Asahi Glass Co. Ltd. Annual Report 2016

Plain-text annual report

AGC Report 2016 AGC, an Everyday Essential Part of Our World AGC’s unique materials and solutions make people’s lives better around the world every day 1 AGC Report 2016 AGC Group Vision ® is the AGC Group’s corporate philosophy on which all the activities of the Group are founded. The following thoughts are expressed in . We will continue to Anticipate and envision the future, Have perspectives beyond our own ﬁelds of expertise, Pursue innovations, not becoming complacent with the status quo. We will continue to create value worldwide, demonstrating the vast potential of the Group’s entire organization. Structure and elements of Our Mission “Our Mission” expresses the value that the Group should offer to the world, and represents the reason why the AGC Group exists. Our Shared Values “Our Shared Values” expresses the key ideas that all AGC Group members must share as the basis for every action we take. Our Spirit This founding spirit is precisely the ‘AGC spirit’ that has been handed down from generation to generation and shared by all Group members. Our Mission AGC, an everyday essential part of our world —AGC’s unique materials and solutions make people’s lives better around the world every day— We, the AGC Group, aim to continue being the “ﬁrst choice” solution provider for our customers by building long-term trusted relationships with them through unique materials and solutions developed using our wide-ranging material and production technologies. We will continue offering products and solutions that customers and society need, thereby making people’s lives better around the world every day. Our Shared Values Innovation & Operational excellence • We will continuously seek innovations in the technology, products and services we provide by thinking beyond conventional ideas and frameworks. • We will continuously create new value which satisﬁes the needs of our potential and future customers by thinking from the customer’s perspective and accurately forecasting the changes in society and markets. • We will continuously improve our operations for maximum efﬁciency and quality in every activity and will strive for the highest possible standard of performance. Diversity Environment Integrity • We will respect individuals with different capabilities and personalities, and our global management will operate without regard to nationality, gender or background. • We will respect cultural diversity regardless of race, ethnicity, religion, language, and nationality. • We will respect different perspectives and opinions at all times. Our Spirit • We, as good global citizens, will contribute to the creation of a sustain- able society in harmony with nature. • We will strive to ensure and further improve occupational health and safety in our working environment. • We will build open and fair relationships with all of our stakeholders based on the highest ethical standards. • We will strictly comply with applicable laws and regulations. • We will fulﬁll our responsibilities in relation to all the products and services we provide to achieve customer satisfaction and trust. “Never take the easy way out, but confront difﬁculties.” The founding spirit of Toshiya Iwasaki, who established Asahi Glass Company in 1907. AGC Report 2016 2 Message from the President and CEO Takuya Shimamura Representative Director, President and Chief Executive Ofﬁcer The AGC Group’s history began more than a century ago, when Asahi Glass Company took on the challenge of manufacturing the first flat glass in Japan, with a view to contribute to people’s lives and the country’s industrial development. Since that time, the Group has built up expertise and technologies in the fields of glass, electron- ics, chemicals and ceramics, while providing solutions to a wide range of industries, including the building materials, automotive and electronics industries. After the launch of its business operations in India in the 1950s, the Group expanded its business throughout Asia, Europe and North and South America, and its employees around the world have been striving for the development of local economy and society in each region. The basics of our business is to contribute to society through our unique materials and solutions developed using the Group’s expertise and technologies. Today, amid a major shift in our business environment, we will keep the basics of our business in our minds and contin- ue to create value, with all employees and management working as one team. To this end, we established the 3 AGC Report 2016 Through Diverse Technologies, the AGC Group Offers Solutions that Contribute to People’s Lives Worldwide. “Vision 2025” in February 2016. It clarifies our aspirations and vision for the Group in the next 10 years, and lays out the management strategies for realizing them. As we strive to achieve our “Vision 2025” goal of becoming a highly profitable, leading global material and solution provider, we will continue innovating and offering new solutions that are indispensable for society. Moreover, we remain strongly committed to the sustainable development of countries worldwide with the hope of ensuring a bright future for our planet. The AGC Group will continue making positive contributions moving forward to meet the expecta- tions of our stakeholders around the world. Takuya Shimamura Representative Director, President and Chief Executive Ofﬁcer AGC Report 2016 4 Long-term Strategy The AGC Group is Realizing Vision 2025 by Enhancing Core Businesses and Expanding Strategic Businesses. In February 2016, the AGC Group established Vision 2025, alongside a long-term management strategy for realizing its goals. Under the strategy, the Group has designated its glass, chemicals, display glass and ceramics businesses as Core Businesses for ensuring stable sources of earnings over the long term. By designating its mobility, electronics and life science businesses as Strategic Businesses, it will aim for high growth in targeted markets. Both of these business categories will serve as twin pillars for achieving Vision 2025. Based on the principle of always meeting customers’ expectations and continuing to earn their trust, the AGC Group is pursuing strategic mergers, acquisitions and other investments aimed at generating value and growth, while working to allocate operational resources with an emphasis on asset efficiency. Looking ahead, the AGC Group will continue offering value to customers and society as it aims to be a highly profitable, leading global material and solution provider. “Vision 2025” By 2025, the AGC Group’s Core Businesses will serve as solid sources of earnings, and Strategic Businesses will become growth drivers and lead further earnings growth. In 2025, the AGC Group will continue being a highly profitable, leading global