhibit. 37 AGC Report 2012 AGC Report 2012 38 Chapter 1 Business Overview The AGC Group and Clean Energy Ceramics/Other Operations In addition to its Ceramics Operations, which support high-quality glass manufacturing, the Group is engaged in logistics, engineering and other operations. The AGC Group continues to contribute to efﬁcient energy use and the creation of clean energy, by integrating advanced technologies in glass, electronics, chemicals and ceramics. In order to realize an energy recycling society and create clean energy, the AGC Group has made strides in developing a range of technologies in each of its businesses, and providing products that create new value. Such contributions include photovoltaic products like photovoltaic cover glass and glass substrates, and a variety of clean energy products such as CSP mirrors, cathode materials for lithium-ion batteries and seal materials. Glass Operations Fused cast refractory brick for glass furnace crown from AGC Ceramics Photovoltaic cover glass Solite™ Plus This photovoltaic cover glass is designed to utilize more light. AGC’s unique coat- ing effectively lowers surface reflection and raises light transmittance. Building integrated photovoltaics Sunjoule™ These Photovoltaic modules absorb sunlight on both surfaces for power generation. The modules can be installed vertically on roads and roof fencing. CSP Mirrors AGC’s CSP mirrors collect sunlight more efficiently. A thin, curved, concave type is also available. Electronics Operations Chemicals Operations Ceramics Operations Fused cast bonded refractory THERMOTECT™ ultra-insulating bricks for glass melting furnaces monolithic refractory brick Photovoltaic electrode binder Glass frit and paste Glass materials used for insulation, airtight sealing, and protection, which can be used in silver or aluminum electrode binders to help improve conductivity. Electrode materials for lithium ion batteries Cathode Materials for lithium ion batter- ies that are used in mobile phones and personal notebook computers. Lithium ion batteries are highly durable for repeated re-charging. Sputtering target for transparent conductive thin films This material is used to create transparent conductive films, which are indispensable for surface electrodes of PV cells. The AGC Group offers high-quality materials based on its fine ceramics techniques. furnaces and save energy and reduce CO2 during the glass Ceramic sputtering targets Cement rotary kiln production process, and proposes a wide range of solutions based on these high-performance products. In the environmen- Sales Trends (Billion yen) 100 80 60 40 20 0 77.3 83.9 68.9 2009 2010 2011 (FY) Exhibiting Sunjoule™ Power-Generation Glass at the 42nd Tokyo Motor Show 2011 The AGC Group hosted an exhibit called “SMART MOBILITY CITY 2011” at the 42nd Tokyo Motor Show 2011, held at Tokyo Big Sight from December 3–11, 2011. In an easy-to-understand exhibit with video and onsite demon- strations, the AGC Group introduced how glass can lead to “smart” lifestyles that are people-friendly and socially harmonious. The exhibit highlighted the Sunjoule™ power-generation glass and other functional glass products which contribute to the creation of clean energy. The AGC booth also showcased a futuristic car whose body color changes over time and with the seasons and Dragontrail™, a specialty glass for chemical strengthening which garnered a lot of attention in a hands-on exhibit. 37 AGC Report 2012 AGC Report 2012 38 Description of Business The refractories used in glass melting furnaces play an important role in the stable production of high-quality glass. The AGC Group’ s ceramics business has its roots in the 1916 production of refractory bricks for glass furnaces. Through the years, the Group has cultivated expertise in fused cast refractories, bonded refractories, monolithic refractories and ﬁne ceramics, and offers engineering services and high-quality products based on these four material technologies. AGC Ceramics is dedicated to creating innovation under the banner of two visions: Glass Ceramics Innovation and Green Ceramics Innovation. In the glass engineering business, the company offers highly-durable, highly functional fused cast bricks that extend the life of glass tal energy business, the company strives to create products and technologies that contribute to environmental conservation, including ultra-insulating monolithic refractories and bonded refractories that contribute to saving energy and reducing the environmental impact of factory furnaces, and ﬁne ceramics products such as high-temperature fans and sputtering targets used for TCO substrates for PV modules. In addition to the ceramics operations, the AGC Group is also engaged in logis- tics, engineering, and other operations. The ﬁscal 2011 sales for those services amounted to 83.9 billion yen, with operating income of 4 billion yen. Material issues for the AGC GroupMaterial issues for stakeholdersIssues for whicha framework isto be developedand a commitmentmade to societyIssues for whichadditionalmeasures aredeemed unnecessaryIssues for whicha framework isto be developedIssues for whichinformation is tocontinue tobe collectedRelated data can be found in the CSR Information Supplement (PDF)www.agc.com/english/csr/book/Related information can be found on the CSR homepageAbout the icons on each page:The AGC Group established the CSR Committee in 2005 as an in-house organization dedicated to promoting CSR. On the CSR Committee, the AGC Group CEO presides as the committee chair, while the board of directors, corporate auditors and the head of each organization deliberate over general policies and issues related to the Group’s CSR activities on a quarterly basis. Moreover, the CSR Promotions Team, which consists of CSR executives from each of the In-house Companies, as well as the human resources, purchases and audit departments, discuss and share responsibility for each policy and issue prior to the CSR Committee meeting.In order to fulﬁll its corporate mission to “Look beyond to make the world a brighter place” as outlined in the Group Vision , the AGC Group endeavors to both foster trust and meet the expectations of the commu-nity and contribute to the creation of a sustainable society by adopting behaviors based on our shared values (see page 4). Further, the Group utilizes the ISO 26000, an international standard on social responsibility as a guide-line for its global CSR activities in order to more concretely demonstrate values-based conduct and establish the AGC Group Charter of Corporate Behavior.In ﬁscal 2011, in order to assess the AGC Group’s CSR activi-ties from the perspective of stakeholders and strengthen policies that beneﬁt the community, the Group developed the CSR monitoring framework based on ISO 26000. As part of this development, the Group took the following three steps: (1) creation of a CSR Monitoring Sheet; (2) implemen-tation of communications within the Group; and (3) goal-setting for materiality issues (see ﬁgure below).From this point forward, in addition to continuing to monitor critical items made to reﬂect the changing expec-tations of society, the Group will examine applicability according to business segment and region.Charter of Corporate Behavior (full text)CSR Information Supplement P. 1Responsibilities to Our StakeholdersThe AGC Group’s Vision and CSRCSR Promotion SystemDeveloping the CSR Monitoring Framework Based on ISO 26000CSRRequirements,Expectations/EvaluationHandling andInformationDisclosurebased onRequirements/ExpectationsCreation of the CSR Monitoring SheetCSR Monitoring FrameworkThe CSR Monitoring Sheet is based on the core subjects/issues and related actions and expecta-tions as detailed in ISO 26000. The sheet consists of a table listing some 200 issues relating to actions and expectations required of the AGC Group by its stakeholders; the impact on each stakeholder, the activity status (Group/regional) and the relevant organization are given for each issue.STEP 1Implementation of Communications within the GroupIn addition to holding a seminar on ISO 26000 led by an outside expert, dialogues have been initiated between CSR Ofﬁce staff and CSR representatives in each organization, lasting a period of two months.The Group seeks to deepen understanding of the content of each issue and, after narrowing the items, place each within one of four quadrants in the matrix of CSR issues (diagram right) for each organization.ISO 26000 workshop led by Mr. Eiichiro Adachi from the Japan Research InstituteSTEP 2Matrix of CSR IssuesTarget-Setting for Materiality IssuesTargets and the relevant organizations are assigned for each issue in the matrix of CSR issues and progress toward the targets is monitored on an annual basis by the CSR Committee. The targets and results for issues located in the most critical quadrant of the matrix are reported to stakeholders in the AGC Report.STEP 3AGC GroupStakeholdersEmployeesBusinesspartnersSocietyShareholdersand investorsCustomersCSR Monitoring SheetTargets and resultsfor issues locatedin this quadrantare disclosed publiclyChapter239AGC Report 2012Material issues for the AGC GroupMaterial issues for stakeholdersIssues for whicha framework isto be developedand a commitmentmade to societyIssues for whichadditionalmeasures aredeemed unnecessaryIssues for whicha framework isto be developedIssues for whichinformation is tocontinue tobe collectedRelated data can be found in the CSR Information Supplement (PDF)www.agc.com/english/csr/book/Related information can be found on the CSR WebsiteAbout the icons on each page:The AGC Group established the CSR Committee in 2005 as an in-house organization dedicated to promoting CSR. On the CSR Committee, the AGC Group CEO presides as the committee chair, while the board of directors, corporate auditors and the head of each organization deliberate over general policies and issues related to the Group’s CSR activities on a quarterly basis. Moreover, the CSR Promotions Team, which consists of CSR executives from each of the In-house Companies, as well as the human resources, purchases and audit departments, discuss and share responsibility for each policy and issue prior to the CSR Committee meeting.In order to fulfill its corporate mission to “Look beyond to make the world a brighter place” as outlined in the Group Vision , the AGC Group endeavors to both foster trust and meet the expectations of the commu-nity and contribute to the creation of a sustainable society by adopting behaviors based on our shared values (see page 4). Further, the Group utilizes the ISO 26000, an international standard on social responsibility as a guide-line for its global CSR activities in order to more concretely demonstrate values-based conduct and establish the AGC Group Charter of Corporate Behavior.In fiscal 2011, in order to assess the AGC Group’s CSR activi-ties from the perspective of stakeholders and strengthen policies that benefit the community, the Group developed the CSR monitoring framework based on ISO 26000. As part of this development, the Group took the following three steps: (1) creation of a CSR Monitoring Sheet; (2) implemen-tation of communications within the Group; and (3) goal-setting for materiality issues (see figure below).From this point forward, in addition to continuing to monitor critical items made to reflect the changing expec-tations of society, the Group will examine applicability according to business segment and region.Charter of Corporate Behavior (full text)CSR Information Supplement P. 1Responsibilities to Our StakeholdersThe AGC Group’s Vision and CSRCSR Promotion SystemDeveloping the CSR Monitoring Framework Based on ISO 26000CSRRequirements,Expectations/EvaluationHandling andInformationDisclosurebased onRequirements/ExpectationsCreation of the CSR Monitoring SheetCSR Monitoring FrameworkThe CSR Monitoring Sheet is based on the core subjects/issues and related actions and expecta-tions as detailed in ISO 26000. The sheet consists of a table listing some 200 issues relating to actions and expectations required of the AGC Group by its stakeholders; the impact on each stakeholder, the activity status (Group/regional) and the relevant organization are given for each issue.STEP 1Implementation of Communications within the GroupIn addition to holding a seminar on ISO 26000 led by an outside expert, dialogues have been initiated between CSR Office staff and CSR representatives in each organization, lasting a period of two months.The Group seeks to deepen understanding of the content of each issue and, after narrowing the items, place each within one of four quadrants in the matrix of CSR issues (diagram right) for each organization.ISO 26000 workshop led by Mr. Eiichiro Adachi from the Japan Research InstituteSTEP 2Matrix of CSR IssuesTarget-Setting for Materiality IssuesTargets and the relevant organizations are assigned for each issue in the matrix of CSR issues and progress toward the targets is monitored on an annual basis by the CSR Committee. The targets and results for issues located in the most critical quadrant of the matrix are reported to stakeholders in the AGC Report.STEP 3AGC GroupStakeholdersEmployeesBusinesspartnersSocietyShareholdersand investorsCustomersCSR Monitoring SheetTargets and resultsfor issues locatedin this quadrantare disclosed publiclyChapter240AGC Report 2012ISO 26000 ItemsThe AGC Group Targets and ResultsCore subjectsIssuesRelated actions and expectations (major issues)Refer-enceFiscal 2011 targets Fiscal 2011 resultsSelf-evaluationFiscal 2012 targetsOrganizational GovernanceDecision-making processes and structures•Nurtureanenvironmentinwhichtheprincipleofsocialresponsi-bility(accountability,transparency)ispracticedP. 44Continue to ensure effective communications in and out-side the Group•Continuetogainsociety’strustbyconductingtimelyandappropriatedisclosure•Continuouslyinteractwithstakeholdersthroughdialoguesandprovidingreportsthatreflectsociety’sexpectationsandtheprogressmadebytheGroup•Promptlydisclosedinformationonissuesofparticularinteresttothepublic,includingtheimpactoftheGreatEastJapanEarthquakeandmajorfloodinginThailandontheGroup’soperations•AddressedissuesinrelationtoISO26000andreflectedthedemandsofsocietyinthe2011CSRReport•AsahiGlasswasreinstatedintheDowJonesSustainabilityWorldIndex1andgivenaBronzeClassinthesustainableratingofSustainabilityAssetManagement2AContinue to ensure effective communications in and outside the Group•Continuetogainsociety’strustbyconductingtimelyandappropriatedisclosure•PublishacombinedannualandCSRreportthatmoreclearlypresentstheAGCGroup’sapproachtoprogressivelyintegratingbusinessoperationsandcorporatesocialresponsibility•EnhancecommunicationsbothinandoutsidetheGrouptoestablishastrongerbasisforCSRactivities•Nurtureanenvironmentinwhichtheprincipleofsocialresponsi-bility(ethicalbehavior,respectfortheruleoflaw)ispracticedP. 46Continue to promote compliance•ReviewtheGroupCodeofConductandpreparetherevi-sion•FurtherexpandthescopeofemployeessubmittingPer-sonalCertificationsontheCodeofConduct•CompletedareviewoftheGroupCodeofConduct•ObtainedPersonalCertificationsontheCodeofConductfromabout38,000employ-ees,representing81%ofallGroupemployeesAContinue to promote compliance•RevisetheGroupCodeofConduct•FurtherexpandthescopeofGroupemployeesrequestedtosubmitPersonalCertificationsontheCodeofConduct•ConductongoingcompliancetrainingandonlinetrainingprogramsforallGroupemployees•PeriodicallyreviewandevaluatethegovernanceprocessP. 44Implementing effective audits and promoting the PDCA cycle•Conductauditsofcountermeasuresagainstleakageofcon-fidentialinformationandcompliancewithantitrustlaws,withanemphasisontheGroup’sglobaluniformity•Commenceauditstargetingspecificdownsiderisks3•Conductedinternalauditsat49sitesintheGroup,focusingontheGroup’sglobaluni-formityandcoveringtheestablishmentofaframeworkforcomplyingwithantitrustlawsandprotectingconfidentialinformation•CarriedoutauditstoexaminetheimplementationofEnterpriseRiskManagement4bydivisionsinchargeofhandlingrespectivedownsiderisks3AImplementing effective audits and promoting the PDCA cycle•ContinueconductingauditsoftheframeworkintheGroupforobserv-ingantitrustlawsandmeasuresforprotectingconfidentialinformation•Conductauditstargetingthecompletionandapplicationofabusinesscontinuityplan(BCP)acrossGroupcompaniesinAsiaincludingJapanLabor PracticesConditions of work and social protection•Complywithanyobligationconcerningtheprovisionofprotec-tionforworkersinthecountryofoperationP. 47Create a work environment where employees can work with satisfaction and pride•Giveeachin-houseorganizationfeedbackonthethirdEmployeeSatisfaction(ES)survey•Prepareaself-inspectionlistforhumanrightsandlaborpracticesandconductasurveytocheckcompliancewithintheGroup•ContinueimplementingtheAGCGroupAwardsystem•ProvidedtheresultsofthethirdEmployeeSatisfaction(ES)surveytoemployees,formu-latedandimplementedmeasurestoimproveESateachin-houseorganization,andannouncedthemeasurestotheentireGroupinamessagefromtheCEO•Distributedtheself-inspectionlistforhumanrightsandlaborpracticesinDecember2010,andcheckedthestatusofcomplianceat157Groupcompanies;necessarycorrectivemeasureswerepromptlyimplemented•IncreasedthenumberofAGCGroupCEOAwardsawardeesbyapproximately20%,increasingtheawardeesparticularlyfromGroupcompaniesinAsiaandEuropeanditscontentswithexpandedmeasurestofacilitateglobalcooperationintheawardsystemACreate a work environment where employees can work with satisfac-tion and pride•PromotetheGroup-widedevelopmentofmeasurestoimproveemployeesatisfaction,andcreateopportunitiestoregularlyreviewrelatedactivitiesundertakenateachin-houseorganization•Employasecondvoluntaryself-inspectionofhumanrightsandlaborpracticesintheGroup•Continuetoimplementtheawardsystemwhilemakingimprove-mentsasameanstoawardjointlyimplementedbestpracticesandeffortstocreateaworkenvironmentthatrecognizesandappraisesachievementsHealth and safety at work•Develop,implementandmaintainpolicyonoccupationalhealthandsafety•Understandandapplyprinciplesofhealthandsafetymanage-ment(elimination,substitution,engineeringcontrols,administrativecontrols,workproceduresandpersonalprotectiveequipment)•AnalyzeandcontrolthehealthandsafetyrisksinorganizationalactivitiesPP. 50– 51 Foster the Group’s safety management activities•Improvetheeffectivenessoftheoccupationalhealthandsafetymanagementsystem(OHSMS)•Enhanceeducationonhealthandsafety,includingsafetypromotionactivities•Expanddisasterpreventionactivitiesfocusingonunsafehumanbehaviors•Obtainedthird-partycertificationoftheOHSMSat83plantsasofDecember31,2011•Enhancededucationonhealthandsafetybyimplementingongoingsafetypromotionactivitiesandexpandingsafetypatroltrainingintostratifiededucationalseminars,Haz-ardSimulationTrainingwasexpandedtoGroupcompanies•Producedabookletonpreventingdisasterscausedbyhumanerrortodrawattentiontounsafebehaviorsatwork,andcommencedtrainingateveryorganizationB5Foster the Group’s safety management activities•IncreasetheeffectivenessoftheOHSMS•Continuetoenhanceeducationonhealthandsafety,includingsafetypromotionactivities•Reduceaccidentsduetounsafeactionsaswellasaccidentscausedbyelderlyemployees•RaisethelevelofhealthmanagementReduce risks by improving health and safety audits•FromMarch2011,internalauditsofenvironment,safetyandsecuritywereimplementedwiththeInternalAuditOfficeinanefforttoimproveefficiencyReduce risks by improving health and safety audits•ConductauditsparticularlyatplantswithhighrisksassociatedwithhealthandsafetywhileaimingtodevelopamoreglobalauditingsystemPromote and ensure machinery safety•Fostermeasurestoexpandtheimplementationofthenewmachinerysafetystandard•ExpandtheSafetyAssessorprogramintomoreGroupcom-panies•PriorSafetyAssessmentSystem,safetyinspectionsinadvanceofinstallingproductionfacilities,beingimplementedatmostplantsinJapan•ConductedmachinerysafetytrainingforsupervisorsfromallrelevantorganizationsinJapan,andexpandedthetrainingtoincludeGroupcompaniesinAsiaotherthanJapan•Increasedthenumberofemployeesqualifiedassafetyassessorsby80andqualifiedassafetybasicassessorsby239inAsiaincludingJapanPromote and ensure machinery safety•Improvetheeffectivenessofsafetyinspectionstakeninadvanceofinstallingproductionfacilities•ExpandtheimplementationoftrainingrelatedtomachinerysafetyHuman resource development and training in the workplace•Provideallworkersatallstagesoftheirworkexperiencewithac-cesstoskillsdevelopment,trainingandapprenticeships•Provideallworkersatallstagesoftheirworkexperiencewithac-cesstoopportunitiesforcareeradvancementPP. 48– 49 Develop human resources that can drive the Group for-ward•Continueimplementingmeasuresforthedevelopmentofhumanresourcesforglobalmanagement6•Expandtheemploymentofhumanresourcesforglobalman-agement•Continuedconductingnext-generationleadertraining,andincludedtrainingsessionsinChinaforthefirsttime•Contemplatedtheorganizationandhumanresourcesaspirationsfor2020,andestab-lishedprioritytaskstowardthisendforthemediumterm;employedtheSkillMap(seepage49)inemploymentplansfortechnicalpersonnelADevelop human resources that can drive the Group forward•Improvethecontentofnext-generationleadertraining•Continueemployingglobalmanagementstaff6Enhance employee education and training programs•ExpandthescopeoftheAGCGroupimprovementactivi-ties•BeginningwithJapan,expandedtheAGCGroupimprovementactivitiestocertainareasofAsia,EuropeandNorthAmericaEnhance employee education and training programs•Developnewtrainingprogramsthatmakeuseofonlinetraining•ContinueexpandingthescopeoftheAGCGroupimprovementactivitiesThe EnvironmentPrevention of pollution•Identifytheimpactofitsdecisionsandactivitiesontheenvironment•Measure,recordandreportonitssignificantsourcesofpollutionandreductionofpollution,waterconsumption,wastegenerationandenergyconsumption•Prepareanenvironmentalaccidentpreventionprogramandanemergencyplaninvolvingworkers,authorities,localcommunitiesandotherrelevantstakeholders•ImplementmeasuresaimedatpreventingpollutionandwasteandproperlymanageunavoidablepollutionandwastePP. 52– 56 Further implement the integrated environmental manage-ment system (Integrated EMS) on a global basis•IncreasethenumberofsitesintheGroupincorporatedintheintegratedEMS•Furtherenhanceenvironmental-relatedcommunicationsglobally•NewlyaddedoneGroupcompanytotheintegratedEMS,bringingthetotalnumberofparticipatingplantsupto96intheGroupB8Promoting risk reduction and preventive measuresPromote Zero-landfill (waste) in the Group7•Achievedarecyclingrateof96.9%astheGroupaveragePromote Zero-landfill (waste)7 in the GroupClimate changemitigation andadaptation•IdentifythesourcesofdirectandindirectGHGemissionsanddefinethescopeofitsresponsibility•Measure,recordandreportonitssignificantGHGemissions,preferablyusingmethodsdefinedininternationallyagreedstandards•ImplementmeasurestoreducethedirectandindirectGHGemissionswithinitssphereofinfluence•RealizeenergysavingsbypurchasingofenergyefficientgoodsanddevelopmentofenergyefficientproductsPP. 52– 54 Promote environmental activities according to the highest standards in the materials industry by establishing environ-mental targets for the Group•ExamineandsettheGroup’senvironmentaltargets•ContinueexaminingthelifecycleCO2•Environmentalproductsaccountedfor16%oftotalsales•ImplementedabilateraloffsetcreditmechanismfeasibilitystudywithMexico(seepage35)APromote environmental activities according to the highest standards in the materials industry•Promotethedevelopmentofenvironmentalproducts•AchieveanAGCEnvironmentalIndicatorlevelof1.3orlessforgreen-housegases•Facilitateenergyconservationinmanufacturingprocesses,etc.Fair Operating PracticesAnti-corruption•Identifytherisksofcorruptionandimplementandmaintainpoli-ciesandpracticesthatcountercorruptionIncluded in the “Continue to promote compliance” sectionFair competition•Conductitsactivitiesinamannerconsistentwithcompetitionlawsandregulations,andcooperatewiththeappropriateauthorities•Establishprocedurestopreventengaginginanti-competitivebehavior•TrainemployeesontheimportanceofcompetitionlegislationandfaircompetitionP. 57Improve training and auditing related to compliance with antitrust laws•Providedtrainingoncompliancewithantitrustlawstoabout6,400employeesthroughonlinetrainingand740employeesthroughclassroomtraining•Createdguidelinestoensureadherencetoantitrustlawsandconductedrelatedauditsat52Groupcompaniesandin-houseorganizationsA9Improve training and auditing related to compliance with antitrust laws1 Oneoftheleadingglobalsociallyresponsibleinvesting(SRI)indexes2 ASwissSRIvalueassessmentcompany3 DownsideriskisdefinedastheriskofdamagetotheAGCGroup’sreputationandtrustworthiness4 EnterpriseRiskManagementiscarriedoutthroughouttheGroup5 ReasonforBevaluation:AtotaloftwofataloccupationalaccidentstookplacewithintheAGCGroup.6 Humanresourceswhoseachievementatagloballevelisexpected.Targets and ResultsIn line with the results of CSR monitoring, “Targets and Results” are disclosed with regard to items located in the most critical quadrant within the matrix of CSR issues.Chapter 2Responsibilities to Our Stakeholders41AGC Report 2012ISO 26000 ItemsThe AGC Group Targets and ResultsCore subjectsIssuesRelated actions and expectations (major issues)Refer-enceFiscal 2011 targets Fiscal 2011 resultsSelf-evaluationFiscal 2012 targetsOrganizational GovernanceDecision-making processes and structures•Nurtureanenvironmentinwhichtheprincipleofsocialresponsi-bility(accountability,transparency)ispracticedP. 44Continue to ensure effective communications in and out-side the Group•Continuetogainsociety’strustbyconductingtimelyandappropriatedisclosure•Continuouslyinteractwithstakeholdersthroughdialoguesandprovidingreportsthatreflectsociety’sexpectationsandtheprogressmadebytheGroup•Promptlydisclosedinformationonissuesofparticularinteresttothepublic,includingtheimpactoftheGreatEastJapanEarthquakeandmajorfloodinginThailandontheGroup’soperations•AddressedissuesinrelationtoISO26000andreflectedthedemandsofsocietyinthe2011CSRReport•AsahiGlasswasreinstatedintheDowJonesSustainabilityWorldIndex1andgivenaBronzeClassinthesustainableratingofSustainabilityAssetManagement2AContinue to ensure effective communications in and outside the Group•Continuetogainsociety’strustbyconductingtimelyandappropriatedisclosure•PublishacombinedannualandCSRreportthatmoreclearlypresentstheAGCGroup’sapproachtoprogressivelyintegratingbusinessoperationsandcorporatesocialresponsibility•EnhancecommunicationsbothinandoutsidetheGrouptoestablishastrongerbasisforCSRactivities•Nurtureanenvironmentinwhichtheprincipleofsocialresponsi-bility(ethicalbehavior,respectfortheruleoflaw)ispracticedP. 46Continue to promote compliance•ReviewtheGroupCodeofConductandpreparetherevi-sion•FurtherexpandthescopeofemployeessubmittingPer-sonalCertificationsontheCodeofConduct•CompletedareviewoftheGroupCodeofConduct•ObtainedPersonalCertificationsontheCodeofConductfromabout38,000employ-ees,representing81%ofallGroupemployeesAContinue to promote compliance•RevisetheGroupCodeofConduct•FurtherexpandthescopeofGroupemployeesrequestedtosubmitPersonalCertificationsontheCodeofConduct•ConductongoingcompliancetrainingandonlinetrainingprogramsforallGroupemployees•PeriodicallyreviewandevaluatethegovernanceprocessP. 44Implementing effective audits and promoting the PDCA cycle•Conductauditsofcountermeasuresagainstleakageofcon-fidentialinformationandcompliancewithantitrustlaws,withanemphasisontheGroup’sglobaluniformity•Commenceauditstargetingspecificdownsiderisks3•Conductedinternalauditsat49sitesintheGroup,focusingontheGroup’sglobaluni-formityandcoveringtheestablishmentofaframeworkforcomplyingwithantitrustlawsandprotectingconfidentialinformation•CarriedoutauditstoexaminetheimplementationofEnterpriseRiskManagement4bydivisionsinchargeofhandlingrespectivedownsiderisks3AImplementing effective audits and promoting the PDCA cycle•ContinueconductingauditsoftheframeworkintheGroupforobserv-ingantitrustlawsandmeasuresforprotectingconfidentialinformation•Conductauditstargetingthecompletionandapplicationofabusinesscontinuityplan(BCP)acrossGroupcompaniesinAsiaincludingJapanLabor PracticesConditions of work and social protection•Complywithanyobligationconcerningtheprovisionofprotec-tionforworkersinthecountryofoperationP. 47Create a work environment where employees can work with satisfaction and pride•Giveeachin-houseorganizationfeedbackonthethirdEmployeeSatisfaction(ES)survey•Prepareaself-inspectionlistforhumanrightsandlaborpracticesandconductasurveytocheckcompliancewithintheGroup•ContinueimplementingtheAGCGroupAwardsystem•ProvidedtheresultsofthethirdEmployeeSatisfaction(ES)surveytoemployees,formu-latedandimplementedmeasurestoimproveESateachin-houseorganization,andannouncedthemeasurestotheentireGroupinamessagefromtheCEO•Distributedtheself-inspectionlistforhumanrightsandlaborpracticesinDecember2010,andcheckedthestatusofcomplianceat157Groupcompanies;necessarycorrectivemeasureswerepromptlyimplemented•IncreasedthenumberofAGCGroupCEOAwardsawardeesbyapproximately20%,increasingtheawardeesparticularlyfromGroupcompaniesinAsiaandEuropeanditscontentswithexpandedmeasurestofacilitateglobalcooperationintheawardsystemACreate a work environment where employees can work with satisfac-tion and pride•PromotetheGroup-widedevelopmentofmeasurestoimproveemployeesatisfaction,andcreateopportunitiestoregularlyreviewrelatedactivitiesundertakenateachin-houseorganization•Employasecondvoluntaryself-inspectionofhumanrightsandlaborpracticesintheGroup•Continuetoimplementtheawardsystemwhilemakingimprove-mentsasameanstoawardjointlyimplementedbestpracticesandeffortstocreateaworkenvironmentthatrecognizesandappraisesachievementsHealth and safety at work•Develop,implementandmaintainpolicyonoccupationalhealthandsafety•Understandandapplyprinciplesofhealthandsafetymanage-ment(elimination,substitution,engineeringcontrols,administrativecontrols,workproceduresandpersonalprotectiveequipment)•AnalyzeandcontrolthehealthandsafetyrisksinorganizationalactivitiesPP. 50– 51 Foster the Group’s safety management activities•Improvetheeffectivenessoftheoccupationalhealthandsafetymanagementsystem(OHSMS)•Enhanceeducationonhealthandsafety,includingsafetypromotionactivities•Expanddisasterpreventionactivitiesfocusingonunsafehumanbehaviors•Obtainedthird-partycertificationoftheOHSMSat83plantsasofDecember31,2011•Enhancededucationonhealthandsafetybyimplementingongoingsafetypromotionactivitiesandexpandingsafetypatroltrainingintostratifiededucationalseminars,Haz-ardSimulationTrainingwasexpandedtoGroupcompanies•Producedabookletonpreventingdisasterscausedbyhumanerrortodrawattentiontounsafebehaviorsatwork,andcommencedtrainingateveryorganizationB5Foster the Group’s safety management activities•IncreasetheeffectivenessoftheOHSMS•Continuetoenhanceeducationonhealthandsafety,includingsafetypromotionactivities•Reduceaccidentsduetounsafeactionsaswellasaccidentscausedbyelderlyemployees•RaisethelevelofhealthmanagementReduce risks by improving health and safety audits•FromMarch2011,internalauditsofenvironment,safetyandsecuritywereimplementedwiththeInternalAuditOfficeinanefforttoimproveefficiencyReduce risks by improving health and safety audits•ConductauditsparticularlyatplantswithhighrisksassociatedwithhealthandsafetywhileaimingtodevelopamoreglobalauditingsystemPromote and ensure machinery safety•Fostermeasurestoexpandtheimplementationofthenewmachinerysafetystandard•ExpandtheSafetyAssessorprogramintomoreGroupcom-panies•PriorSafetyAssessmentSystem,safetyinspectionsinadvanceofinstallingproductionfacilities,beingimplementedatmostplantsinJapan•ConductedmachinerysafetytrainingforsupervisorsfromallrelevantorganizationsinJapan,andexpandedthetrainingtoincludeGroupcompaniesinAsiaotherthanJapan•Increasedthenumberofemployeesqualifiedassafetyassessorsby80andqualifiedassafetybasicassessorsby239inAsiaincludingJapanPromote and ensure machinery safety•Improvetheeffectivenessofsafetyinspectionstakeninadvanceofinstallingproductionfacilities•ExpandtheimplementationoftrainingrelatedtomachinerysafetyHuman resource development and training in the workplace•Provideallworkersatallstagesoftheirworkexperiencewithac-cesstoskillsdevelopment,trainingandapprenticeships•Provideallworkersatallstagesoftheirworkexperiencewithac-cesstoopportunitiesforcareeradvancementPP. 48– 49 Develop human resources that can drive the Group for-ward•Continueimplementingmeasuresforthedevelopmentofhumanresourcesforglobalmanagement6•Expandtheemploymentofhumanresourcesforglobalman-agement•Continuedconductingnext-generationleadertraining,andincludedtrainingsessionsinChinaforthefirsttime•Contemplatedtheorganizationandhumanresourcesaspirationsfor2020,andestab-lishedprioritytaskstowardthisendforthemediumterm;employedtheSkillMap(seepage49)inemploymentplansfortechnicalpersonnelADevelop human resources that can drive the Group forward•Improvethecontentofnext-generationleadertraining•Continueemployingglobalmanagementstaff6Enhance employee education and training programs•ExpandthescopeoftheAGCGroupimprovementactivi-ties•BeginningwithJapan,expandedtheAGCGroupimprovementactivitiestocertainareasofAsia,EuropeandNorthAmericaEnhance employee education and training programs•Developnewtrainingprogramsthatmakeuseofonlinetraining•ContinueexpandingthescopeoftheAGCGroupimprovementactivitiesThe EnvironmentPrevention of pollution•Identifytheimpactofitsdecisionsandactivitiesontheenvironment•Measure,recordandreportonitssignificantsourcesofpollutionandreductionofpollution,waterconsumption,wastegenerationandenergyconsumption•Prepareanenvironmentalaccidentpreventionprogramandanemergencyplaninvolvingworkers,authorities,localcommunitiesandotherrelevantstakeholders•ImplementmeasuresaimedatpreventingpollutionandwasteandproperlymanageunavoidablepollutionandwastePP. 52– 56 Further implement the integrated environmental manage-ment system (Integrated EMS) on a global basis•IncreasethenumberofsitesintheGroupincorporatedintheintegratedEMS•Furtherenhanceenvironmental-relatedcommunicationsglobally•NewlyaddedoneGroupcompanytotheintegratedEMS,bringingthetotalnumberofparticipatingplantsupto96intheGroupB8Promoting risk reduction and preventive measuresPromote Zero-landfill (waste) in the Group7•Achievedarecyclingrateof96.9%astheGroupaveragePromote Zero-landfill (waste)7 in the GroupClimate changemitigation andadaptation•IdentifythesourcesofdirectandindirectGHGemissionsanddefinethescopeofitsresponsibility•Measure,recordandreportonitssignificantGHGemissions,preferablyusingmethodsdefinedininternationallyagreedstandards•ImplementmeasurestoreducethedirectandindirectGHGemissionswithinitssphereofinfluence•RealizeenergysavingsbypurchasingofenergyefficientgoodsanddevelopmentofenergyefficientproductsPP. 52– 54 Promote environmental activities according to the highest standards in the materials industry by establishing environ-mental targets for the Group•ExamineandsettheGroup’senvironmentaltargets•ContinueexaminingthelifecycleCO2•Environmentalproductsaccountedfor16%oftotalsales•ImplementedabilateraloffsetcreditmechanismfeasibilitystudywithMexico(seepage35)APromote environmental activities according to the highest standards in the materials industry•Promotethedevelopmentofenvironmentalproducts•AchieveanAGCEnvironmentalIndicatorlevelof1.3orlessforgreen-housegases•Facilitateenergyconservationinmanufacturingprocesses,etc.Fair Operating PracticesAnti-corruption•Identifytherisksofcorruptionandimplementandmaintainpoli-ciesandpracticesthatcountercorruptionIncluded in the “Continue to promote compliance” sectionFair competition•Conductitsactivitiesinamannerconsistentwithcompetitionlawsandregulations,andcooperatewiththeappropriateauthorities•Establishprocedurestopreventengaginginanti-competitivebehavior•TrainemployeesontheimportanceofcompetitionlegislationandfaircompetitionP. 57Improve training and auditing related to compliance with antitrust laws•Providedtrainingoncompliancewithantitrustlawstoabout6,400employeesthroughonlinetrainingand740employeesthroughclassroomtraining•Createdguidelinestoensureadherencetoantitrustlawsandconductedrelatedauditsat52Groupcompaniesandin-houseorganizationsA9Improve training and auditing related to compliance with antitrust laws7 Zero-landfill(waste)isdefinedasrecyclingof99%ormoreofwaste.8 Thereasonsfortheself-evaluationof“B”arethattheAGCGroupEnvironmentalForumwascancelledowingtotheGreatEastJapanEarthquake,andZero-landfill(waste)forwastematterhavenotyetbeenachieved.9 FordetailsofthesettlementcasewiththeEuropeanCommissioninvestigatingtheGroup’sviolationofcompetitionlawsintheglassbulbsforcathode-raytubes(CRT)market,seepage57.Criteria for Self-evaluationA:Satisfactorylevel,inwhichtheintendedtargethasbeenachievedB:Almostsatisfactorylevel,inwhichapartoftheintendedtargethasnotyetbeenachievedC: Unsatisfactorylevel,inwhichtheintendedtargethasnotbeenachievedTargetsandresultsasdisclosedinthe2011CSRReport(notcoveredonthispage)www.agc.com/english/csr/agcgroupcsr/target.html42AGC Report 2012Chapter 2 Responsibilities to Our Stakeholders Organizational Governance The management of the AGC Group strives to achieve efficient and fully transparent operations as it works to undertake proper and effective decision-making, management execution and supervision. Corporate Governance Approach to Corporate Governance As stated in its basic policy concerning corporate governance, the AGC Group clearly separates the functions of oversight and execution of management, aiming to strengthen the man- agement oversight function while ensuring quick decision- making in management execution. Under this policy, the Group has been implementing measures to improve both the man- agement system and internal control system in order to ensure highly transparent and efficient management. Corporate Governance Structure The Board of Directors of Asahi Glass comprises seven direc- tors, including three outside directors1, and is tasked with ap- proving the AGC Group’s basic policy and monitoring the execution of its management. The management execution function is the responsibil- ity of executive officers below the President & CEO. As an advisory committee to the President & CEO, Asahi Glass es- tablishes the Management Committees and discusses busi- ness management monitoring and decisions regarding man- agement execution. A system of In-house Companies (quasi- subsidiaries within the Group) has been introduced and a global consolidated management system is adopted with re- gard to business execution. Much of the responsibility and authority for business execution has been delegated to the In-house Companies and the SBU. For the selection and evaluation of directors and execu- tive officers and for their compensation, Asahi Glass has es- tablished respectively the Nominating Committee and the Compensation Committee as non-statutory advisory commit- tees to ensure the objectivity and transparency of any deci- sions made. More than half the members of each committee are outside directors. In order to ensure impartiality in the selection of independent directors, the Group has determined its own selection standards over and above the regulations of Japanese corporate law. As to the compensation of directors (excluding outside directors) and executive officers, Asahi Glass has introduced compensation-type stock options allowing them to share ben- efits with shareholders, and has also introduced performance- linked bonuses for executive officers (including directors who serve also as executive officers). Independent directors, on the other hand, are paid only monthly compensation. Asahi Glass has also adopted a corporate auditor sys- tem. As of the end of March 2012, the Board of Corporate Auditors comprised four corporate auditors, including three independent auditors. 