material and solution provider. Core Strategy 1 Core businesses Core Strategy 2 Strategic businesses Establishing long-term, stable sources of earnings through the portfolio management Establishing highly profitable businesses through expansion of high value-added businesses Architectural glass Automotive glass (existing) Display glass Mobility Electronics Life science Essential chemicals Performance chemicals Ceramics The AGC Group’s competitive advantages Wide-ranging customer base Varieties of material technologies in the field of glass, electronics, chemicals and ceramics Production technology development capability and operational excellence 5 AGC Report 2016 Core Strategy 1 Core businesses Practicing Comprehensive Portfolio Management The AGC Group now designates its architectural glass, automotive glass, chemicals and display glass businesses as Core Businesses. Through these businesses, the Group will establish long-term, stable sources of earnings while focusing on the effective allocation of resources based on its business portfolio. It will also carry out growth-oriented investments, including mergers and acquisitions. The AGC Group has established a strong presence in Thailand and Indonesia through its glass and chemicals businesses. By taking advantage of growth in Asia in partic- ular, this has created opportunity for business expansion from Southeast Asia to the Middle East (West Asia). Basic Strategies for Enhancing Core Businesses Business Basic strategy Architectural glass •Select and concentrate on high growth countries & countries that the Group has a competitive advantage •Innovative business models to enhance the asset efficiency Automotive glass (existing) Display glass Essential chemicals Performance chemicals Ceramics •Respond to needs for more advanced functions and performance amid the expansion of the Eco-friendly vehicles and automated driving systems •Further global expansion by M&A etc. •Optimize the allocation of production bases to respond to the demand shift in the LCD glass market •Cultivate markets for new display applications •Further strengthen the business foundation of Chlor-alkali business in Southeast Asia •Take advantage of the global demand increase in high performance materials for the growth of the fluorochemicals business •Deliver new value propositions with a mix of materials, engineering & services •Establish business bases in Southeast Asia and expand the global sales Growth Strategies in Asia Middle East (West Asia) The AGC Group’s business foundations in glass and chemicals extend across Asia from Southeast Asia to the Middle East (West Asia). Southeast Asia Main business locations Glass Chemicals AGC Report 2016 6 Long-term Strategy Core Strategy 2 Strategic businesses Expanding High Value-added Businesses Through its Strategic Businesses, the AGC Group is offering solutions with increased added value, targeting markets covering the three categories of mobility, electronics and the life science. The Group’s mobility business provides solutions that help integrate information and communication technol- ogy (ICT) in automobiles and construct innovative infrastruc- tures and new ecosystems for transportation. The electron- ics business supplies optical materials for digital cameras and signage-related products and technologies based on the vision of an Internet of Things (IoT) society, in which all types of products are interconnected via the Internet. Products in this business help further diversify input/output devices, as well as increase the speed of communications and the capacity of data storage media. Finally, the life science business provides products that facilitate advanced medical care and solutions for global food shortages. The AGC Group’s Solutions for Targeted Markets Changes in the social environment Targeted markets Changes in the market trends The AGC Group’s solutions Mobility •Integration of automobiles and ICT •Innovation of transportation ecosystem Advancing automotive ICT Innovation in transportation infrastructure New ecosystem in mobility Electronics •Diversiﬁcation of input/output devices •Greater speed of communication and increased capacity for data storage media Evolution of input devices Contribute to realizing a “Big Data” society Innovation in output devices Life science •Bipolarization of needs for advanced medical care and low-cost medical care •Food shortage/Greater awareness for food safety Supplying advanced medicinal technology High-quality and reliable pharmaceutical/ agrochemical intermediate Development of advanced medical technology •Evolution of transportation infrastructure •Everything can be connected •Anyone can be connected anytime •Aging society •Increase of global population •Greater safety, security, comfort 7 AGC Report 2016 Medium-term Strategy The AGC Group is Establishing the Basis for Long-term Growth with the Medium-term Management Plan, AGC plus-2017. By effectively allocating resources and carrying out strate- gies based on its business portfolio, which has been created based on the profitability and growth potential for each of the Group’s businesses, the AGC Group is aiming to achieve the management and financial targets set under the medium-term management plan, AGC plus-2017. Having positioned 2015 as a year for laying the ground- work for medium- and long-term growth, the AGC Group proactively invested in growth areas and regions for each of its businesses, including the construction of a power plant in Indonesia and the acquisition of an automotive replacement glass company in Poland. It also made steady changes to the balance of its business portfolio, improving overall perfor- mance by restructuring the architectural glass business in Americas and Europe. From 2016 through to 2017, the AGC Group plans to capitalize on its investment results over those two years in Indonesia, China, and other countries, while aiming for further growth by expanding new businesses and product lineups, including cover glass for vehicle interiors, new refrigerants for vehicle air conditioners and products for life science applications. Progress Under the Medium-term Management Plan, AGC plus-2017 2015 2016 2017 2025 Medium-term management plan, AGC plus-2017 Long-term management strategies for realization of the Vision 2025 Net sales (Billion yen) 1,326.3 Operating proﬁt (Billion yen) 71.2 2015 1,600.0 100 1,400.0 75.0 2016 (Forecast) 2017 (Target) Management targets for 2017 Net sales ¥1.6 trillion Operating proﬁt More than ¥100 billion ROE 5% or above Debt to equity ratio 0.5 or less Increase Low-E glass (Eco-glass) production capacity by 50% in Thailand Coating glass production starts in Saudi Arabia through a joint-venture with Obeikan Glass Enhanced float production for auto glass starts in Indonesia Glass Third automotive glass plant in China starts operation New