1 As of March 29, 2012 Attendance rate of each director in Board of Director meetings CSR Information Supplement P. 2 Overview of Corporate Governance Structure (as of March 29, 2012) General Meeting of Shareholders t h g i 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 i s u B Corporate Auditors: 4 Auditors (Including 3 Outside Corporate Auditors) Board of Directors: 7 Directors (Including 3 Outside Directors) Nominating Committee: 4 Directors (Including 3 Outside Directors) Independent Accountants n o i t a r e p o o C l a u t u M Executive Officers: Executive Officers: Executive Officers: Executive Officers: 29 Officers Internal Audit Office Group Corporate President & CEO Senior Executive Vice President & Overall business management Executive Vice President & Overall business management Senior Executive Officer & Overall business management Management Committee CSR Committee Compensation Committee: 4 Directors (Including 3 Outside Directors) Compliance Committee Fair Trade Committee Information Management Council Security Export Control Headquarters In-house Companies/Strategic Business Unit (SBU)2 3 In-house Companies: Glass Electronics Chemicals 1 SBU: AGC Ceramics 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 n o i t c n u F s s e n i s u B 2 An In-house Company is defined as a business unit with net sales exceeding 200 billion yen which conducts its business globally. At present, there are three In-house Companies: the Glass Company, the Electronics Company and the Chemicals Company. Business units smaller than this are defined as Strategic Business Units (SBUs). 43 AGC Report 2012 In response to the establishment of the Companies Act, Asahi Glass voted on its corporate policy over internal control at the Board of Directors meeting held in May 2006. The aim was to review and ensure the appropriateness of its business opera-tion systems, including the compliance system.After introducing the Internal Control Report System in compliance with the Financial Instruments and Exchange Act, the AGC Group Internal Control over Financial Reporting Im-plementation Regulations was established. Based on these regulations, the Group establishes, operates and evaluates internal controls for financial reporting. Internal control was evaluated as being effective in fiscal 2010 and 2011, and an external auditor confirmed the appro-priateness of the system in its evaluation.In fiscal 2012, an e-learning program for employees is planned with the aim of strengthening internal control functions.In order to maintain the independence of internal auditing divisions and implement effective and efficient auditing, the AGC Group has set up a framework that assigns the internal auditing global leader under the supervision of the Group CEO to oversee the regional leaders of Asia including Japan, Europe and North America. Under this system, each regional auditing division monitors their respective organization and works to make improvements. The global leader in charge of these divi-sions promptly reports on results to the Group CEO, and pe-riodically submits reports to the Board of Corporate Auditors and the Board of Directors. Since fiscal 2010, in addition to the oversight of audits at each organization, fiscal year global proj-ects designed to improve the level of management for the Group are also prepared. In fiscal 2011, the AGC Group conducted audits under the fiscal year project of complying with anti-monopoly laws and managing confidential information, and began pre-audits of the status of internal controls at new companies before their operations commenced.The AGC Group is a member of the World Business Council for Sustainable Development (WBC-SD) along with about 200 other companies around the world.The AGC Group actively discloses corporate information to stakeholders in a timely and appropriate manner. To manage the prompt disclosure of information, the Timely Information Disclosure Committee holds regular meetings to deliberate and decide on the need to disclose information related to matters under discussion by the Management Committee and Board of Directors, based on disclosure rules of the stock exchanges. For information of high interest to stakeholders, the public relations departments of Group companies in the Asia including Japan, Europe and North America regions co-operate to ensure such information is announced appropri-ately and promptly. The AGC Group provides various opportunities to en-gage in dialogue with shareholders and investors as a means to incorporate their opinions into management plans and en-sure that they are fully informed of the Group’s management strategies and financial performance. The AGC Group makes efforts to improve the conve-nience of information it provides to shareholders regarding the general meetings of shareholders, such as ensuring that notices of convocation are sent out as early as possible and posted on the Group’s Web site. Shareholders are also able to exercise their voting rights via the Internet. As part of investor relations activities, management holds presentations on its strategies and financial results, meetings to discuss quarterly and yearly financial results, and tours of facilities for analysts and institutional investors. Mem-bers of management also met for interviews on about 220 occasions in fiscal 2011. Furthermore, small meetings are held for individual investors, and a publication for shareholders, AGC Review, is issued twice per year. Through these means, the AGC Group aims to provide clearly presented information not only covering management strategies and financial results but also business activities and products. Furthermore, the AGC Group engages in interactive com-munications with stakeholders at all of its business sites, holding various kinds of events and dialogues with invited experts.Additionally, Asahi Glass is a member of the Council for Better Corporate Citizenship (CBCC) and Group companies are also actively involved in initiatives in their respective coun-tries and regions. For instance, AGC Flat Glass (Thailand) Pub-lic participated in the CSR-DIW Initiative promoted by Thai-land’s Department of Industrial Works (DIW) to gain CSR certification based on ISO 26000 standards.Implementation of Internal AuditsInternal ControlParticipation in External InitiativesCommunication with StakeholdersInternal Audit System StructureCSR Information Supplement P. 2For more information on stakeholder dialogues:www.agc.com/english/csr/communication/shd/Human Rights and Labor PracticesThe EnvironmentFair Operating Practices and Consumer IssuesCommunity Involvement and DevelopmentOrganizational GovernanceCore Subjects of ISO 2600044AGC Report 2012The AGC Group is united in its efforts regarding risk manage-ment. Founded on the corporate policy over internal control determined by the Board of Directors, the AGC Group defines its important risk factors, assesses their management status and reports the results to the Management Committee and the Board of Directors for periodic discussion. Divisions with jurisdiction over specific risk formulate action plans for risk management and develop a Plan, Do, Check and Act (PDCA) cycle in order to continuously improve and reform the level of risk management.The AGC Group began formulating its business continuity plan (BCP) in fiscal 2008 to prepare for a large-scale accident or disaster. Additionally, in March 2011, the Group issued the AGC Group Business Continuity Plan (BCP) Development Guideline as guidelines for use by divisions and sites when formulating BCPs for each type of risk. BCPs are reliably implemented and assessed based on the business continuity management pro-cess (BCM) for continuously maintaining and improving BCPs.In March 2011, the Group established the AGC Group Basic Principle to Cope with Natural Disasters to prepare for large-scale natural disasters that might take place in the regions in which the Group operates, and as a means to promote inte-grated and comprehensive countermeasures at sites in regions around the world where disaster risks are particularly high.In response to the Great East Japan Earthquake, oc-curred in March 2011, the Group revised these basic principles in December and established Rules for the AGC Group Task-force Headquarters (Natural Disasters Version). Furthermore, simulated drills for carrying out a business continuity plan were jointly conducted by busi-ness sites in Japan based on multiple scenarios, including damage to head office and other sites caused by major earthquakes occurring in the country’s Tokai, Tonankai and Nankai regions.In September 2011, the Electronics Company carried out drills simulating a switch of headquarters to the Kansai region. The drills assumed a scenario of an earthquake directly striking areas around Tokyo with a seismic intensity of level 6 and paralyzing the func-tions of the Group’s headquarters. The purpose of the drills was to practice setting up an alternative headquarters in Kansai region at the request of the In-house Company President due to the in-ability to use the headquarters building, or also in the event that communications from headquarters had broken down for a certain period as a result of the earthquake.Headquarters, plants in the Kansai region and manufactur-ing plants in and outside of Japan participated in the training. Under the hypothetical scenarios, it was confirmed that infra-structure and systems to be employed according to the BCP could operate, including a backup server located in the Kansai region that backs up data from the server at headquarters, the external Internet reporting system that maintains security, the emergency communication confirmation system, priority-use mobile phones and satellite communications. In addition to these initial drills, recovery activity training was conducted to examine how substitute production could be achieved through coopera-tion between manufacturing plants and sales divisions both in and outside Japan, based on the scenario of damage to manufactur-ing plants in the areas around Tokyo due to a disaster.Business Continuity Management (BCM) StructureMeasures for Natural DisastersApproach to Risk ManagementRisk ManagementExamples of risks managed by the AGC Group as a whole include those related to the following:• Procurement of resources• Product liability• Occupational accidents• Global environmental issues• Intellectual property rights• Compliance• Natural disasters such as earthquakes• Pandemic influenza• Information securityThe simulated drills jointly conducted in October 2011Preparing for a Major Earthquake in Areas around Tokyo with Training for a Switch of HeadquartersElectronics CompanyEach of the Group’s initiatives related to risk management and business continuity planswww.agc.com/english/csr/integrity/riskmng_2.htmlChapter 2Responsibilities to Our StakeholdersOrganizational Governance45AGC Report 2012To promote compliance policies in three world regions, the AGC Group holds a Global Compliance Meeting twice per year, with participation by managers in charge of compliance committees in each respective region. At the meetings, participants decide on medium-term compliance plans, monitor the progress of mea-sures undertaken in each region and share information concerning compliance. The information and decisions from these meetings are then shared at meetings of the regional compliance commit-tees to facilitate the implementation of such measures. The AGC Group Code of Conduct was established in June 2008 to ensure that all members of the AGC Group share the same values. The code comprises global requirements of busi-ness conduct for all employees in the Group to follow, as well as regional supplements that take into account the differing laws and business customs of respective countries and regions and include items to supplement the global requirements.Revisions to the Code of Conduct are planned in fiscal 2012 based on considerations of new risks that arise from changes in social conditions and revisions to laws in countries where the Group operates, as well as on the shared needs of the Group.The AGC Group has established three compliance committees below the Global Compliance Leader in the three regions of Asia including Japan, Europe and North America. Each compli-ance committee plans, prepares and implements compliance programs and then monitors its region's compliance efforts. Further, the committees hold a global compliance meeting twice per year to draw up policies, measures and other matters for the Group as a whole, the results of which are reported to the Board of Directors. In addition, the AGC Group has estab-lished a framework for promptly reporting information on serious violations of compliance to management through a system designed to monitor reports of compliance issues.The AGC Group has introduced a system in which its employ-ees periodically submit a personal certification to follow the AGC Group Code of Conduct. In this way, employees are given regular opportunities to renew their awareness of com-pliance and take a fresh look at business affairs and the work-place. The Group is aiming to expand the system to cover every employee.In fiscal 2011, 38,000 employees submitted personal certifications, which is equivalent to 81% of all Group employ-ees.The AGC Group has established compliance help lines1 for the Group as a whole and for each individual company to serve as a consultation service on compliance-related issues. To en-courage employees to use the service, the Group protects the anonymity of callers and strictly forbids any act of retaliation against anyone who makes a report in good faith. When users offer their real names, efforts are made to facilitate effective two-way communication and provide feedback on the status and results of handling reported problems.Holding Global Compliance Meetings Attended by Compliance Managers from Each RegionAGC GroupSubmission of Personal Certification on the Code of ConductGlobal Compliance SystemEstablishing Help Lines GloballyThe AGC Group Code of ConductThe Global Compliance MeetingCompliance1 National and regional help lines have been set up in Europe, North America, China, Japan, South Korea, and Taiwan.Compliance training resultsCSR Information Supplement P. 3Code of Conduct (Items for global requirements)CSR Information Supplement P. 3Global Compliance System CSR Information Supplement P. 3Number of help line consultationsCSR Information Supplement P. 3Human Rights and Labor PracticesThe EnvironmentFair Operating Practices and Consumer IssuesCommunity Involvement and DevelopmentOrganizational GovernanceCore Subjects of ISO 2600046AGC Report 2012To continuously evolve as a truly global enterprise, the AGC Group has formulated the 7 Key Principles for People to guide its various initiatives and activities aimed at realizing progres-sive human resources management.As specified in the Respect for People principles of the AGC Group Charter of Corporate Behavior, the AGC Group strives to respect human rights while forbidding discrimination, forced labor, child labor, or any infringement on human rights. To determine the level of compliance with the Charter at each of its Group companies, in 2010 the AGC Group created a survey form for Group-wide distribution. Based on results from 157 companies that conducted voluntary self-inspections, neces-sary corrective measures were promptly implemented.If problems related to human rights or labor issues occur, they are jointly addressed by the human resources department and the workplaces involved. Meanwhile, issues that are brought to attention via the Group’s help lines are handled by those in charge of compliance.The AGC Group implements Employee Satisfaction (ES) im-provement activities that allow employees to explore ways to solve issues in collaboration with management, including the Group’s executives, applying the concepts of effective com-munication and employee participation. These activities incor-porate ES approaches and initiatives in everyday management with the aim to evaluate and treat employees appropriately and provide greater opportunities for their personal growth and success. In one specific initiative, drawing on the results of its ES survey, the Group organizes small-group meetings at each workplace and formulates and implements action plans designed to improve ES through communication. The Group has conducted the surveys since 2005, and carried out a third survey in November 2010 in 18 languages involving about 40,000 employees.The AGC Group has set up a system for offering various awards with the goal to create a positive corporate culture that recog-nizes the contributions and efforts of its members. Awards cer-emonies are held in the three regions of Asia including Japan, Europe, and North America, and information on the awarded activities are shared in in-house magazines and the in-house homepage. As a result of efforts to promote the awards system throughout the Group, awards presented to European and Asian Group companies increased and the total number raised by about 20% in fiscal 2011 compared to the previous fiscal year.In May 2011, AGC Flat Glass Czech A.S. (AFCZ) newly acquired SA 8000, a global social accountability standard for decent work-ing conditions. Certification was performed for all of AFCZ: five manufacturing plants and a company service center with nearly 1,000 employees. SA 8000 certification indicates that AFCZ gives appropriate attention to worker health and safety and en-sures suitable work-life balance and conditions for employee development. By acquiring SA 8000, the company declares its commitment to fight human rights violations, child labor and forced labor.There were a number of tough steps leading up to our SA 8000 certification. First there was staff training, including an internal auditor, then the final adaptation of documents, including modi-fications of contractual relationships with suppli-ers. Although we voluntarily adhere to principles of good management, certification according to SA 8000 may represent a competitive advan-tage in the eyes of the society. In the future, we’re considering extending the certification to other Group companies in Central Europe.Surveys and Other Initiatives for Improving Employee Satisfaction (ES)Fundamental Approach7 Key Principles for PeopleRespecting Human Rights and Implementing Progressive Labor PracticesAGC Flat Glass Czech Acquires SA 8000 CertificationAGC Flat Glass Czech A.S.