plant in Mexico starts operation Acquired Poland-based NordGlass in order to bolster the automotive replacement glass business Increase polishing capacity in Shenzhen, China Electronics LCD float furnace relocated from Japan to China starts operation Start LGP glass business Increase chlor-alkali production capacity in Indonesia Increase PVC capacity by 50% in Vietnam Chemicals Plant for new-generation automotive refrigerant start operation Power generation plant starts operation in Indonesia Increase production capacity of pharmaceutical & agrochemical intermediates and active ingredients AGC Report 2016 8 Overview of the AGC Group The AGC Group Creates New Value in the Fields of Glass, Electronics, Chemicals and Ceramics. Business Segment (As of the end of December 2015) GLASS ELECTRONICS The AGC Group’s business extends into four fields: glass, electronics, chemicals and ceramics. Through more than a century of technological innovation, the Group has developed world-leading technologies and expertise through which it provides a diverse lineup of products for custom- ers across a wide range of industries. From architectural glass and automotive glass and extending to liquid crystal display glass and electronic materials—as well as high-function materials such as chemicals and ceramics—the AGC Group proposes new solutions from its unique perspective as a manufacturer of glass and other mate- rials. In order to further enrich society, the AGC Group is constantly pushing the limits in the creation of new standards of value. Sales Ratio1 Chemicals 24% Ceramics/ Other 2% 2015 Net Sales 1,326.3 billion yen CHEMICALS Electronics 22% Glass 52% Sales Trends (Billion yen) 1,348.3 1,320.0 1,326.3 CERAMICS/ OTHER 2013 2014 2015 (Year) Note Numeric data is based on International Financial Reporting Standards (IFRS). (Subject organizations: Asahi Glass Co., Ltd. and its consolidated subsidiaries / Target period: Each business year ending December 31) 1 Sales Ratio calculated from sales to external customers. 9 AGC Report 2016 Corporate Data (As of the end of December 2015) Company Name AGC Asahi Glass Founded September 8, 1907 Outstanding Stock 1,186,705,905 shares Registered Company Name ASAHI GLASS CO., LTD Head Ofﬁce 1-5-1, Marunouchi, Chiyoda-ku, Tokyo 100-8405 JAPAN Incorporated June 1, 1950 Capital 90,873 million yen Employees 50,852 (consolidated), 5,973 (non-consolidated) Consolidated Group Companies 204 (166 overseas) Sales Ratio1 Sales Trends2 (Billion yen) Main Businesses and Fields/Main Products 52% 22% 24% 2% 692.9 667.3 686.3 2013 2014 2015 (Year) 346.0 319.7 288.6 2013 2014 2015 (Year) 317.2 318.5 290.7 2013 2014 2015 (Year) 78.6 80.8 68.1 Architectural glass •Float glass •Low-emissivity (Low-E) glass •Double glazing glass for solar control/heat-insulation •Safety glass •Decorative glass Automotive glass •Tempered automotive glass •Laminated automotive glass Display •Glass substrates for TFT-LCDs Electronic materials •CMOS/CCD blue ﬁlter •CMP slurry •Synthetic quartz glass •Glass frit and paste •Glass molded lenses Applied glass materials •Cover glass for electronic devices •Thin glass for electronic devices •Glass for light guide plates •Glass for photovoltaic devices Chlor-alkali and urethane •Raw materials for vinyl chloride monomer and polymer •Caustic soda •Urethane materials Fluorochemicals and specialty chemicals •Fluoropolymers/ﬁlms •Fluorinated water and oil repellents •Pharmaceutical and agrochemical intermediates and active ingredients •Iodine-related products Ceramics •Refractory materials •Fine ceramics •Sputtering targets Logistics/Engineering 2 Sales by business were calculated before elimination, therefore the sum will not match company-wide sales when totaled. 2013 2014 2015 (Year) AGC Report 2016 10 Product Applications Glass substrates for display devices In a Wide Range of Places and Situations, the AGC Group’s Diverse Products Support a Safe, Pleasant and Sustainable Society. Glass materials and components for optical equipment Major Products Glass Electronics Chemicals Ceramics/Other Supporting Mobility Beginning with lightweight, high-function automotive glass, the AGC Group provides a wide range of products that are vital to transportation equipment. Fluoropolymer resin for coatings Glass substrates for display devices Glass materials and components for storage devices Architectural glass Bus glass Supporting Displays and Optical Equipment The AGC Group provides materials and components for electronic equipment used in a variety of business situations. Train platform screen doors Railway glass Truck glass Automotive glass Cover glass for console panels LED/OLED lighting components Urethane materials for car seats Fluoropolymer resins and rubber for automotive components Photovoltaic devices for buildings Glass for ofﬁce buildings Laminated safety glass for public facilities Supporting Construction and Social Infrastructure The AGC Group provides architectural materials that contribute to the creation of safe and pleasant spaces, and industrial materials that strengthen social infrastructure. Optical materials for digital cameras Glass substrates for display devices Cover glass for electronic devices Glass materials and components for optical equipment Glass substrates for display devices Cover glass for electronic devices Fluoropolymer resin for coatings Fluoropolymer resin for coatings Fluoropolymers for membrane structures (ﬁlms) Ceramic material for road surfaces (heat shielding/anti-skid) LED/OLED lighting components Glass integrated digital signage Show window glass Insulated glass doors for refrigerated and frozen showcases Low-E insulating glass for residential use 11 AGC Report 2016 AGC Report 2016 12 Ultra-lightweight photovoltaic module Cover glass for lightweight photovoltaic module Protective ﬂuoropolymer resin ﬁlm for photovoltaic devices Fuel cell-related materials Supporting the Environment The AGC Group provides components and technologies that contribute to the realization of smart cities and smart mobility. Sodium hypochlorite for tap water disinfectants Washstand mirrors Heat resistant glass Fluoropolymers resin for coatings Fluoroelastomer for petroleum extraction machinery (rubber) TCO substrates for photovoltaic devices Glass ﬁber-reinforced plastic for photovoltaic device frames Glass-ceramics substrates for high-power LED lighting Fuel cell-related materials Materials for lithium-ion battery Sodium bicarbonate (infusion solution for artiﬁcial dialysis) Active ingredients for eyedrops Fluoropolymers for horticultural use (greenhouse ﬁlm) Agrochemical active ingredients Bulking agent for liquid chromatography Caustic soda (for hand soap) Filler for cosmetic products Caustic soda (for dishwashing detergent) Sodium bicarbonate (baking powder) Supporting Consumer Products The AGC Group provides products that bring comfort and convenience to daily life and many of the materials vital to their creation. 13 AGC Report 2016 Supporting Life Science The AGC Group provides pharmaceuticals and agrochemicals used in the ﬁeld of life science, and materials for a wide variety of its related facilities. Biopharmaceutical active ingredients Lab use ware Tissue culture ware Prepared specimens for microscopes AGC Report 2016 14 Global Network The AGC Group’s Global Business is Built on Three Regional Pillars: Japan/Asia, Europe and the Americas. JAPAN ASIA Main Locations Glass Electronics Chemicals Ceramics/Other As economic globalization advances, the AGC Group’s business extends into over 30 countries and regions with the regional pillars in Japan/Asia, Europe and the Amer- icas. In its glass business, which has markets around the world, the Group has product development and manu- facturing bases in each of these three regions. In its electronics business, as its client businesses are concen- trated in East Asia, development and manufacturing bases are concentrated in Japan and other Asian coun- tries. In the chemicals business, the Group has been working on the enhancement of its manufacturing bases with a focus on Southeast Asia, where infrastructure development is progressing. Utilizing such a global network, the AGC Group strives to expand businesses and grow even deeper roots in local communities, while exploring opportunities to develop new business areas. Sales Ratio1 (As of the end of December 2015) The Americas 11% Europe 22% 2015 Net Sales 1,326.3 billion yen Japan/Asia 67% 15 AGC Report 2016 1 Sales Ratio calculated from sales to external customers. EUROPE THE AMERICAS Japan/Asia Europe The Americas Percentage of sales by region 67% Percentage of sales by region 22% Percentage of sales by region 11% Main Products Main Products Main Products Architectural glass Automotive glass Display glass Electronic materials Chemicals Ceramics Architectural glass Automotive glass Chemicals Architectural glass Automotive glass Electronic materials Chemicals Employees Approximately 30,600 Employees Approximately 16,200 Employees Approximately 4,100 AGC Report 2016 16 Business Overview GLASS The AGC Group provides diverse products and solutions as a leading architectural glass and automotive glass manufacturer. Architectural Glass Business The AGC Group’s architectural glass business supplies a wide range of products—such as float glass, fabricated glass, decorative glass and glass for photovoltaic devices—which are tailored to the needs of each region and client. The AGC Group is also committed to the development and sale of functional glass products that offer comfort and reduce environmental impact. For buildings, the AGC Group provides glass with solar control and heat insulation, and glass with anti-condensation and anti-reflective properties. The Group’s architectural glass business holds a world-leading market share. Market share rankings for main products (Based on ﬁscal 2015 estimates by AGC) Float glass Global No.1 Low emissivity (Low-E) insulating glass unit High solar control and heat insulation properties “ATTOCH™” Low-E glass for on-site retroﬁtting installation Ideal for remodeling buildings and stores “Clearsight™” anti-reﬂective glass Minimizing light reﬂections on the glass surface “Lacobel™” painted glass for indoor applications Outstanding coloring properties making interiors look brighter Coating glass Suitable for all climates “Sunjoule™” building integrated photovoltaic devices Glass with integrated photovoltaics 17 AGC Report 2016 Automotive Glass Business The AGC Group’s automotive glass business holds a world-leading market share in the sale of laminated glass and tempered glass. The Group makes use of its global market- ing functions, production networks and cutting-edge technologies to pursue greater product safety, design, comfort and environmental performance. It has a wide variety of products, including UV cut glass, infrared ray cut glass, water repellent glass for doors and glass antennas. Market share rankings for main products (Based on ﬁscal 2015 estimates by AGC) Automotive glass Global No.1 “Temperlite™” tempered automotive glass Several times the strength of general-purpose ﬂat glass “Lamisafe™” laminated automotive glass Designed with safety in mind, shatterproof even when broken “UV Verre Premium™” series for automotive glass A global ﬁrst!1 All-around 99% UV cut, providing safety and comfort in the vehicle 1 AGC survey as of November 2015 (when single-glazed glass is used for everything but the windshield) Light Control glass “WONDERLITE™” Contributing to improved in-car comfort and energy conservation Glass for railroads Outstanding weather resistance, sound insulation and heat insulation Architectural glass pursues superior design, improved comfort and reduced environmental impact AGC Report 2016 18 Business Overview ELECTRONICS The AGC Group will continue to offer high value-added products and solutions that support the evolution of the electronics industry. Display Business In its display business, the AGC Group holds a number-two global market share in glass substrates used for thin-film-transistor (TFT) liquid crystal displays (LCDs). The Group leverages its unique manufacturing methods and advanced production techniques to increase its global competitiveness, while focusing on developing materials for next-generation display devices. Market share rankings for main products (Based on ﬁscal 2015 estimates by AGC) Glass substrates for TFT-LCDs Global No.2 Applied Glass Materials Business With a view to offering new value in the marketplace, the AGC Group established its Applied Glass Materials General Division in January 2015 by integrating opera- tions that had previously been divided among its glass business and electronics business. The division is promoting the advantages of the Group’s “thin, light and strong” specialty glass in an effort to create new applications, while broadening the Group’s product lineup, which includes cover glass for smartphones and tablet devices, and glass substrates for photovoltaic devices and touch panels. Glass substrates for TFT-LCDs Key materials for LCD displays “Leoﬂex™” chemically strengthened specialty glass Used for various applications in architecture, solar cells and more “Dragontrail™ X” specialty glass for chemical strengthening Cover glass for electronic devices Glass substrates for touch panels The world’s thinnest electronic device glass TCO substrates for photovoltaic devices Improving the power generating efﬁciency of thin ﬁlm silicon photovoltaic devices “XCV™” glass for light guide plates Enabling liquid crystal displays to be made thinner 19 AGC Report 2016 Electronic Materials Business In its electronic materials business, the AGC Group contrib- utes to the most advanced sectors of the electronics indus- try