“”AFCZ Believes it is a Competitive Advantage as a Company to Show Improvements in the Working EnvironmentLibor SehnalHR Manager, AGC Flat Glass Czech A.S.Establishment of the AGC Group Awards System7 Key Principles for People (full text) CSR Information Supplement P. 4Selection of labor-related data CSR Information Supplement P. 6Data related to ES survey CSR Information Supplement P. 5Number of AGC Group awards CSR Information Supplement P. 5Human Rights and Labor PracticesThe AGC Group is working to create a workplace environment that is safe and rewarding, while achieving continuous growth with mutual respect among employees.Chapter 2Responsibilities to Our Stakeholders47AGC Report 2012In line with the Group’s efforts to localize business operations at its companies, the Electronics Company conducts training in Japan for the period of two months for key personnel from Group companies around Asia, with the aim to cultivate local staff for future leadership roles. In fiscal 2011, seven trainees from four Group companies in South Korea and China participated in such training, through which they learned about the manage-ment philosophy, methods for improving productivity and other subjects. In the training sessions I recently partici-pated in, I realized that I did not know much about the world. The training gave me good opportunities to study the AGC Group’s corporate culture, as well as Japa-nese culture, proper management methods for every plant and the role that I should pursue in my work in the future. By drawing on what I learned and capitalizing on what South Korea has to offer, I want to help make us the world’s number one display-related business. Based on its management outlook and business development strategies, in February 2011 the AGC Group began drawing a big picture of its organization and human resources in 2020 with the aim to draw on its diversity—the source of the Group’s competitiveness over the long term. As a part of these efforts, the AGC Group estimated the number of employees needed in each segment and country to implement its strategies aimed at 2020, in consideration of the total number of managers and employees working in the Group at present. Based on these results, the Group deter-mined priority tasks over the medium to long term: secure personnel for global management, secure key personnel in China, and cultivate local management staff in Southeast Asia. Going forward, the Group plans to carry out an array of initia-tives designed to complete these tasks. It is essential for managers at the helm of a global enterprise to have leadership qualities that are derived from values gen-erated through diversity. Therefore, to cultivate managers who can drive the Group forward, the AGC Group is grooming employees from a diversity of countries and regions regardless of nationality or gender as future leaders through the training system outlined in the chart at right. Since fiscal 2011, the AGC Group has been stepping up efforts to localize business operations at its Group companies in every region, inviting employees from around the world to Japan for necessary training and education. For instance, engineers from Group companies in Indonesia participated in onsite training in Japan at the Chemicals Company, a program that will expand to Group companies in Thailand and the United States in the future.Global programsAGC InstituteGlobal Leadership Sessions (GLS)Started in 2004 and targeted at general managersDynamic Leadership Sessions (DLS)Started in 2004 and targeted at middle and senior managersRegional programsAGC UniversityCountry programsAGC Management CollegeParticipants will deepen their understanding of the Group vision and values and improve their management knowledge and leadership through direct communication with top management.AGC Management College ChinaStarted from 2006AGC Management College JapanStarted from 2007AGC Management College ThailandStarted from 2009Targeted at young, middle-class managersParticipants, who are expected to be-comecore managers, will acquire man-agement knowledge and leadership mindsets.AGC University AsiaStarted from 2003AGC University EuropeStarted from 2008AGC University AmericasStarted from 2008Targeted at potential futurebusiness leadersParticipants, who are expected to become the business lead-ers of the next generation, will acquire global leadership skills through discussions with vari-ous members.Conducting Training in Japan for Key Personnel from Main Group Companies in AsiaElectronics CompanyMaking the Most of DiversityDrawing the Big Picture of Organization and Human Resources in 2020”Lee Kyung HyukExecutive Officer Manager, Asahi Glass Fine Techno Korea Grooming Global Leaders to Manage Diverse Human ResourcesThe AGC Group's Leader Training ProgramsEmployee composition and recruitment data CSR Information Supplement PP. 6-7“I Want to Apply What I Learned in Japan to Make Us the World’s Number One Display-related CompanyOrganizational GovernanceHuman Rights and Labor PracticesThe EnvironmentFair Operating Practices and Consumer IssuesCommunity Involvement and DevelopmentCore Subjects of ISO 2600048AGC Report 2012Chapter 2 Responsibilities to Our Stakeholders Human Rights and Labor Practices Employee Education System AGC Glass Europe Developing the Employee Education and Training System The AGC Group’s commitment to the idea that Our People are Our Strength, as found in its management policy, shows that it is taking steps to develop an education system to help its employees grow. It has put into place a training system to meet the needs of each In-house Company, in addition to providing technology- and skill-specific stratified training that enables each employee to learn the technologies and skills required by his or her position. The Group has also devised Group-wide activities, such as the AGC Group improvement activities, as well as an awards program. Employee education and training data CSR Information Supplement P. 7 Promoting AGC Group Improvement Activities Promoted through all departments, the AGC Group improve- ment activities are daily improvement activities and large-scale innovative improvement activities to achieve the overall goals of the organization. To foster the activities efficiently and effectively across the entire Group, scientific methods are used, such as indus- trial engineering (IE)-based methods, in addition to the adop- tion of training to foster improvement experts and other lead- ers, throughout the entire organization. In fiscal 2011, beginning in Japan, the Group expanded such activities throughout Asia and into parts of Europe and North America. The InnoWiz Program Aims to Turn Each and Every Member of Staff at AGEU into a Potential Innovator In 2010, AGC Glass Europe (AGEU) launched the InnoWiz Program as part of the AGC Group’s improvement activi- ties. This program collects innovative ideas from employ- ees throughout the company. After collection, ideas are submitted to the InnoWiz website, where employees can track the progress of their ideas. The InnoLink, a program coordinator at each site, ensures that the ideas are evalu- ated and, if appropriate, implemented. Through participa- tive innovation, the objective of the program is to put in place a dynamic process to ensure implementation of a maximum number of ideas. As of the end of 2011, 8,000 people currently have access to the program and the website holds 4,000 ideas, 700 of which are being implemented. Winners of the Award for Excellence in the Innowiz Program In Focus Applying the Skill Map to Advance Human Resources Management The AGC Group began applying Skill Map from fiscal 2010 with the aim to strengthen its competitiveness and further enhance employees’ capabilities by facilitating exchanges between professional personnel that possess highly special- ized knowledge, experience and skills. As of December 31, 2011, about 5,500 employees from various regions have been registered according to 26 technical categories and 14 sales and administrative categories of specialized fields in the Skill Map database, which is shared in the Group. By utilizing the Skill Map system, the Group has been able to assemble effective teams for projects that extend across divisions and organizations, and to systematically plan the security of human resources in the future. By bringing to- gether employees registered under every category of special- ization from other in-house organizations or countries, the system has helped in the completion of operational tasks while improving the individual skills of all employees involved. For example, research personnel in the AGC Group have shared ideas globally on the intranet in relation to their respective specialties. The Group also holds in-house conferences and workshops specific to each category of specialization under the system. 5,500 employees registered Skill E Skill D Skill C Skill C Skill B Skill A Group A Group B Group C Group D Group E Effective assembly of project teams Employment and hiring plans to secure future human resources (recruitment and training) Exchange of ideas between employees across divisions and countries 49 AGC Report 2012 As Safety Director at AGC Glass Europe (AGEU), my first step has been to expand the managerial mindset from a focus on efficient practices to “no production without safety.” Based on this commitment at all levels, our safety activity concentrates not only on countermeasures after accidents, but we also aim for preventive action and sharing best practices throughout the organization. In particular we are push-ing forward with a rolling Safety The AGC Group has formulated the AGC Group Basic Occu-pational Health & Safety Policy and promotes activities to re-duce the number of industrial and occupational accidents by assessing potential risks at on-site production facilities based on the occupational health and safety policy of “No produc-tion should be operated without assurance of safety.” Also, the Group is committed to enhancing the effectiveness of its activities by combining its daily health and safety activities1 with occupational health and safety management systems (OHSMS).The AGC Group is pushing ahead with health and safety ac-tivities by creating an occupational health and safety manage-ment system (OHSMS) in each In-house Company/SBU, and the CSR Committee regularly discusses relevant policies and measures, and its progress.Also, the Group is urging each of its manufacturing plants to obtain certification from an external OHSMS certifica-tion institution, and, in addition, is taking steps to improve the management level of health and safety through internal audits conducted by the Internal Audit Office and each In-house Company/SBU.Furthermore, the Group holds a Global Occupational Health and Safety Symposium on a regular basis with the participation of health and safety supervisors from various countries and regions, thereby disseminating best practices and deploying horizontal development at each manufacturing plant. In fiscal 2011, the symposium was suspended due to the Great East Japan Earthquake, but will be held in China in fiscal 2012.The AGC Group is taking steps to improve its risk assessment with an initiative to reduce the risk of occupational accidents.The AGC Group (Japan) trained managers and super-visors, and, from fiscal 2009 onward, implemented training for employees who conduct risk assessment at manufactur-ing plants. Further, under the banner of strengthening safety activities, the Group has sought to implement inten-sive education for risk assessment after selecting Core Safety Facilitators from among those in manufacturing and facility divisions at each plant. By the end of fiscal 2011, 102 employees were participating in the training, and, for the medium-term, the Core Safety Facilitators were placed in strategic points at manufacturing plants, where they were ex-pected to link safety and human resources training with the improvement of safety management by undertaking shop floor risk assessment.Also, the AGC Group (Asia) continues to make improve-ments in risk assessment with educational programs tailored for each manufacturing plant, with six additional regional im-plementations, including in China and Thailand in fiscal 2011.Improvement Plan comprising Lock-Out-Tag-Out1 procedures and a new IT tool for safety reporting. In addition, to better or-ganize safety in AGEU, we are running a 360° assessment on safety management in a mid-term plan by the new safety organiza-tion. We plan to reduce accidents with lost time by 50% per year, with an aim to achieve zero severe accidents in 2016.“”1 The system using tagged locks to prevent injury to workers due to a machine being ac-cidentally switched on during maintenance and other work.1 Health and safety activities such as the 5S (seiri [neatness], seiton [orderliness], seiketsu [cleanliness], seiso [cleanness] and shitsuke [discipline]), hazard protection, near-miss management (hiyari-hatto) and safety patrols which are promoted traditionally.AGEU Aims to Achieve Zero Severe Accidents through Enhanced Awareness of Safety Management and Implementation of Preventative MeasuresJan van LoonSafety Director CSR office AGC Glass Europe Occupational Health & SafetyReducing the Risk of Occupational AccidentsBasic Idea of Occupational Health & SafetyGlobal Health and Safety Management SystemA sign indicating a Lock-Out locationBasic Occupational Health & Safety Policy (full text) CSR Information Supplement P. 8Occupational health and safety management system and Number of plants obtaining third-party certification for OHSMSCSR Information Supplement P. 8Organizational GovernanceHuman Rights and Labor PracticesThe EnvironmentFair Operating Practices and Consumer IssuesCommunity Involvement and DevelopmentCore Subjects of ISO 2600050AGC Report 2012In order to realize a safe production environment, having safe manufacturing machines is essential. To that end, the AGC Group is taking steps to update the safety of its existing fa-cilities through ongoing risk assessment, while introducing safe manufacturing machinery (machinery safety).The AGC Group (Europe) has introduced safe manufac-turing facilities that have been assessed at the time of installa-tion and design, based on EU directives and in accordance with international safety standards such as ISO 12100. Starting in 2005, the AGC Group (Asia including Japan) has encouraged employees to qualify as Safety Assessors1 to design and introduce facilities based on an understanding of international safety standards. By the end of fiscal 2011, a total of 360 employees had acquired Safety Sub-Assessor qualifica-tions, while a total of 417 had obtained Safety Basic Assessor qualifications.Moreover, beginning in April, 2010, when introducing new facilities, it has become mandatory in Japan to assess facilities at the time of design and production, and plans to make such risk assessment mandatory throughout the other Asian regions will begin in fiscal 2013.In Asia, the AGC Group is implementing safety education through stratified education programs designed to raise safety awareness among newly appointed managers and safety managers, as well as working to revitalize training re-lated to daily health and safety activities such as near-miss management.In fiscal 2011, the Group started Safety Patrol Training, which aims to develop observation of risk factors onsite at production facilities. Also, the Group launched an occupa-tional accident prevention initiative focused on unsafe behav-ior, and created a text book on human error prevention slated for a fiscal 2012 global release, which classifies unsafe behav-ior and introduces preventive methods by category.The AGC Group has collected data since fiscal 2007 about occupational accidents at all locations throughout the Group.The collected data shows trends of occupational acci-dents according to region; there appears to be no change of trends in Asia including Japan, while in Europe, due to ad-vanced machinery safety, accidents involving workers getting caught in machinery are few, but accidents involving over-turned vehicles and during forklift operation continue to occur. The Group is committed to reducing the number of occupa-tional accidents by analyzing the results of its data collection and by promoting safety management initiatives throughout the entire Group.In fiscal 2011, the AGC Group experienced two fatal occupational accidents (one victim in Asia; one in Europe). The Group is committed to the goal of achieving zero serious ac-cidents in the medium-to long-term, accelerating the two ini-tiatives—eliminating serious occupational accidents, and improving safety awareness in each individual employee.0201030200(Number of accidents)(FY)FatalitiesAccidents requiring leaveFatalitiesAccidents requiring leaveFatalitiesAccidents requiring leaveFatalitiesAccidents requiring leave2007142008142009132010152011170201030(Number of accidents)(FY)2007262008162009122010920117015020010050250(Number of accidents)(FY)20072402008179200913520101352011138030201040(Number of accidents)(FY)200734200812200911201016201112222111121EuropeJapanAsia other than JapanNorth AmericaOccupational Accidents1 Under this qualification system for skills on machinery safety, which was established by some organizations including the Society of Safety Technology and Application, Japan, there are four different levels of qualifications: Safety Lead Assessors, Safety Assessors, Safety Sub-Assessors and Safety Basic Assessors.Number of Occupational AccidentsMachinery Safety to Introduce Safe Manufacturing Machines Improving the Level of Safety AwarenessSafety Patrol TrainingNoteThe assessment criteria for accidents requiring leave differ among Asia including Japan, Europe and North America, which disables the simple comparison of the numbers of occupational accidents among each region.Human Rights and Labor PracticesChapter 2Responsibilities to Our Stakeholders51AGC Report 2012In 2011, the PT Asahimas Flat Glass, Tbk’s Sidoarjo Plant was awarded a Green level PROPER rating by the government of In-donesia in acknowledgement of the plant’s excellent environment management programs. 1,002 companies currently participate in the PROPER pro-gram and of these, five received Gold ratings, the highest level, while 106 received Green ratings, the second-highest level. In Sidoarjo regency, only two sites received the Green rating.The Sidoarjo Plant was evaluated in four key areas: whether they had complied with rules and regulations over the previous five years; whether they were implementing pro-grams regarding energy saving, water conservation, and the handling of waste; whether they had biodiver-sity programs; and their CSR and community develop-ment activities.Recognizing that its operations have considerable impact on the environment, the AGC Group has positioned environmental protection as a top management priority. Accordingly, it has established the AGC Group Basic Environmental Policy to guide business activities in ways that contributes to the envi-ronment.The AGC Group has been building on and maintaining its in-tegrated environmental management system (Integrated EMS) since 2003. The objectives of the system are as follows: 1) The Group aims to carry out environmental activities on an operational-wide basis rather than independently at each plant by integrating EMS in each of In-house Companies.2) The Group aims to determine the effects of its entire op-erations on the environment in advance, extending from product design and assembly line organization through to manufacturing and transportation, to enable it to reduce the environmental impact of its products over the products’ entire lifecycle. Accordingly, it includes the head office, sales departments and R&D divisions in addition to manu-facturing plants in the Integrated EMS framework.Under this system, each organization works to attain the goals and plans set in the Integrated EMS, and progress is evaluated by management through the integrated EMS review. Furthermore, each plant is encouraged to have exter-nal inspections based on international standards by the same certification organization, as a way to determine the level of environmental management activities in each country and region where the Group operates. Management makes use of the results of these evaluations and inspections when drafting policies and plans for the following fiscal year to ensure that environmental management activities continuously improve. With a view toward enhancing its integrated manage-ment system, the AGC Group employs the same certification organization to inspect its quality assurance and occupational health and safety management system in addition to the en-vironmental system.AGC Flat Glass Philip-pines (AGPH) received the Don Emilio Abello Energy Efficiency Award from the Department of Energy of the Philippines in December 2011. AGPH was given an outstanding prize, mark-ing the second time it had received the award, having previously won in 2008.Named after the founder of the country’s environmental conservation movement, the Don Emilio Abello Energy Efficien-cy Award is given to companies that demonstrate progress in improving energy efficiency and implementing effective mea-sures aimed at mitigating climate change in line with national targets. AGPH received this award as the result of a number of energy-saving and conservation measures, including the optimi-zation of air compressor operations, changes in lighting equip-ment and rationalization of air conditioning.Environmental Performance Rating (PROPER) Program Green Award Received from the Government of IndonesiaEnvironmental Awards Received by the Glass CompanyEnvironmental ManagementThe AGC Group Basic Environmental PolicyBasic Environmental Policy (full text), Material Balance, Environmental AccountingCSR Information Supplement PP. 10-12Integrated Environmental Management SystemAGPH Receives Government Environmental Award in the PhilippinesAMG director receives the certificate from the Minister of the EnvironmentAward ceremonyPromotion structure of Integrated EMS and ISO 14001 certification status CSR Information Supplement P. 10Chapter 2Responsibilities to Our StakeholdersThe EnvironmentThe AGC Group regards the environment a top management priority and is committed to reducing environmental impact.52AGC Report 2012The AGC Group formulated the AGC Environmental Indicator in 2006 to independently assess the environmental impact of its manufacturing activities (details shown below). By using this indicator, the Group can calculate how much the environment is affected in relation to improvements in its economic perfor-mance while making further improvements. The Indicator is calculated based on the ratio of the AGC Group’s sales to GDP (economic contribution) and the ratio of the emissions of sub-stances of concern (SOC) from the Group’s manufacturing activities to the total (environmental impact ratio).Recognizing that it belongs to an energy-intensive industry, the AGC Group is promoting energy saving in areas such as within its production processes. In this regard, it has set a target value of 1.3 as measured by the AGC Environmental Indicator for greenhouse gas emissions. To meet this target, the Group is making use of fuel conversion and total oxygen combustion (see page 63) to improve production processes, installed cogeneration equipment and implemented energy conservation assessment. The value of the AGC Environmental Indicator for greenhouse gas emissions in fiscal 2011 was 1.5.The AGC Group is manufacturing and selling products that emit greenhouse gases besides CO2, fluorinated gases such as HFCs and SF6. Because the greenhouse gas coefficient of these fluo-rocarbons can range between several hundred to about 10,000 times that of CO2, they can be regarded as serious contributors to climate change. In this context, the Group is actively working to reduce its emissions of fluorocarbons generated from its manufacturing processes, and has continued to implement initiatives to recovering, breaking down and recycling fluori-nated gases for its customers since fiscal 1997. Furthermore, Asahi Glass reported that the volume of fluorinated gas emissions in fiscal 2011 was reduced by ap-proximately 99% compared to the Kyoto Protocol benchmark year (1995). The AGC Group is working to reduce greenhouse gas emis-sions in its non-manufacturing operations such as administra-tion and sales divisions. For instance, AGC Glass Europe (AGEU) is promoting energy savings through its Going Green Campaign for all employees, including those working in of-fices. In another example, Asahi Glass moved its head office in August 2011 to a building where all electricity is generated by raw green power1. To reduce emissions of greenhouse gases in its trans-portation operations, each region where the AGC Group oper-ates actively carries out a modal shift to transport, such as rail and ship. In addition, beginning in fiscal 2012, Asahi Glass plans to calculate CO2 emissions according to the Greenhouse Gas Protocol’s scope 3 standard for indirect emissions from such activities as employee business trips and commuting, transportation and supply chain operations. Global (Japan’s) GDPSales ofAGC Group (Asahi Glass)AGC Environmental IndicatorSOC emissionsin the world (Japan)SOC emissionsby AGC Group (Asahi Glass)EconomiccontributionEnvironmentalimpact ratioReducing Greenhouse Gas Emissions in Offices, Transportation and Other Non-manufacturing Operations1 Green power is generated entirely by renewable energy and deliv-ered directly to the consumer from the provider, allowing users to not simply consider green energy, but to directly experience their use of electricity.How to Calculate the AGC Environmental IndicatorReducing Greenhouse Gases Besides CO2The AGC Environmental Indicator to Determine Environmental ImpactAGC Environmental Indicator Data CSR Information Supplement P. 12Assessing Environmental ImpactReduction in Greenhouse Gas EmissionsCutting Down Emissions of Greenhouse Gas in Manufacturing OperationsRange of initiatives for saving energy in non-manufacturing operationswww.agc.com/english/csr/env/act/gas_3.htmlEmission of greenhouse gases other than CO2 CSR Information Supplement P. 13Per unit of energy consumption in transportation CSR Information Supplement P. 13Various energy-saving efforts in manufacturing operationswww.agc.com/english/csr/env/act/gas_2.htmlThe EnvironmentChapter 2Responsibilities to Our Stakeholders53AGC Report 2012In October 2007, AGC Flat Glass (Suzhou) (AFS) established a water conservation team in response to government request and the plant’s own developing needs. The goal of the team was to obtain certification as a water-saving company from the local government and to lead the company’s water consumption and conservation activities. When AFS started their water-saving activities, water in-take was about 1,600 m3/day and wastewater discharge was about 900 m3/day. Through these activities, the aim was to re-duce water intake to less than 1,000 m3/day and bring waste-water under 570 m3/day. The plant performed a water system balance test, installed water meters for all water lines and in-stalled and modified equipment for wastewater recycling and its reuse. As a result, the company achieved its water consump-The AGC Group is proactively working to promote the tech-nological development and production of photovoltaic mod-ule related materials, Low-E double glazing glass and other environmental products that can contribute to reducing the CO2 emissions of society. By visualizing the results of these efforts, the Group is also making progress in calculating CO2 emissions over product lifecycles. AGC Glass Europe (AGEU), for example, has determined the CO2 emissions generated when manufacturing glass prod-ucts and the CO2 emissions that can be reduced by using these products.In order to use its water resources more effectively, the AGC Group is promoting the recycling of cleaning and coolant wa-ter used in its manufacturing processes. Also, by setting envi-ronmental indicators, such as COD, that are specific to the characteristics of each site, the Group is working toward the prevention of water pollution.In fiscal 2012, there are plans to tabulate water intake from all regions and drainage data in more detail than is con-ventionally used.tion and discharge targets and received the desired government certification.AFS continues to further reduce water use while implement-ing wastewater recycling, aiming to bring water intake from 1,000 m3/day to 950 m3/day.0150100502002002011201010296353812306443714514720099265343312520071936499381502008133556635145(PJ)(FY)Group companies in North AmericaGroup companies in JapanAsahi GlassGroup companies in EuropeGroup companies in Asia other than Japan09,0006,0003,00012,000200(1,000 tons-CO2)(FY)201120102,0505634,2209,22020094842,2703,1108,02020079892,3104,9506182,82011,70020087702,6803,3002202224542,1602,4506504,5109,8602212,0201,9402,7809,980Group companies in North AmericaGroup companies in JapanAsahi GlassGroup companies in EuropeGroup companies in Asia other than JapanPromoting Water Reuse and RecyclingAGC Flat Glass (Suzhou)Effective Use of Water ResourcesDetermining CO2 Emissions over the Product LifecycleEffective Use of Water Resources and the Prevention of Water PollutionTotal Energy ConsumptionGreenhouse Gas EmissionsTotal wastewater and COD emissions CSR Information Supplement P. 13Members of the water conservation teamTank for wastewater reuseNoteDue to rounding, the percentage sum for each item does not necessarily amount to 100%.Organizational GovernanceHuman Rights and Labor PracticesThe EnvironmentFair Operating Practices and Consumer IssuesCommunity Involvement and DevelopmentCore Subjects of ISO 2600054AGC Report 2012Since 1992, the AGC Group has utilized the MSDS (Material Safety Data Sheet), providing its customers with information regarding the use, proper handling during disposal and effect on the environment of its products.In addition, the Group complies with the EU’s REACH chemical substances regulations with regard to the chemicals contained in its products, and conducted its first registration up to November 2010. Underpinned by the Chemicals Com-pany, REACH compliance is coordinated between the supervi-sors of related divisions and Group companies and their only representatives1 within the EU. In Japan, the Group has joined the Joint Article Management Promotion-consortium (JAMP), and provides information for MSDS plus. The Group is also registered as a sponsor in a joint program among the private and the public sectors for collecting and releasing safety in-formation of Japan HPV existing chemical substances (the Japan HPV Challenge Program).The AGC Group is promoting the installation of exhaust gas treatment facilities and the improvement of measurement and analysis technology in its plants both in Japan and other coun-tries. Necessary information about best practices and experi-ences with past pollution prevention activities within the Group are also shared beyond plants.In China, environmental legislation is becoming stricter year by year. In 2007, while adopting coating equipment at AGC Flat Glass (Dalian) (AFD), an exhaust gas treatment facil-ity was also installed. In 2009, Dalian city adopted stricter regulations for SOx emissions, and AFD was able to meet the regulation requirements by operating an existing desulfuriza-tion system, in operation since 2007.While stating that strict compliance with the applicable laws and regulations is a prerequisite, the AGC Group’s Guideline for Prevention of Soil and Groundwater Contamination sets standards for the storage and handling of hazardous substanc-es, storage tank management, and for drainage and rainwater management. The Guideline also sets basic rules about infor-mation disclosure with respect to the measures to be taken when soil or groundwater contamination is detected.Asahi Glass has been continuing measures to prevent the spread of any pollutants and to decontaminate polluted sites. It regularly reports progress to the relevant administra-tive agency and discloses this information on the Group web-site and through other media.The United Nations plans to draw up a treaty in 2013 on mercury reduction that will oblige businesses to manage their mercury, and has been advancing intergovernmental negotiations since 2010. The AGC group has moved beyond previous methods of brine electrolysis, such as diaphragm and mercury processes, to com-plete conversion to the ion-exchange membrane process in 2006, and cooperates as a supplier of important materials for ion-ex-change membranes. In January 2011, the second assembly of the United Nations Environment Programme’s (UNEP) intergovern-mental negotiating committee to prepare a global legally binding instrument on mercury was held in Chiba Prefecture in Japan. The AGC Group at-tended this assembly to pres-ent its role in the mercury re-duction treaty and its Flemion™ ion-exchange membrane.1 A system established by REACH, under which companies outside the EU appoint a corporation or individual to execute registrations and duties pursuant to REACH on their behalf.Proper Management of Chemical SubstancesVOC emissions and amount of PRTR substance emission/transferenceCSR Information Supplement P. 14Air Pollution PreventionPollution PreventionSOx, NOx, soot and dust emissionsCSR Information Supplement P. 14Prevention of Soil and Groundwater ContaminationParticipating in the United Nations Environment Programme’s (UNEP) Treaty on Mercury Reduction ActivitiesAGC GroupDisplay booth at the assembly venueThe EnvironmentChapter 2Responsibilities to Our Stakeholders55AGC Report 2012In fiscal 2009, the waste-recycling rate at AGC Micro Glass (Thai-land) (AMGT) was in the 50% range. However, by the latter half of fiscal 2010, AMGT had raised the rate to 99% and had achieved Zero-landfill (waste).Results were achieved by analyzing the current state of waste generation, disposal and recycling, listing possible waste-reduction measures, then intensively implementing promising measures. In particular, AMGT was able to greatly reduce its amount of landfill waste by recycling the filters from air conditioning units through The AGC Group is striving to achieve Zero-landfill (waste)1 globally. In fiscal 2011, 64 manufacturing plants achieved Zero-landfill (waste). The Group is encouraging improvement in plants that have not yet achieved Zero-landfill (waste) by introducing waste-reduction methods, new applications for recycling and other measures, supported by information sharing within the Group. The Group’s overall recycling rate in fiscal 2011 was 96.6%.The AGC Group states in its Basic Environmental Policy that it will give consideration to the influence of its activities on the natural environment including biological diversity. In April 2010 a document titled Consideration for Biodiversity was cre-ated, which shared important criteria on biodiversity in the course of business activities across the AGC Group. Asahi Glass is also a promotion partner for the Declaration of Biodi-versity by Nippon Keidanren.The AGC Group is also engaged in forestation activities, including planting trees in Thailand and Indonesia, and pro-motes the use of paper that contributes to sound forest man-agement by thinning in Japan.dismantling and separation and by rese-lecting materials for the abrasive com-pounds used in sandblasting.In addition, employee awareness has been raised through training in recy-cling and thorough actual performance of waste separation, and the circle of co-operation is expanding as each workplace conducts its own volunteer initiatives.In addition to striving to prevent accidents, damage from natural disasters and other crises (unforeseen accidents), the AGC Group is working to prevent the escalation of accidents that do occur by promoting countermeasures to deal prompt-ly and accurately with such crises.With regard to industrial safety and security activities, beginning in fiscal 2011, the Group has used an Integrated Environmental Management System to promote the reinforce-ment of risk reduction and preventative measures. Based on the action plans drawn up by the corporate organization, the CSR Office, each business division will promote fire prevention, disaster prevention and countermeasures for environment-related accidents. In addition to these, the Group will strive for continuous improvement through internal audits.14060402080200(1,000 tons)0989694100(%)(FY)AGC GroupGroup companies in JapanAsahi Glass 20112010322009135200797712008865896.399.599.699.596.92596.8431Recycling rate [AGC Group]Recycling rate [Asahi Glass]1 Zero-landfill (waste) is defined as recycling more than 99% of waste.Intensive Implementation of Waste Reduction Measures Results in Vastly Improved Recycling RateWaste Sent to Landfill and the Recycling RatesAGC Micro Glass (Thailand)Waste ReductionBiodiversity ConservationPromotion of forestation activities in each country and regionwww.agc.com/english/csr/env/act/biodiversity.htmlIndustrial Safety & SecurityBasic Industry Safety & Security Policy (full text) and number of small fires CSR Information Supplement P. 15Main members in activities to improve the waste-recycling rateOrganizational GovernanceHuman Rights and Labor PracticesThe EnvironmentFair Operating Practices and Consumer IssuesCommunity Involvement and DevelopmentCore Subjects of ISO 2600056AGC Report 2012The AGC Group was investigated by the European Commis-sion for possible violation of antitrust laws, from the second half of the 1990s to the mid-2000s, regarding glass bulbs for cathode-ray tubes (CRT). In October 2011, the Group reached a settlement with the European Commission and paid a fine of 45.1 million euros with the agency. In January 2012, Hankuk Electric Glass, a subsidiary of the Group, incurred a penalty of 18,318 million won after being investigated by Korean Fair Trade Commission regarding the same product. In light of the past conducts mentioned above later being accused, and in order that such incidents do not occur in the future, the AGC Group is taking every step necessary to ensure that all its operations are in compliance with antitrust laws.Specifically, in addition to the Group Code of Conduct, the Group has formulated and implemented global guidelines for compliance with antitrust laws. Under the guidelines, the legitimacy of having a meeting with a competitor company must be thoroughly vetted first. Thereafter, employees are obligated to obtain the permission of superiors in advance of the meeting, and then report in writing the outcome of the meeting. Further, the Group is implementing an array of ad-ditional measures, such as antitrust training workshops in each region and organization, monitoring of group enrollment and participation status in trade associations, and auditing of guideline compliance.The AGC Group is taking steps to promote appropriate stor-age, use, and management of information and information assets based on its Information Security Policy and Standard and its Information Security Guidelines. At the same time, the Group is steadily implementing a Plan, Do, Check and Act (PDCA) cycle to continuously improve information security