by applying the leading-edge technologies it has fostered in its glass, chemicals, and ceramics businesses, including material, processing, surface treatment and molding technologies. The business supplies a wide lineup of products, such as synthetic quartz glass—a product boasting a world-leading market share—as well as high-pu- rity silicon carbide (SiC) jigs and other semiconductor man- ufacturing components, CMOS/CCD blue filters and other optical materials for smartphones and digital cameras, and glass frit and paste display materials for electrical insulation and sealing. Market share rankings for main products (Based on ﬁscal 2015 estimates by AGC) Quartz materials for stepper lenses Global No.1 CMOS/CCD blue ﬁlter Enabling image sensors to match the luminosity of the human eye Synthetic quartz glass Ensuring high quality in semiconductor processing Chemical mechanical polishing (CMP) slurry and polishing solutions Enabling multi-layered components to be made extremely ﬂat and even Glass frit Used for electrical insulation, airtight seals, and other applications in various industries “Roiceram™-HS” high-purity SiC jigs Used for heat treatment and other semiconductor processes Glass substrates for TFT-LCDs contribute to innovations in image display technology AGC Report 2016 20 Business Overview CHEMICALS The AGC Group’s products and solutions help create an afﬂuent, safe and secure society while promoting environmental conservation. Chemicals Business The AGC Group’s chemicals business originally began with the production of soda ash, the main raw material for producing glass. The Group subsequently developed a wide variety of products through its own chemical chain, which enables full use of by-products generated through chemical reaction process. While working to keep its environmental impact to a minimum, the AGC Group supplies a broad lineup of prod- ucts ranging from basic chemicals like caustic soda to highly functional chemicals such as Fluon® ETFE, which holds the number-one global market share for fluorinated resins. Market share rankings for main products (Based on ﬁscal 2015 estimates by AGC) Fluorinated resins (Fluon® ETFE) Global No.1 The AGC Group’s Chemical Chain Chlor-alkali and urethanes Fluorochemicals and specialty chemicals Methane Fluorite Hydroﬂuoric acid Gases and solvents Chlorinated solvents Chlorine Chloroform HCFC-22 Tetraﬂuoro- ethylene Raw salt Potassium chloride Electrolysis Liquid chlorine Sodium hypochlorite Caustic soda Sodium bicarbonate Vinyl chloride monomer Vinyl chloride polymer Caustic potash Potassium carbonate Epichlorohydrin Fluorochemicals Fluorinated gas recovery and processing Fluorinated solvents ASAHIKLIN™ AMOLEA™ HFO-1234yf Fluorinated water & oil repellents AsahiGuard™ E-SERIES Fluoropolymer Fluon® Fluoropolymer ﬁlm Fluon® ETFE FILM F-CLEAN™ Fluoroelastomers AFLAS™ Transparent amorphous ﬂuoropolymer CYTOP™ Fluoropolymer ion-exchange membrane Flemion™ Fluoroplymer resin for coatings LUMIFLON™ Hydrogen Propylene oxide (PO) Propylene glycol (PG) Polypropylene glycol (PPG) Polyurethanes Fluorine containing pharmaceutical & agrochemical intermediates & active ingredients Chlor-alkali Polyurethanes Life science 21 AGC Report 2016 Chlor-alkali and urethane In its chlor-alkali and urethane business, the AGC Group supplies highly versatile basic chemical products—such as caustic soda and sodium bicarbonate—used in various industries. In addition, its urethane-related products are used as raw materials in thermal insulation, vehicle seats and other products that are vital for providing comfort in our everyday lives. Fluorochemicals and specialty chemicals In its fluorine and specialty chemicals business, the AGC Group’s fluorochemical products have gained a strong reputation for their outstanding heat resistance, chemical resistance and weather resistance. Led by Fluon® ETFE fluorinated resin—which holds top global market share—the business’ wide range of high-performance products are used in various industries. For example, its fluorinated resins and fluorinated elastomers are commonly applied in the automotive and aircraft industries, and its fluoropolymer films and fluoropolymer resins for coating are used in the building construction industry. Likewise, its multifunctional materials are used in electronic devices and displays. In addition, the AGC Group contributes to the life science industry by supplying services and products such as pharmaceutical and agrochemical intermediates and active ingredients. “EXCENOL™” polymer polyols Used for products like mattresses and vehicle seats “Fluon® ETFE FILM” Fluoropolymer ﬁlm Used for a wide range of applications due to its excellent transparency and weatherability “LUMIFLON™” highly weather-resistant ﬂuoropolymer resin for coatings Used for coating buildings and structures Sodium bicarbonate Used widely, including medical applications such as dialysis ﬂuid “HFO-1234yf” refrigerant for next-generation vehicle air-conditioners Helping to reduce environmental load Photo HFO-1234yf manufacturing plant “Taﬂuprost” pharmaceutical active ingredients Used in medications for treating glaucoma Note A glaucoma and ocular hypertension therapeutic agent jointly developed with Santen Pharmaceutical Co., Ltd. Fluon® ETFE FILM used for the Allianz Arena, a soccer stadium in Germany AGC Report 2016 22 Business Overview CERAMICS/ OTHER The AGC Group offers a variety of products and solutions that contribute to innovation in glass production processes and environmental conservation. Ceramics Business The AGC Group’s ceramics business has a long history, dating back to 1916, when it began producing refractory bricks for glass melting furnaces. The business is now operated by AGC Ceramics Co., Ltd. With its core businesses in glass engineer- ing, environmental and energy-related domains, the compa- ny leverages its diverse lineup of refractory products and leading-edge engineering technologies. In the glass engineering business, the company aims to help its customers improve energy efficiency and extend the service life of their glass furnaces, as well as ensure stable oper- ations and lower lifecycle costs by supplying high-durability, high-performance fused cast bricks and related solutions. In environmental and energy-related businesses, AGC Ceramics offers a wide range of ecological solutions, imple- menting castable refractories that make industrial furnaces more energy efficient and reduce environmental load. The company also focuses on developing ceramic materials that help reduce global environmental impact, such as high-tem- perature fine ceramic fans and sputtering targets for eco-friendly glass. “Tough Coore™” ceramic material for heat shielding road surfaces Alleviates heat island phenomenon “THERMOTECT™” high thermal insulating ceramic furnace materials Outstanding durability