through education measures such as e-learning and self-checks, and internal audits. In addition, at connection points in the Group network and with the Internet, measures are regularly taken to analyze and evaluate the vulnerability of administrator IDs and passwords for critical IT equipment.In fiscal 2011, the AGC Group self inspected the informa-tion security level of Group companies in every region and integrated this with its improvement activities. Also, informa-tion security advisers from the major Group companies in Asia assembled together in each country and shared informa-tion about pertinent issues and approaches to information security.The AGC Group formulated the AGC Group Purchasing Policy in 2009, and asks business partners in its supply chain to con-duct purchasing activities in line with this policy. In addition, the AGC Group introduced the Ombudsman System for Purchasing in 2004, which has been a critical part of the Group’s efforts to ensure transparency in its procure-ment activities and prevent misconduct. Under this system, business partners who encounter problems in dealing with AGC Group employees can notify in writing the General Man-ager of the Purchase and Logistics Center. Every effort is made to hold such reports strictly confidential while taking immedi-ate steps to solve any identified problems.In order to protect its shareholders and investors, and ensure the fairness and reliability of securities markets, the AGC Group is making every effort to spread awareness of insider trading and devise ways to prevent such misconduct. The prohibition against insider trading is clearly stated in the common funda-mental global principles in AGC Group’s Code of Conduct, and the Group is committed to raising awareness of this rule across the Group through online training and the personal certifications to follow the Code of Conduct that are submitted by employees. Furthermore, in Japan, the Group has its own rules on the prevention of insider trading and on the Informa-tion Management Council. Based on these rules, if an AGC Group director/employee has concerns about commencing a trade, the chairman of the council will check the legality of the trade in advance, thereby preventing insider trading.Compliance with Antitrust LawsFair Operating PracticesMaintaining Information SecurityMeasures implemented in fiscal 2011 to prevent noncom-pliance with antitrust laws (AGC Group)• Number of employees receiving online training (e-learning): about 6,400• Number of employees receiving classroom training: about 740• Number of internal audited sites: 52 Group companies and divisionsEnsuring Fair Purchasing PracticesPrevention of Insider TradingNumber of self-checks on information securityCSR Information Supplement P. 16AGC Group Purchasing Policy (full text)CSR Information Supplement P. 17Global legal management systemCSR Information Supplement P. 16Chapter 2Responsibilities to Our StakeholdersFair Operating Practices and Consumer IssuesTogether with fair operating practices, the AGC Group pursues customer satisfaction based on the provision of high-quality products.57AGC Report 2012The AGC Group is committed to continuously improving effectiveness and efficiency by building and operating a quality management system based on ISO 9001 in each department, in accordance with the AGC Group Quality Management Principle and AGC Group CS Guideline.Also, each In-house Company/SBU carries out its own internal audits and reviews in a way best suited to its business, while undertaking a Plan, Do, Check and Act (PDCA) cycle for continuous quality improvement. The CSR Office also con-ducts quality monitoring across the Group to ensure the ef-fectiveness of management systems.The AGC Group is taking steps to ensure compliance with pertinent laws and regulations, by creating a list of such requirements for each of its In-house Company/SBU and clarifying the legal and regulatory requirements that each of its products must meet. The nature of the list involved is revised annually in January.Furthermore, in fiscal 2011, by identifying past violations outside the Group, and by compiling lists for products that fall under inspection laws (such as those determined by JIS), the Group has been promoting efforts to “visualize” compliance.The AGC Group is encouraging all employees to participate through their daily work in the enhancement of customer sat-isfaction under the slogan “incorporating the concept of CS into each employee’s daily work processes.” CS is an abbre-viation for customer satisfaction, but the term is not limited to customers who are consumers in the marketplace. The Group includes in its definition of customers “people and organiza-tions who receive benefit (value) from the outcome of work,” such as products and information, within the work process of the Group.In fiscal 2011, the Group promoted initiatives such as integrating CS training at various levels of Group training, in order that the spirit of CS might take root in the DNA of the AGC Group.With an aim to promote AGC as a brand and to interact with stake-holders, AGC Glass Europe (AGEU) began using social media services from July 2011. The initiative hopes to reach out to various stakeholders, such as customers, industry professionals, potential job candidates, the press and the public at large.The result of the activity was a steady growth in fans, followers, likes, retweets and com-ments. This trend is ex-pected to continue in 2012 with further target group interactivity.In October 2010, Asahi Glass opened “AGC studio,” a place where the true nature of archi-tectural glass can be experi-enced, in Kyobashi in Tokyo’s Chuo Ward. By the end of fis-cal 2011, it had been visited by more than 10,000 visitors.AGC studio is intended to be a place where general visitors with an interest in glass, not just business partners, researchers and architects, can stop in at their leisure and learn about the nature of glass and ask questions about how glass can be used or applied. By opening communica-tion channels with a broader range of people, the Group aims to discover unprecedented applications of glass, and create a new culture of glass.Consumer IssuesQuality AssuranceImproving the Quality of Products and ServicesCS Guideline (full text), Quality Management System, Status of System Acquisitions such as ISO 9001, Number of Employees who Passed the QC Certification ExaminationCSR Information Supplement P. 18Complying with Legal and Regulatory Requirements for ProductsNumber of Reported Serious Product AccidentsCSR Information Supplement P. 18Pursuit of Customer Satisfaction (CS)Number of participants in CS related trainingCSR Information Supplement P. 17Efforts to promote CS in each In-house Companywww.agc.com/english/csr/fair/cs.htmlFacebook™1 pageAGC studio1 A registered trademark of Facebook Inc.AGC Glass Europe Reaches Out to Stakeholders through Social Network Services (SNS) Communication with Customers at the Glass CompanyAGC studio: Developing a Space where the True Nature of Glass can be ExperiencedHuman Rights and Labor PracticesThe EnvironmentFair Operating Practices and Consumer IssuesCommunity Involvement and DevelopmentOrganizational GovernanceCore Subjects of ISO 2600058AGC Report 2012Chapter 2 Responsibilities to Our Stakeholders Community Involvement and Development The AGC Group promotes activities that contribute to community development, working towards the resolution of social issues deriving from regional business development. Social Contribution Activities AGC Group Social Contribution Basic Policy In February 2010, the AGC Group established the AGC Group Social Contribution Basic Policy. The Group had conducted social contribution activities in areas around the world prior to this, but thought it important to increase understanding among customers, shareholders, investors and society as well as business partners, employees and all other stakeholders in order to further promote these activities. In fiscal 2011, a variety of social contribution activities introduced on these pages were implemented based on this policy. In the future, in addition to continuing the activities in each region, the Group will promote activities meant to contribute to the resolution of social issues in fast-growing countries in which business activities are being developed. Social Contribution Basic Policy (full text) CSR Information Supplement P. 19 AGC Group Social Contribution Basic Policy Priority Areas Support for the next generation We, as a creator of future value, support the development of children, who will carry the future, helping them to live out their dreams. Harmony with local communities We, as a member of the communities in which we operate, contribute to their sustainable development. Natural environment conservation We, as a global enterprise, contribute to the solution of global environmental problems. Expenditures in Fiscal 2011 for Social Contribution Activities Others 5% Natural environment conservation 9% Total 814 million yen (525 million yen1) Support for the next generation 19% Harmony with local communities 67%2 1 Amount in parentheses is total for fiscal 2010 2 Since expenditures related to the Great East Japan Earthquake fell under “Harmony with local communities,” resultant expenditures for this area are comparatively greater. Detailed data regarding social contribution activity expenditures CSR Information Supplement P. 19 59 AGC Report 2012 Europe—— AGC Group Participation in activities that contribute to reductions in CO2 emissions such as the promotion of low-carbon initiatives in schools Detailed information: www.agc.com/english/csr/social/ activity_4.html United States—— AGC Automotive Americas Recovery and recycling of used electronic equipment, such as computers Detailed information: www.agc.com/english/csr/social/ activity_4.html Taiwan—— AGC Display Glass Taiwan Financing and volunteer activities instituted for children’s home Detailed information: www.agc.com/english/csr/social/ activity_2.html Indonesia—— PT Asahimas Chemical Creating jobs through wooden pallet business Detailed information: www.agc.com/english/csr/social/ activity_3.html South Korea—— Asahi Glass Fine Techno Korea Hanwook Techno Glass Asahi PD Glass Korea Books donated and book report competition hosted Detailed information: www.agc.com/english/csr/social/ activity_2.html In Focus AFT Applies the PDCA Cycle in Activities Aimed at Contributing to Local Communities AGC Flat Glass (Thailand) Public (AFT) began implementing the Plan, Do, Check, Act (PDCA) Cycle in CSR operations in 2006, and since then, has expanded it to encompass commu- nity development activities conducted by the company since 1974. AFT created a standardized PDCA form to systemati- cally evaluate the progress of each project from the stand- point of ensuring its sustainability. Furthermore, the company has been making the most of its management capabilities and networks to collaborate in various projects with commu- nity residents, experts and NGOs. As an example of how the cycle is implemented, in its Open Kids’ Vision project, AFT planned activities for improv- ing the education of children in rural forested regions, and then made sure that everything, including constructing a mul- tipurpose building in their region, was carried out. When progress was checked, it was apparent that the children had developed their skills in traditional dancing and music, through which they gained a deeper sense of pride in the local community. AFT is now acting on these results to plan future activities. PDCA cycle. AFT intends to continue contributing to community development and foster these activities by implementing the AFT employees who built the facilities with local residents PDCA sheet Social contribution activities in various parts of the world Support for the next generation www.agc.com/english/csr/social/activity_2.html Harmony with local communities www.agc.com/english/csr/social/activity_3.html Natural environment conservation www.agc.com/english/csr/social/activity_4.html Core Subjects of ISO 26000 Organizational Governance Human Rights and Labor Practices The Environment Fair Operating Practices and Consumer Issues Community Involvement and Development Europe—— AGC Group Participation in activities that contribute to reductions in CO2 emissions such as the promotion of low-carbon initiatives in schools Detailed information: www.agc.com/english/csr/social/ activity_4.html United States—— AGC Automotive Americas Recovery and recycling of used electronic equipment, such as computers Detailed information: www.agc.com/english/csr/social/ activity_4.html AGC Group Social Contribution Basic Policy Priority Areas Support for the next generation We, as a creator of future value, support the development of children, who will carry the future, helping them to live out their dreams. Harmony with local communities We, as a member of the communities in which we operate, contribute to their sustainable development. Natural environment conservation We, as a global enterprise, contribute to the solution of global environmental problems. Expenditures in Fiscal 2011 for Social Contribution Activities Others 5% Natural environment conservation 9% Total 814 million yen (525 million yen1) Support for the next generation 19% Harmony with local communities 67%2 1 Amount in parentheses is total for fiscal 2010 2 Since expenditures related to the Great East Japan Earthquake fell under “Harmony with local communities,” resultant expenditures for this area are comparatively greater. Detailed data regarding social contribution activity expenditures CSR Information Supplement P. 19 Taiwan—— AGC Display Glass Taiwan Financing and volunteer activities instituted for children’s home Detailed information: www.agc.com/english/csr/social/ activity_2.html Indonesia—— PT Asahimas Chemical Creating jobs through wooden pallet business Detailed information: www.agc.com/english/csr/social/ activity_3.html South Korea—— Asahi Glass Fine Techno Korea Hanwook Techno Glass Asahi PD Glass Korea Books donated and book report competition hosted Detailed information: www.agc.com/english/csr/social/ activity_2.html In Focus AFT Applies the PDCA Cycle in Activities Aimed at Contributing to Local Communities AGC Flat Glass (Thailand) Public (AFT) began implementing the Plan, Do, Check, Act (PDCA) cycle in CSR operations in 2006, and since then, has expanded it to encompass commu- nity development activities conducted by the company since 1974. AFT created a standardized PDCA form to systemati- cally evaluate the progress of each project from the stand- point of ensuring its sustainability. Furthermore, the company has been making the most of its management capabilities and networks to collaborate in various projects with commu- nity residents, experts and NGOs. As an example of how the cycle is implemented, in its Open Kids’ Vision project, AFT planned activities for improv- ing the education of children in rural forested regions, and then made sure that everything, including constructing a mul- tipurpose building in their region, was carried out. When progress was checked, it was apparent that the children had developed their skills in traditional dancing and music, through which they gained a deeper sense of pride in the local community. AFT is now acting on these results to plan future activities. AFT intends to continue contributing to community development and foster these activities by implementing the PDCA cycle. AFT employees who built the facilities with local residents PDCA sheet Social contribution activities in various parts of the world Support for the next generation www.agc.com/english/csr/social/activity_2.html Harmony with local communities www.agc.com/english/csr/social/activity_3.html Natural environment conservation www.agc.com/english/csr/social/activity_4.html AGC Report 2012 60 Chapter 2 Responsibilities to Our Stakeholders Community Involvement and Development Main Support Activities for Areas Affected by the Great East Japan Earthquake AGC Group (Japan) Laminated Glass for Earthquake/Typhoon Resistance Donated to Disaster Area Schools through Glass Power Campaign As part of its contribution to society through business, the AGC Group runs the Glass Power Campaign, a project in which laminated glass for earthquake/typhoon resistance is donated to designated evacuation places in municipalities in Japan. At the end of 2010, donations had been made to 23 places since the project’s beginning in October 2005. In fiscal 2011, due to the Great East Japan Earthquake, donations were made to nine facilities in the prefectures of Iwate, Miyagi and Fukushima. Construction was performed in stages beginning in September, and by February 2012, donations to all the facilities had been completed. People involved with the recipient schools said, “Having safe glass here means that we’ve gained safety for the whole community, not just the school.” The gymnasium of Hashiura Municipal Elementary School in Ishinomaki City, a laminated glass for earthquake/typhoon resistance recipient Providing Continuous Support for Disaster Victims as a Company Local to the Disaster Area AGC Electronics (AGEL), located in Fukushima Prefecture’s Koriyama City, believed that its own future could not be bright if the Fukushima area did not recover, and concentrated its effor ts on suppor ting the victims of the Great East Japan Earthquake. Specifically, the company donated fully laminated tempered glass tableware, an AGC Group product, and also hosted a social gathering in the form of a barbecue and provision of imoni (stewed potatoes) at temporary housing for refugees from Namie town. In addition, AGEL drew up and donated maps for area children showing the radiation measurements along the way to their schools. AGEL plans to continue doing what it can do for the local community, including conducting support activities at the temporary housing. Donation of maps showing radiation measurements to the elementary school New Scholarship System for High School Victims of Disaster The Asahi Glass Scholarship Foundation has established a new scholarship system for high school students affected by the Great East Japan Earthquake in 2011. The effects of the earthquake on learning environments are varied and long-term. This system was established so that students who sustained damaging or economic effects would not be forced to give up on their studies, and provides scholarships to students currently in high school. Scholarships for students who plan to continue on to a higher institution after graduation will include the time they spend at that institution as well. Scholarship students will be recruited for three years, beginning in fiscal 2012, from 11 schools in the badly damaged area along the Pacific coast of the Tohoku Region. Iwate Miyagi Fukushima High schools eligible for scholarships Measures taken in response to the Great East Japan Earthquake www.agc.com/english/csr/social/news.html 61 AGC Report 2012 : Initiatives : Activity examples and employee comments : Examples of CSR-related awardsSupplementary to the information presented in this report, the CSR Website is contains data and initiatives, as well as examples of activities that are not contained herein.CSR Website AccessCategory in this report 1Title on CSR Web page and main content 2Scope of activityURLCSR at the AGC GroupPP. 