and heat insulation for long-term insulation performance under high temperatures, helping to reduce costs by conserving energy Castable refractories for industrial furnaces Supporting stable operations with an extensive lineup Fused cast refractory bricks for glass melting furnace crown 23 AGC Report 2016 New Products Products for New Markets Combining diverse technologies, the AGC Group is creating products with even higher added value for new markets. For Next-generation Communications Markets Making all the glass around us into an information interface infoverre™ Glass integrated digital signage Glascene™ Transparent glass screen Transforming Glass into an Informational Device by Integrating Liquid Crystal Displays Comprised of an LCD directly attached on building exterior or interior glass, infoverre™ digital signage creates the effect of images floating in the air. The AGC Group has enabled non-reflective, clear images by applying integrated optical technologies cultivated through its chemicals business. Opening Up New Possibilities for Projectors by Enabling Image Projection Onto Transparent Glass Manufactured using a unique process, Glascene™ is a glass screen that enables images to be projected onto it. This new type of screen retains its transparency while images are projected. The images can be projected from the front or rear sides of the screen, which can be produced at sizes over 100 inches. Just ordinary glass when not in use. Attached to the windows of the Shin-Marunouchi Building in Tokyo, 55-inch infoverre™ LCDs show a range of advertisements. This product received a 2015 Digital Signage Award in the Technology category. Glascene™ displays beautiful images while retaining its transparency. For Next-generation Mobility Markets Making vehicle interiors more comfortable with user-friendly touch panels Cover Glass for Console Panels Realizing More Comfortable and Reliable Touch Panel Oper- ation through Electronic Device Cover Glass Technology In recent years, the automotive industry has been develop- ing technologies that integrate the operation of various vehicle equipment, including stereos, navigation systems and air conditioners. Having outstanding strength, scratch resistant and anti-reflective properties, the AGC Group’s Dragontrail™ cover glass for electronic devices is now used for the console panels of vehicle equipment. AGC Report 2016 24 Innovation Management The AGC Group is Combining a Diverse Range of Core Technologies to Drive All-New Innovations. Core Technologies A New Framework for Research and Development As shown in the following diagram, the AGC Group has accumulated a diverse range of core technologies: glass and ceramic material technologies respond to various needs in society, coating and glass integration technologies add more value to products, and fluorine and chemistry technol- ogies are used for creating advanced high-performance products. To underpin such research and development initiatives, the AGC Group is also working on the develop- ment and sophistication of its fundamental technologies such as simulation, analysis, sensing and process design technologies. By combining and integrating these technologies and then drawing from the vast technological possibilities that result, the AGC Group intends to drive innovations that bring new value to trades and communities, while also meet- ing the needs of customers and helping resolve the challenges they face. In January 2016, AGC Asahi Glass reorganized its research and development operations with the aim of developing more competitive and innovative core technologies and new products. As part of this reorganization, the new Innova- tive Technology Research Center was established in the company’s Technology General Division, and given the tasks of creating innovative core technologies and applying advanced fundamental technologies to promote progress in product development. At the same time, the New Product R&D Center was set up for the purpose of creating new products and solving technical issues concerning existing products. The Production Technology Division was also created to develop and refine production technologies. Based on an approach that integrates market and product development, AGC Asahi Glass is working on R&D in an agile manner while promoting close cooperation between five relevant organizations in its Technology General Division, which now includes a new Planning Division and Intellectual Property Division, and the R&D divisions of each respective In-house Company. The AGC Group’s Core Technology Map An R&D Framework to Achieve Greater Competitiveness Creating New Value Glass Integration Technologies •Laminate technology •Encapsulation technology Coating Technologies •Dry coating •Wet coating •Coating design Glass Material Technologies •Glass material design •Glass forming technology •Glass production technology Fluorine & Chemistry Technologies •Fluorine chemistry •Polymer materials •Biochemistry •Electrochemistry •Nano-materials •Inorganic materials Ceramic Material Technologies •Ceramic material design •Refractory materials Fundamental Technologies •Simulation technology •Analysis technology •Sensing technology •Process design (engineering) 25 AGC Report 2016 Technology General Division Responsible for fundamental/basic technology Planning Division Developed and promotes technological strategy Innovative Technology Research Center Creates innovative fundamental technologies New Product R&D Center Creates new products Production Technology Division Develops process-related and engineering technology Intellectual Property Division Formulates and implements intellectual-property-related strategy Collaboration Each In-house Company R&D Division Responsible for product development technology, production technology implement Glass Company R&D Division Electronics Company R&D Division Applied Glass Materials General Division R&D Division Chemicals Company R&D Division AGC Ceramics R&D Division The AGC Group’s Approach to Innovation The AGC Group is Accelerating Innovation Based on a Global Perspective and a Medium- to Long-term Outlook To chart a course for its R&D over the medium and long terms, the AGC Group draws its own technology roadmap called “Technology Outlook,” which is based on projections of the products and technolo- gies that will be in high demand over the next 10 to 20 years. To develop and commercialize such products and technologies, the AGC Group also creates a business roadmap called “Business Outlook” which consists of survey results on whether they are suitable for the Group and can sustainably generate profits. As a result of extensive studies and analysis, smart community-related markets have been identified as crucial R&D targets to explore in the future. The AGC Group is now moving forward with proactive R&D and business development in