39–40CSR Promotion System and Cases Progress in CSR Management Recognized by the Ministry of Industry in Thailand Regional Government in Indonesia Gives Top Honors in its CSR AwardsAGC Flat Glass (Thailand) Public PT Asahimas Flat Glass, Tbk www.agc.com/english/csr/agcgroupcsr/system.htmlOrganizationalGovernancePP. 43–46Internal Audits Environmental Safety and Security AuditsAGC Groupwww.agc.com/english/csr/integrity/csrmng.htmlParticipation in External Initiatives Participating in Initiatives as a WBCSD Member CompanyAGC Groupwww.agc.com/english/csr/integrity/membership.htmlRisk Management Measures for Pandemic Influenza/AGC Group Basic Principle to Cope with Natural Disaster/Business Continuity Plan Cases Ensuring Stable Procurement of the Rare Earth, Cerium oxide, for Glass-polishing Material Guidelines Concerning Radiation Exposure to Ensure a Safe Work-ing Environment for EmployeesAGC Group AGC Group AGC Ceramics www.agc.com/english/csr/integrity/riskmng.htmlCompliance Compliance Training Compliance Meeting Between Thailand, Indonesia and the Philippines Compliance Measures in Europe and North AmericaAGC GroupAGC Group (Asia other than Japan)AGC Group (Europe/North America)www.agc.com/english/csr/integrity/compliance.htmlCommunication Activities Public Relations/Investor Relations/Returns to Shareholders/Communication within the GroupAGC Groupwww.agc.com/english/csr/communication/stakeholders.htmlHuman Rights andLabor PracticesPP. 47–51Respect for Human Rights and Sufficient Labor Practices Thailand’s Best Practice Workplace on Labor Relations and Labor Welfare Award Won Consecutively Receiving KAPATID Award for Two Categories by the Employers Confederation of the PhilippinesAGC Automotive (Thailand) AGC Flat Glass Philippines www.agc.com/english/csr/employee/human_rights.htmlMaking the Most of Diversity Exchange Researcher’s Comment Comments from Participants of the Regional Program for Leader TrainingJapan/BelgiumAGC Group (Asia including Japan) www.agc.com/english/csr/employee/diversity.htmlEmployee Education Transfer of Skills from High Performers/AGC Monozukuri Training Center Enhancement of Employee Safety, Technology and Skills Education, and Contributions to Regional Development of Human ResourcesAGC GroupPT Asahimas Chemical www.agc.com/english/csr/employee/education.htmlOccupational Health & Safety Hazard Simulation Training/Health Management Policy Hazard Simulation Training Participants’ Comment Implementation of Safety Measures beyond National and Organi-zational Boundaries Sharing the Importance of the Safety and Environment with Fami-lies and Local Communities Achieving Zero Accidents by Indonesia’s Ministry of Manpower and Transmigration Selected as Healthy WorksitesAGC GroupPT Asahimas Flat Glass, Tbk Electronics Company/ Chemicals CompanyAGC Automotive Americas PT Asahimas Flat Glass, Tbk AGC Display Glass Taiwanwww.agc.com/english/csr/employee/safety.htmlThe EnvironmentPP. 52–56Environmental Management Expanding the Integrated EMS in each In-house Company/Promotion of Risk Reduction Activities at Each PlantAGC Groupwww.agc.com/english/csr/env/act/mng.htmlEnvironment, Safety & Security Education Going Green Campaign Sees Steady Improvement Eco Club—A Volunteer Group Involved in Activities for the EnvironmentAGC Glass EuropeAGC Group (Japan) www.agc.com/english/csr/env/act/education.htmlReduction in Greenhouse Gas Emissions Installing a Co-generation System to Reduce GHG Emissions Melting Furnace Energy-Saving Technology (In-flight Melting, Total Oxygen Combustion, All-electric Melting, Fuel Conversion) Using Caustic Soda to Recover and Recycle CO2 Expanding the Scope of Energy Conservation Assessment Recovering and Recycling CFCs Reducing the Environmental Impact of Transportation Implementing Rotating Shift Work to Save Electricity in the After-math of Japan’s Earthquake DisasterAGC Glass Europe AGC Group Chemicals CompanyAGC GroupChemicals CompanyAGC Glass EuropeAGC Group (Japan) www.agc.com/english/csr/env/act/gas.htmlLife Cycle CO2 Emissions Calculation of the Carbon Footprint Associated with the Manufac-ture and Use of ProductsAGC Glass Europewww.agc.com/english/csr/env/act/lc.htmlWater Resource Usage Selemion™, Ion-exchange Membranes, for Safe Drinking Water Reducing Water Use and Promoting Water RecyclingAGC Engineering PT Asahimas Flat Glass, Tbkwww.agc.com/english/csr/env/act/water.htmlChemical Substances Management Chemical Substances Management Manual/Considerations for Safety during Chemical Transport/Proper Management and Treat-ment of Asbestos Compliance with PRTR Act and VOC Reduction/Proper Manage-ment and Treatment of PCBs Accepting Trainees from OPCW Issuing MSDSs for Each CountryAGC Group AGC Group (Japan) Chemicals CompanyChemicals Companywww.agc.com/english/csr/env/act/chemical.htmlPollution Prevention Air Pollution Prevention ActivitiesAGC Glass Europewww.agc.com/english/csr/env/act/pollution.htmlBiodiversity Conservation Forestation Activities in Each Country and Region Using Simple Pallets to Improve Transportation Efficiency Proactive Use of Paper that Contributes to Sound Forest Manage-ment by ThinningAGC Group CompaniesAGC Group (Asia including Japan)AGC Group (Japan) www.agc.com/english/csr/env/act/biodiversity.htmlEnvironmental Products Introducing Environmental ProductsAGC Groupwww.agc.com/english/csr/env/products/Industrial Safety & Security Fire Prevention and Recurrence Prevention/Disaster Prevention and Environment-related Accident Countermeasures Safety and Security EffortsAGC Group AGC Flat Glass (Dalian)www.agc.com/english/csr/env/security.htmlFair Operating Practices and Consumer IssuesPP. 57–58Fair Operating Practices Global Legal Management System/Legal Employment of Contract and Temporary Workers/Compliance with the Act against Delay in Payment of Subcontract Proceeds, Etc., to Subcontractors/Protecting and Respecting Intellectual Property RightsAGC Groupwww.agc.com/english/csr/fair/habitp.htmlWith Business Partners Occupational Health and Safety Education Among Business Partners Promoting Green Procurement/Initiatives Related to Conflict Minerals Satisfaction Survey for Business Partners, Annual Suppliers MeetingAGC Group (Japan)AGC GroupAGC Group www.agc.com/english/csr/fair/business_partner.htmlQuality Assurance Compliance with the Consumer Products Safety Act Quality Management in Each In-house Company/Implementation of Quality TrainingAGC Group (Japan)AGC Group www.agc.com/english/csr/fair/qms.htmlCustomer Satisfaction Implementing Full-Scale CS Training Efforts to Promote CS in Each In-house CompanyAGC GroupAGC Groupwww.agc.com/english/csr/fair/cs.html1 From “Organizational Governance” onwards, the core subjects cited in ISO 26000 2 Excerpt62AGC Report 2012Research & Development Since its foundation, the AGC Group has developed its core technologies centered on the areas of glass, chemicals and ceramics. In an effort to build the foundations for growth set forth in , the AGC Group examines global trends with a long-term perspective, sets a clear direction for technological strategies, and strives for the sophistication, integration and application of its core technologies. technologies” that form the basis for these technologies. Through the sophistication, integration and applica- tion of our core technologies, the Group works on techno- logical development to build foundations for growth set forth in the Group’s management policy, . Building Foundations for Growth through the Sophistication, Integration and Application of the Group’s Core Technologies The AGC Group’ s core technologies are centered on “glass materials and glass manufacturing technologies,” “coating technologies,” “optics and electronics technologies,” “ceramics material technologies” and “fluorine and other chemistry technologies,” as well as “fundamental common Core Technologies of the AGC Group and Foundations for Growth Set forth in Core Technologies Glass materials and glass manufacturing technologies • Glass materials design • Glass manufacturing • Glass forming and processing Coating technologies • Dry coating • Wet coating • Patterning Optics and electronics technologies • Liquid crystal materials • Fine pattering • Assembly • Optical design Ceramics materials technologies • Refractory lining • Fine ceramics Fluorine and other chemistry technologies • Fluorine chemistry • Electrochemistry • Inorganic materials • Nanomaterials Fundamental common technologies • Engineering • Sensing • Evaluation and analysis • Simulation Glass-technology-driven Company Enhancing Manufacturing Technologies to Make Progress in New Product Development Ultra-Thin Glass The AGC Group has success- fully developed ultra-thin glass using the float process. This ultra-thin glass is the world’ s thinnest float glass with a thickness of only 0.1 millimeters. (See page 31) Dragontrail™ Specialty Glass for Chemical Strengthening The AGC Group has devel- oped this specialty glass for chemical strengthening that dramatically increases the strength, scratch resistance, and texture quality of cover glass for smartphones and other displays. (See page 19) Delivering Technology Solutions for Environmental and Energy Issues Developing Production Processes and Environmentally Friendly Products Hot-oxy Combustion With oxygen as the sole fuel used, NOx emissions are d e c r e a s e d a n d e n e r g y efficiency is increased. Oxygen heated by heat exchange Energy efficiency improved Oxygen Exhaust gas In-flight Melting By injecting granular materi- als into plasma combustion flames, energy and CO 2 emissions can be reduced by half during the glass melting stage. Glass melted Glass melting furnace Injection of granular materials Oxygen burner Plasma torch Plasma Melting of granular materials Melting tank High-speed refining To forming process 63 AGC Report 2012 AGC Report 2012 64 Carrying out Seamless Operations Ranging from Technology Outlook and Technology Roadmap, Basic Research to Product Development which Define the Direction of the Group’s In R&D, the Research Center studies basic, long-term, Technological Strategies innovative, and inter-business themes, while the The AGC Group formulates a Technology Roadmap Production Technology Center and Engineering Center based on its Technology Outlook, which covers global undertake the development of innovative production trends in various areas such as energy, resources and technologies and equipment technologies. population from a long-term perspective, and uses the The R&D Centers of each In-house Company comprehensive outlook along with the Group’ s mid- to enhance production technologies and undertake product long-term business strategies to set the direction of the development in close contact with customers. Group’s global technological strategies. In 2012, the AGC Group newly established the Technology General Division that integrates the Research Center, Production Technology Center, Engineering Center and Intellectual Property Center and newly- established Technology Planning Office, which formulates group-wide technological strategies, to carry out the Group’ s comprehensive technology-related strategies in a more effective and efficient manner. AGC Group Technology Outlook and Technology Roadmap Various trends AGC’s 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 Technology strategy Fundamental/Basic Technology Product Development Technology Production Technology Improvement R&D Structure Technology Planning Office (develops and promotes technological strategy) Research Center (materials development) Technology General Division Production Technology Center (develops production-related technologies) Engineering Center (develops engineering technologies) Intellectual Property Center (formulates and implements intellectual- property-related strategies) n o i t a r o b a l l o C Glass Company R&D Division Electronics Company R&D Division Chemicals Company R&D Division AGC Ceramics R&D Division Research & Development Since its foundation, the AGC Group has developed its core technologies centered on the areas of glass, chemicals and ceramics. In an effort to build the foundations for growth set forth in , the AGC Group examines global trends with a long-term perspective, sets a clear direction for technological strategies, and strives for the sophistication, integration and application of its core technologies. Building Foundations for Growth through the Sophistication, Integration and Application of the Group’s Core Technologies The AGC Group’ s core technologies are centered on technologies” that form the basis for these technologies. “glass materials and glass manufacturing technologies,” Through the sophistication, integration and applica- “coating technologies,” “optics and electronics technologies,” tion of our core technologies, the Group works on techno- “ceramics material technologies” and “ﬂuorine and other logical development to build foundations for growth set chemistry technologies,” as well as “fundamental common forth in the Group’s management policy, . Core Technologies of the AGC Group and Foundations for Growth Set forth in Glass materials and glass manufacturing technologies • Glass materials design • Glass manufacturing • Glass forming and processing Core Technologies Optics and electronics technologies • Liquid crystal materials • Fine pattering • Assembly • Optical design Fluorine and other chemistry technologies • Fluorine chemistry • Electrochemistry • Inorganic materials • Nanomaterials Coating technologies • Dry coating • Wet coating • Patterning Ceramics materials technologies • Refractory lining • Fine ceramics Fundamental common technologies • Engineering • Sensing • Evaluation and analysis • Simulation Glass-technology-driven Company Enhancing Manufacturing Technologies to Make Progress in New Product Development Ultra-Thin Glass The AGC Group has success- fully developed ultra-thin glass using the ﬂoat process. This ultra-thin glass is the world’ s thinnest ﬂoat glass with a thickness of only 0.1 millimeters. (See page 31) Dragontrail™ Specialty Glass for Chemical Strengthening The AGC Group has devel- oped this specialty glass for chemical strengthening that dramatically increases the strength, scratch resistance, and texture quality of cover glass for smartphones and other displays. (See page 19) Delivering Technology Solutions for Environmental and Energy Issues Developing Production Processes and Environmentally Friendly Products Hot-oxy Combustion With oxygen as the sole fuel used, NOx emissions are d e c r e a s e d a n d e n e r g y efﬁciency is increased. Oxygen heated by heat exchange Energy efﬁciency improved Oxygen Exhaust gas In-flight Melting By injecting granular materi- als into plasma combustion ﬂames, energy and CO 2 emissions can be reduced by half during the glass melting stage. Glass melted Glass melting furnace Injection of granular materials Oxygen burner Plasma torch Plasma Melting of granular materials Melting tank High-speed reﬁning To forming process Carrying out Seamless Operations Ranging from Basic Research to Product Development In R&D, the Research Center studies basic, long-term, innovative, and inter-business themes, while the Production Technology Center and Engineering Center undertake the development of innovative production technologies and equipment technologies. The R&D Centers of each In-house Company enhance production technologies and undertake product development in close contact with customers. In 2012, the AGC Group newly established the Technology General Division that integrates the Research Center, Production Technology Center, Engineering Center and Intellectual Property Center and newly- established Technology Planning Ofﬁce, which formulates group-wide technological strategies, to carry out the Group’ s comprehensive technology-related strategies in a more effective and efﬁcient manner. Technology Outlook and Technology Roadmap, which Deﬁne the Direction of the Group’s Technological Strategies The AGC Group formulates a Technology Roadmap based on its Technology Outlook, which covers global trends in various areas such as energy, resources and population from a long-term perspective, and uses the comprehensive outlook along with the Group’ s mid- to long-term business strategies to set the direction of the Group’s global technological strategies. AGC Group Technology Outlook and Technology Roadmap Various trends AGC’s 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 Technology strategy R&D Structure Fundamental/Basic Technology Product Development Technology Production Technology Improvement Technology Planning Ofﬁce (develops and promotes technological strategy) Research Center (materials development) Technology General Division Production Technology Center (develops production-related technologies) Engineering Center (develops engineering technologies) Intellectual Property Center (formulates and implements intellectual- property-related strategies) n o i t a r o b a l l o C Glass Company R&D Division Electronics Company R&D Division Chemicals Company R&D Division AGC Ceramics R&D Division 63 AGC Report 2012 AGC Report 2012 64 SouthAmericaAsiaJapanNorth AmericaEuropeAsahi Glass Co., Ltd.The AGC Group is expanding its global business by leveraging its extensive networks of companies operating in some 30 countries and regions in Japan, Asia, Europe and North America. 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 JapanIWAKI Houseware Co., Ltd.Ise Chemicals CorporationKeiyo 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., LtdHokkaido Soda Co., Ltd.AGC Ceramics Co., Ltd.Japan Plibrico Industries 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.ThailandAGC 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 Matex (Thailand) Co., Ltd.AGC Technology Solutions (Thailand) Co., Ltd.IndonesiaPT Asahimas Flat Glass, TbkPT IWAKI Glass IndonesiaPT Asahimas ChemicalAGC Technology Solutions (Indonesia) Co., Ltd.SingaporeAGC Flat Glass Asia Paciﬁc Pte. Ltd.AGC Electronics Singapore Pte. Ltd.AGC Chemicals Asia Paciﬁc Pte. Ltd.AGC Singapore Services Pte. Ltd.MalaysiaAGC Flat Glass (Malaysia) Sdn. Bhd.MCIS Safety Glass Sdn. Bhd.The PhilippinesAGC Flat Glass Philippines, Inc.AGC Automotive Philippines, Inc.TaiwanAGC Display Glass Taiwan Co., Ltd.AGC Electronics Taiwan Co., Ltd.IndiaAsahi India Glass Co., Ltd.ChinaAGC 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 Display Glass (Shenzhen) Co., Ltd.AGC Chemicals Trading (Shanghai) Co., Ltd.Zibo Asahi Glass Alumina Materials Co., Ltd.Yixing AGC Ceramics 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.KoreaKorea Autoglass CorporationHanwook Techno Glass Co., Ltd.Asahi Glass Fine Techno Korea Co., Ltd.Asahi PD Glass Korea Co., Ltd.AGC Display Glass Ochang Co., Ltd.The United StatesAGC Glass Company North AmericaAGC Soda CorporationAGC Automotive Americas Co.AGC Automotive Americas R&D, Inc.AGC Electronics America, Inc.AGC Chemicals Americas, Inc.Woodward Iodine CorporationAGC America, Inc.AGC Capital, Inc.CanadaAGC Flat Glass North America Ltd.AGC Automotive Canada, Inc.MexicoAGC Automotive Glass Mexico, S.A. de C.V.BelgiumAGC Glass Europe S.AAGC Glass Europe Sales S.AAGC Automotive Europe S.A.AGC Automotive Belgium S.A.AGC Europe S.A.The NetherlandsAGC Flat Glass Nederland B.V.The United KingdomAGC Glass UK Ltd.AGC Chemicals Europe, Ltd.Czech RepublicAGC Flat Glass Czech a.s., clen AGC GroupAGC Automotive Czech a.s.RussiaOJSC AGC Bor GlassworksAGC Flat Glass Klin LLCFranceAGC France SASItalyAGC Flat Glass Italia S.r.lAGC Automotive Italia S.r.lSpainAGC Flat Glass Iberica S.A.GermanyAGC Glass Germany GmbHHungaryAGC Glass Hungary LtdPolandAGC Gdansk Sp. z o.o.TurkeyAGC Otomotiv Adapazari Üretim, Sanayi Ve Ticaret Anonim SirketiGlassElectronicsChemicalsCeramicsOthersNorth AmericaEuropeJapanAsahi Glass Co., Ltd.NoteAs of end of March 2012, including equity method affiliates, etc., not using the “AGC” brand name.AsiaSouth AmericaGlobal NetworkBrazilAGC Glass Brazil, Inc.AGC Report 2012 65AGC Report 2012 66SouthAmericaAsiaJapanNorth AmericaEuropeAsahi Glass Co., Ltd.The AGC Group is expanding its global business by leveraging its extensive networks of companies operating in some 30 countries and regions in Japan, Asia, Europe and North America. 