related areas. A key to successful commercialization of new products and technologies is a close link between the market and product development. Under an initiative called Global Technology Networking (GTNET), the AGC Group gathers and studies leading-edge technological information and market trends through expert personnel sent to strategic locations in Japan, Southeast Asia, Europe and the United States, where universities and corporate research facilities are concentrated. This activity helps strengthen the relationship between marketing and product devel- opment operations on a global scale, explore the seeds of new businesses, build on the Group’s technologies and expand business networks. Another R&D initiative is open innovation. By making extensive use of resources from outside through strategic business alliances as well as mergers and acquisitions, the AGC Group aims to accelerate technical innovations and opportunities for new market creation, and shorten product development lead times. The Group also participates in national projects related to smart communities, collaborating with other companies and research institutions. R&D Target Setting Process p S e 1 t S t e p 2 S t e p 3 Identify seeds for innovative technology Establish and follow a technology roadmap Predict the potential for commercialization Establish and follow a business roadmap Set key objectives for R&D with a view to create new value Analyze social trends and assess technical potential Analyze suitability as a company business and assess business potential Smart community-related markets Next-generation Mobility Heat Management Next-generation Communication Security and Safety Life Science New Energy and New Green AGC Report 2016 26 CSR Management By Identifying Material Issues in CSR, the AGC Group Promotes CSR Management within Corporate Management. Approach to CSR and Related Policies CSR Promotion System The AGC Group Vision “Look Beyond” (see page 2) is comprised of “Our Mission,” “Our Shared Values” and “Our Spirit.” This Vision provides the basis for the Management Policy AGC plus, through which the Group strives to offer added value (add a “plus”) to all stakeholders. By following this approach, the Group strives to both foster trust and meet the expectations of the community and contributes to the creation of a sustainable society. In addition, the AGC Group has established “the AGC Group Charter of Corporate Behavior,” which outlines the corporate social responsibility expected of Group compa- nies, and “the AGC Group Code of Conduct,” which clarifies the standards of behavior for all employees. 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 heads of each business and corporate division deliberate over general policies and issues related to the Group’s CSR activities on a quarterly basis. The results of deliberations by the CSR Committee are shared globally across the AGC Group through subcommit- tees specializing in compliance and risk management, as well as Environment, Occupational Health, Safety and Quality (EHSQ) management. The information is then reflected in measures implemented by the Group’s In-house Companies and Strategic Business Units (SBUs). CSR-related Policies Social Responsibility AGC Group Business Environment Charter of Corporate Behavior Group Vision The Group’s corporate philosophy for all business and social activities Management Policy AGC plus Code of Conduct CSR Promotion System CSR Committee (meets quarterly) Deliberates over general policies and issues related to the Group’s CSR activities Chair: Group CEO Office: Group Corporate CSR Office Subcommittees •Compliance Committee •EHSQ Management •Enterprise Risk Management AGC Group Charter of Corporate Behavior The Group Charter sets forth and declares the perspectives that form the basis of our behavior to ensure that the AGC Group will remain a good corporate citizen. AGC Group Code of Conduct The Code of Conduct sets forth standards to be observed by all Group members from the perspective of “integrity” in Our Shared Values under the AGC Group Vision “Look Beyond.” Management Policy AGC plus The Management Policy sets forth the course of action for all the Group’s business activities providing social and business aspirations, guidelines and directives. It is revised as necessary to reflect changes in the business environment and circumstances of the Group. Each In-house Company/SBU CSR Offices in In-house Company/SBU Group companies world wide Corporate Divisions Corporate Planning Division General Affairs Division Legal Division Support and guidance Human Resources Division Purchase & Logistics Division 27 AGC Report 2016 The PDCA Cycle and Material Issues The CSR PDCA Cycle The AGC Group’s Stakeholders In 2011, the AGC Group began to develop the CSR monitor- ing framework based on ISO 26000 to assess the Group’s CSR activities from the perspective of stakeholders and strengthen measures and policies that benefit the communi- ty. As a specific initiative, it created a matrix that categorizes four types of CSR issues according to their importance. One of these categories, “issues for which a framework is to be developed and a commitment made to society,” is recog- nized as being important for both the AGC Group and its stakeholders. Accordingly, the Group has designated this category as a priority material issue, and is disclosing related targets and results to stakeholders via its CSR website. Customers Shareholders and investors Society Business partners Employees Evaluation/ Requirements, Expectations Information Disclosure AGC Group CSR Monitoring Review of CSR-related Issues Target-setting for Material Issues CSR Activities Matrix of CSR Issues The AGC Group’s Material Issues in Relation to ISO 26000 International Standards Targets and results for issues covered in this section of the chart are disclosed publicly as the AGC Group’s priority material issues Issues for which information is to continue to be collected Issues for which a framework is to be developed and a commitment made to society Issues for which additional measures are deemed unnecessary Issues for which a framework is to be developed Material issues for the AGC Group l s r e d o h e k a t s r o f s e u s s i l a i r e t a M ISO 26000 Items Core subjects Issues AGC Group’s material issues Organizational Governance Decision-making processes and structures Organizational governance Conditions of work and social protection Human Rights and Labor Practices Health and safety at work Fair working conditions Occupational health & safety Human development and training in the workplace Human resource development Prevention of pollution Pollution prevention The Environment Sustainable resource use Sustainable use of resources Climate change mitigation and adaptation Response to climate change Anti-corruption Fair Operating Practices