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 JapanIWAKI Houseware Co., Ltd.Ise Chemicals CorporationKeiyo 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., LtdHokkaido Soda Co., Ltd.AGC Ceramics Co., Ltd.Japan Plibrico Industries 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.ThailandAGC 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 Matex (Thailand) Co., Ltd.AGC Technology Solutions (Thailand) Co., Ltd.IndonesiaPT Asahimas Flat Glass, TbkPT IWAKI Glass IndonesiaPT Asahimas ChemicalAGC Technology Solutions (Indonesia) Co., Ltd.SingaporeAGC Flat Glass Asia Paciﬁc Pte. Ltd.AGC Electronics Singapore Pte. Ltd.AGC Chemicals Asia Paciﬁc Pte. Ltd.AGC Singapore Services Pte. Ltd.MalaysiaAGC Flat Glass (Malaysia) Sdn. Bhd.MCIS Safety Glass Sdn. Bhd.The PhilippinesAGC Flat Glass Philippines, Inc.AGC Automotive Philippines, Inc.TaiwanAGC Display Glass Taiwan Co., Ltd.AGC Electronics Taiwan Co., Ltd.IndiaAsahi India Glass Co., Ltd.ChinaAGC 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 Display Glass (Shenzhen) Co., Ltd.AGC Chemicals Trading (Shanghai) Co., Ltd.Zibo Asahi Glass Alumina Materials Co., Ltd.Yixing AGC Ceramics 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.KoreaKorea Autoglass CorporationHanwook Techno Glass Co., Ltd.Asahi Glass Fine Techno Korea Co., Ltd.Asahi PD Glass Korea Co., Ltd.AGC Display Glass Ochang Co., Ltd.The United StatesAGC Glass Company North AmericaAGC Soda CorporationAGC Automotive Americas Co.AGC Automotive Americas R&D, Inc.AGC Electronics America, Inc.AGC Chemicals Americas, Inc.Woodward Iodine CorporationAGC America, Inc.AGC Capital, Inc.CanadaAGC Flat Glass North America Ltd.AGC Automotive Canada, Inc.MexicoAGC Automotive Glass Mexico, S.A. de C.V.BelgiumAGC Glass Europe S.AAGC Glass Europe Sales S.AAGC Automotive Europe S.A.AGC Automotive Belgium S.A.AGC Europe S.A.The NetherlandsAGC Flat Glass Nederland B.V.The United KingdomAGC Glass UK Ltd.AGC Chemicals Europe, Ltd.Czech RepublicAGC Flat Glass Czech a.s., clen AGC GroupAGC Automotive Czech a.s.RussiaOJSC AGC Bor GlassworksAGC Flat Glass Klin LLCFranceAGC France SASItalyAGC Flat Glass Italia S.r.lAGC Automotive Italia S.r.lSpainAGC Flat Glass Iberica S.A.GermanyAGC Glass Germany GmbHHungaryAGC Glass Hungary LtdPolandAGC Gdansk Sp. z o.o.TurkeyAGC Otomotiv Adapazari Üretim, Sanayi Ve Ticaret Anonim SirketiGlassElectronicsChemicalsCeramicsOthersNorth AmericaEuropeJapanAsahi Glass Co., Ltd.NoteAs of end of March 2012, including equity method affiliates, etc., not using the “AGC” brand name.AsiaSouth AmericaGlobal NetworkBrazilAGC Glass Brazil, Inc.AGC Report 2012 65AGC Report 2012 66Board of Directors, Corporate Auditors and Executive Ofﬁcers Milestones Board of Directors Kazuhiko Ishimura Representative Director President & CEO Yuji Nishimi Representative Director Senior Executive Vice President Katsuhisa Kato Representative Director Executive Vice President Takashi Fujino Director Senior Executive Ofﬁcer Kunihiro Matsuo Director (Outside) [Attorney At Law, Kunihiro Matsuo Law Ofﬁce] Hajime Sawabe Director (Outside) [Representative Director, Chairman, TDK Corporation] Masahiro Sakane Director (Outside) [Chairman of the Board, Komatsu Ltd.] Executive Ofﬁcers Corporate President & CEO Kazuhiko Ishimura CEO Senior Executive Vice Presidents Yuji Nishimi Overall business management (AGC Group improvement activities, electronics business and business development) Akio Endo President of Glass Company Executive Vice Presidents Katsuhisa Kato Overall business management (Technology); GM of Technology General Division Kei Yonamoto Brazil Global Project Team Leader Senior Executive Ofﬁcers Shukichi Umemoto GM of Finance & Control Ofﬁce Marehisa Ishiko Regional President of North America, Glass Company Shinichi Kawakami GM of Human Resources & Administration Ofﬁce 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 Overall business management (Finance); GM of Ofﬁce of the President Masayuki Kamiya Chief Representative of AGC Group for China Executive Ofﬁcers Tadayuki Oi GM of Production Technology Center, Technology General Division Takuya Shimamura President of Chemicals Company 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 Ofﬁce Akinobu Shimao President of AGC Ceramics Co., Ltd. Tomoya Takigawa GM of Research Center, Technology General Division Yasumasa Nakao Vice President, Technology, Glass Company Takashi Shimbo President Director of AGC (China) Holdings Co., Ltd. Shinji Miyaji Group Leader of Corporate Planning Group, Ofﬁce of the President Kimikazu Ichikawa Regional President of Japan/Asia Paciﬁc, Glass Company Yoshinori Kobayashi GM of Electronics General Div., Electronics Company Kazuyoshi Watanabe GM of Technology Development General Div., Electronics Company Yoshinori Hirai GM of Business Development Ofﬁce Kihachiro Okamoto Vice President, Automotive, Glass Company Shigekuni Inoue GM of Electronic Glass General Div., Electronics Company Corporate Auditors Takashi Terashima Izumi Tamai (Outside) Shigeru Hikuma (Outside) Kenji Haga (Outside) As of March 29, 2012 History of AGC Group Products & Technologies of AGC Group 2002 – Toward Global Management 2010 • New medium-term management plan started. “ -2012” 2008 • Management policy introduced. 2007 • Group brand uniﬁed as “AGC.” • Asahi Glass Company’s 100th anniversary celebrated. 2004 • “JIKKO” management policy introduced. 2002 • Glaverbel made into a wholly owned subsidiary. • AGC Group Vision formulated. • Global In-house Company System introduced. 1992 • 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. 1981 • Belgian glassmaker Glaverbel S.A. acquired. (photo ) 1 1950 – 2001 Era of Growth and Expansion 1956 • Manufacture of automotive glass begun. (photo ) 2 • The Indo-Asahi Glass Co., Ltd. established in India. 1954 • Asahi Glass entered the Cathode Ray Tube (CRT) glass bulb business. (photo ) 3 1907 – 1949 The Early Years 1933 • Caustic soda production using lime process begun. 1925 • Shoko Glass Co., Ltd. established in China. (photo ) 4 1916 • Production of refractories begun at the Amagasaki Plant. 1907 • Asahi Glass Company founded in Amagasaki, Hyogo Prefecture. (photo ) 5 2011 • “Dragontrail™” glass for chemical strengthening launched. (photo ) 6 • Development of 0.1-millimeter-thick “ultra-thin glass”—the world’s thinnest—using the ﬂoat method. (photo ) 7 • “UV Verre Premium™” glass for automotive door windows introduced. 2010 • Sales of “FONTEX™”, a commercial plastic optical ﬁber enabling the world’s highest transmission speed, launched. 2006 • “Fluon® ETFE Film” selected for the main stadium and the venue for aquatics games at a global sport event in Beijing. 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. 1980 • AZEC System of caustic soda manufacturing using ion-exchange membrane developed. 1 1975 • Production of “Asahi Guard™” ﬂuorinated water and oil repellents and “Aﬂon™COP” ﬂuorinated resins begun. • Ion-exchange membrane method for manufacturing caustic soda developed. 1966 • Production of ﬂoat glass begun. (photo ) 8 1961 • Asahi Glass diversiﬁed into organic chemicals, propylene oxide and propylene glycol production started. 1954 • Production of double-glazing units (Pairglass™) begun. 1938 • Production of tempered glass and laminated glass begun. 1928 • Production of ordinary sheet glass using the Fourcault process begun. 1917 • First production of soda ash using the ammonium method in Japan. 1909 • Production of Belgian-type hand-blown sheet glass (photo ) 9 • The ﬁrst sheet glass successfully manufactured in Japan, begun. 2 3 4 5 6 7 8 9 67 AGC Report 2012 AGC Report 2012 68 Reporting and Editorial Policy Board of Directors, Corporate Auditors and Executive Ofﬁcers Contents Milestones Board of Directors In this report, the AGC Group clearly communicates its growth strategy to stakeholders, in accordance with its corporate mission to “Look Beyond” to make the world a brighter place. From this fiscal year onward, the AGC Group will combine its AGC This report has been compiled in two chapters. Report (company and business information) and CSR Report. In this report, the Group aims to clearly communicate to stakeholders its In Chapter 1 “Business Overview,” the report presents business growth strategy of effectively advancing its business initiatives and summaries and strategies, as well as key achievements in the CSR goals as an integrated whole under the corporate mission to Group’s three major businesses—glass, electronics and chemicals. Kazuhiko Ishimura Representative Director “Look Beyond” to make the world a brighter place, as outlined in Representative Director Yuji Nishimi Katsuhisa Kato Representative Director Takashi Fujino Director the Group Vision. President & CEO Senior Executive Vice President In Chapter 2 “Responsibilities to Our Stakeholders,” the report Executive Vice President Senior Executive Ofﬁcer The AGC Group hopes to give its stakeholders a comprehen- discusses the social responsibilities fulfilled by the AGC Group, sive understanding of the various initiatives it promotes as a busi- based on the core themes cited in ISO 26000. ness that contributes to sustainable society. An Array of Tools Helps the Group Deepen its Communication with Stakeholders Financial Information Tools Non-Financial Information Tools For Understanding AGC Group’s Growth Strategy Hajime Sawabe Director (Outside) [Representative Director, Chairman, TDK Corporation] Kunihiro Matsuo Director (Outside) [Attorney At Law, Kunihiro Matsuo Law Ofﬁce] Financial Review (PDF file only) Masahiro Sakane Director (Outside) [Chairman of the Board, Komatsu Ltd.] CSR Website www.agc.com/english/csr/ CSR Information Supplement (PDF file only) Executive Ofﬁcers Corporate Repor ts the AGC Group’ s business outline and financial AGC Report 2012 (This report) information including a con- President & CEO solidated financial statement Kazuhiko Ishimura Marehisa Ishiko Regional President of North America, Glass Company Shinichi Kawakami AGC Group GM of Human Resources & Administration Ofﬁce Introducing social responsi- Extracted and compiled based Corporate Auditors bilities shouldered by the on policies and promotional Shinji Miyaji measures related to non-financial data and CSR activities Takashi Terashima Group Leader of Corporate Planning Group, Ofﬁce of the President CEO Yoshiaki Tamura President of Electronics Takuya Shimamura AGC Group Website President of Chemicals Kimikazu Ichikawa (Outside) Izumi Tamai (Outside) Shigeru Hikuma Kenji Haga (Outside) Senior Executive Vice Presidents For Comprehensive Information Company; Yuji Nishimi Overall business management (AGC Group improvement activities, electronics business and business development) Akio Endo Scope of Report President of Glass Company Reporting Period Executive Vice Fiscal 2011 (Jan.–Dec. 2011) GM of Display General Div., Electronics Company Jean-François Heris Regional President of Europe, Glass Company; President & CEO of AGC Glass Europe Takashi Fujino Overall business management (Finance); GM of Ofﬁce of the President Presidents Some information includes content from both fiscal 2010 and 2012. Masayuki Kamiya Katsuhisa Kato Organizations Covered in the Report Overall business management Chief Representative of AGC Group for China nies) in and outside Japan General Division Executive Ofﬁcers Primary Notation and Report Targets Used in the Report Kei Yonamoto Tadayuki Oi Brazil Global Project The AGC Group Team Leader The AGC Group (Japan) Senior Executive Ofﬁcers Same as “Organizations Covered in the GM of Production Technology Report” mentioned above Center, Technology General Division Group companies in Japan including Asahi Glass Co. Ltd. Yasumasa Nakao AGC Asahi Glass Co. Ltd. (on an Vice President, Technology, Asahi Glass/the Company Shukichi Umemoto Glass Company unconsolidated basis) GM of Finance & Control Ofﬁce The AGC Group (Asia) Group companies in Asia excluding the AGC Group (Japan) http://www.agc-group.com/en/ Company Regional President of Communicating information about the AGC Group more Japan/Asia Paciﬁc, Glass Tetsuo Tatsuno widely, timely, and in more detail Vice President, Planning and Coordination, Glass Company Company Eisuke Yanagisawa GM of Legal Yoshinori Kobayashi GM of Electronics General Div., Electronics Company Kazuyoshi Watanabe Hiroshi Akagi Non-Financial Information Guidelines GM of Technology GM of Business Management General Div., Chemicals • ISO 26000: 2010 Guidance on social responsibility Electronics Company Development General Div., Company • Sustainable Reporting Guidelines Version 3.1 (G3.1), Global Yoshinori Hirai Tokio Matsuo Reporting Initiative (GRI) GM of Business Development GM of CSR Ofﬁce Ofﬁce President of AGC Ceramics Co., Ltd. Date of Publication Tomoya Takigawa GM of Research Center, June 2012 Kihachiro Okamoto Vice President, Automotive, Glass Company Shigekuni Inoue GM of Electronic Glass General Technology General Division Last date of publication: AGC Report: June 2011 CSR Report: July 2011 Div., Electronics Company Takashi Shimbo President Director of AGC Regarding Future Assumptions, Forecasts and Plans (China) Holdings Co., Ltd. Future perspectives described in this report are based on the latest information available to the AGC Group at the time of editing this report. Nevertheless, please note that results and consequences may vary with fluctuations in the business environment. As of March 29, 2012 Asahi Glass and its 179 consolidated subsidiaries (Group compa- (Technology); GM of Technology Akinobu Shimao the Environment • Environmental Reporting Guidelines (2012), Japanese Ministry of 1 67 AGC Report 2012 AGC Report 2012 AKT_1206-0362_ 旭硝子 CSR 英文表紙 _ ウラ _12/06/20　SK 1 3 4 5 7 9 13 15 Reporting and Editorial Policy/Contents History of AGC Group Overview of the AGC Group Our Vision and Shared Values Financial and Non-Financial Highlights – 2002 CEO Message We Will Continue to Develop the AGC Group 2010 • New medium-term management plan with the Goal to be an Outstanding Global “ -2012” started. Toward Enterprise that is Highly Profitable, Global Fast-Growing and Contributes to the Management Realization of a Sustainable Society anniversary celebrated. 2007 • Group brand uniﬁed as “AGC.” • Asahi Glass Company’s 100th 2008 • Management policy introduced. CEO Interview Concerning the Medium-Term Management Plan “ -2012” 2004 • “JIKKO” management policy introduced. 2002 • Glaverbel made into a wholly owned subsidiary. • AGC Group Vision formulated. • Global In-house Company System introduced. Dialogue Conversation with the Winners of the Blue Planet Prize 23 25 29 33 37 38 Products & Technologies of AGC Group Chapter 1 2011 • “Dragontrail™” glass for chemical Business Overview strengthening launched. (photo ) 6 • Development of 0.1-millimeter-thick “ultra-thin glass”—the world’s Glass Operations thinnest—using the ﬂoat method. (photo ) 7 Electronics Operations • “UV Verre Premium™” glass for Chemicals Operations automotive door windows introduced. Ceramics/Other Operations 2010 • Sales of “FONTEX™”, a The AGC Group and Clean Energy commercial plastic optical ﬁber enabling the world’s highest transmission speed, launched. 6 7 2006 • “Fluon® ETFE Film” selected for the main stadium and the venue for aquatics games at a global sport event in Beijing. Looking to the Future of the Global Environment Aiming to Create a Sustainable Society 1992 • 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. 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. 1981 • Belgian glassmaker Glaverbel S.A. acquired. (photo ) 1 1950 – 2001 Feature 1 Contributing to Sustainable Development with Era of Growth and Expansion The Brazil Project 19 Feature 2 1956 • Manufacture of automotive glass begun. (photo ) 2 Driving the Evolution of Smartphones and Tablet PCs • The Indo-Asahi Glass Co., Ltd. established in India. The Future is Now with 1954 • Asahi Glass entered the Cathode Ray Tube (CRT) glass bulb business. (photo ) 3 ™ 1907 – 1949 The Early Years 1933 • Caustic soda production using lime process begun. 1925 • Shoko Glass Co., Ltd. established in China. (photo ) 4 1916 • Production of refractories begun at the Amagasaki Plant. 1907 • Asahi Glass Company founded in Amagasaki, Hyogo Prefecture. (photo ) 5 1 41 43 2 47 52 57 59 62 3 63 65 67 4 68 5 39 Chapter 2 1980 • AZEC System of caustic soda manufacturing using ion-exchange membrane developed. Responsibilities to Our Stakeholders 1975 • Production of “Asahi Guard™” ﬂuorinated water and oil repellents and “Aﬂon™COP” ﬂuorinated resins begun. • Ion-exchange membrane method for manufacturing caustic soda developed. Targets and Results 1966 • Production of ﬂoat glass begun. (photo ) 8 Organizational Governance Human Rights and Labor Practices 1961 • Asahi Glass diversiﬁed into The Environment organic chemicals, propylene oxide and propylene glycol production started. Fair Operating Practices and Consumer Issues 8 Community Involvement and Development 1954 • Production of double-glazing units (Pairglass™) begun. CSR Web Site Access 1938 • Production of tempered glass and laminated glass begun. Research & Development 1928 • Production of ordinary sheet glass using the Fourcault Global Network process begun. 1917 • First production of soda ash using the ammonium Board of Directors, Corporate Auditors and Executive Officers method in Japan. Milestones 1909 • Production of Belgian-type hand-blown sheet glass (photo ) 9 • The ﬁrst sheet glass successfully manufactured in Japan, begun. 9 AGC Report 2012 2 AGC Report 2012 68 A G C R e p o r t 2 0 1 2 AGC Report 2012 AGC Report 2012 URL: http://www.agc-group.com/en/ URL: http://www.agc-group.com/en/ 1-5-1, Marunouchi, Chiyoda-ku, Tokyo 100-8405, JAPAN 1-5-1, Marunouchi, Chiyoda-ku, Tokyo 100-8405, JAPAN Corporate Communications & Investor Relations Office Tel: +81-3-3218-5603 Fax: +81-3-3218-5390 E-mail: info.ad@agc.com Corporate Communications & Investor Relations Office Tel: +81-3-3218-5603 Fax: +81-3-3218-5390 E-mail: info.ad@agc.com CSR Office Tel: +81-3-3218-5282 Fax: +81-3-3218-7801 E-mail: csr-info@agc.com CSR Office Tel: +81-3-3218-5282 Fax: +81-3-3218-7801 E-mail: csr-info@agc.com Published in June 2012 (Next report scheduled to be published in June 2013) Published in June 2012 (Next report scheduled to be published in June 2013) Printed on paper made with wood Printed on paper made with wood from forest thinning. “Morino from forest thinning. “Morino Chonai-Kai” (Forest Neighborhood Chonai-Kai” (Forest Neighborhood Association)—Supporting sound Association)—Supporting sound forest management. forest management. All rights reserved. © 2012, Asahi Glass Co., Ltd. All rights reserved. © 2012, Asahi Glass Co., Ltd. AKT_1206-0362_ 旭硝子 CSR 英文表紙 _ おもて _12/06/20　SK

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