Fair competition Anti-corruption Compliance with antitrust laws Promoting social responsibility in the value chain Social responsibility in the supply chain Consumer Issues Protecting consumers’ health and safety Product safety WEB Please visit the AGC Group’s CSR website for more information about its CSR management and activities: http://www.agc.com/english/csr/index.html AGC Report 2016 28 Corporate Governance The AGC Group is Raising the Transparency and Agility of Management Oversight and Execution. Approach to Corporate Governance Framework for Management Oversight Under the AGC Group Corporate Governance Basic Policy, AGC Asahi Glass strives to strengthen and improve its corporate governance with a view to ensuring its sustain- able growth and raising the AGC Group’s corporate value over the medium and long term. The Company is responsible for managing the AGC Group as a whole, beyond the conventional framework of a parent company and subsidiaries. On that basis, the follow- ing is the Company’s basic approach to its corporate gover- nance system: • The management oversight function and management execution function shall be clearly separated • In the execution of management, corporate functions and the business execution function shall be clearly separated Structure and Role of the Board of Directors The Board of Directors of AGC Asahi Glass consists of seven directors, each appointed to a one-year term, and includes three outside directors, including one female director1. The Board is responsible for the approval of the AGC Group’s basic policies and monitoring its management. The Company first employed outside directors in 2002 in an effort to enhance the management oversight function. Outside directors are appointed in compliance with the requirements under the Companies Act of Japan as well as the Company’s own selection criteria designed to ensure director independence. Outside directors monitor issues concerning the Group’s business management and offer advice to the Board of Directors from an independent and objective standpoint, based on their extensive experience in global Overview of Corporate Governance Structure (as of March 30, 2016) 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 n o i t a r e p o o C l a u t u M Corporate Auditors: 4 Auditors (Including 3 Outside Corporate Auditors) Accounting Auditor General Meeting of Shareholders Board of Directors: 7 Directors (Including 3 Outside Directors) Chairman President & CEO Senior Executive Officer CTO Senior Executive Officer CFO Nominating Committee: 5 Directors (Including 3 Outside Directors) Compensation Committee: 5 Directors (Including 3 Outside Directors) Executive Officers Management Committee CSR Committee Compliance Committee Fair Trade Committee Internal Audit Division Group Corporate Information Management Council Security Export Control Headquarters In-house Companies/Strategic Business Unit (SBU)2 e t a r o p r o C p u o r G n o i t c n u F 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). 29 AGC Report 2016 corporate management and knowledge of corporate governance related issues. In principle, meetings of the Board of Directors are chaired by an outside director. 1 As of March 30, 2016 Meetings of the Board of Directors in Fiscal 2015 Meetings held Attendance rate of members of the Board of Directors 13 95% Assessment of the Effectiveness of the Board of Directors The effectiveness of the Board of Directors of AGC Asahi Glass is subject to assessments and evaluations. As a result of the assessments, it was confirmed that the Company’s Board of Directors is effectively fulfilling its responsibilities of overseeing management execution and approving basic action plans for the AGC Group. Structure and Roles of the Nominating Committee and Compensation Committee AGC Asahi Glass established its Nominating and Compensation Committees in 2003 as voluntary advisory committees of the Board of Directors. Committee Activities in Fiscal 2015 Number of members Duties Nominating Committee 5 Directors (of which 3 are outside directors) Deliberate on candidates for director and executive officer positions, and make recommendations to the Board of Directors Compensation Committee 5 Directors (of which 3 are outside directors) Deliberate on the compensation system for directors and executive officers, directors’ compensation limits and bonuses to be reported to the general shareholders meeting, and the amount of compensation for executive officer Number of meetings held 3 times 8 times Structure and Role of the Board of Corporate Auditors The Board of Corporate Auditors audits the performance of directors by attending important meetings, including meeting of the Board of Directors and the Management Committee, and by holding regular meetings with repre- sentative directors. The corporate auditors also enhance the effectiveness of auditing by exchanging views and checking information concerning audit results and other matters in cooperation with accounting auditor and the Internal Audit Division. As of March 30, 2016, AGC Asahi Glass employed four corporate auditors in total, of which three were outside corporate auditors. Meetings of the Board of Corporate Auditors in Fiscal 2015 Meetings held 13 Attendance rate of members of the Board of Corporate Auditors 100% Ensuring the Independence of Outside Directors and Outside Corporate Auditors AGC Asahi Glass has set standards to ensure the indepen- dence of outside directors and outside corporate auditors. To help enable outside directors to effectively oversee operations, the Corporate Planning Division, which serves as the Secretariat of the Board of Directors, provides them with relevant information and documents prior to Board of Directors meetings, as well as comprehensive explanations of issues to be debated by the Board in advance when necessary. Similarly, the Secretariat of the Board of Corporate Auditors assists outside corporate auditors by holding Board of Corporate Auditors meetings, attending import- ant meetings, and helping them coordinate meetings with representative directors and accounting auditor. Framework for Management Execution At AGC Asahi Glass, the management execution function is the responsibility of executive officers below the president & CEO. As an advisory committee to the president & CEO, the Company establishes the Management Committees and discusses business management monitoring and decisions regarding management execution. A system of In-house Companies (quasi-subsidiaries within the Group) has been introduced and a global consolidated manage- ment system is adopted with regard to business execution. Much of the responsibility and authority for business execu- tion has been delegated to the In-house Companies and Strategic Business Units. AGC Report 2016 30 Corporate Governance Compensation System Basic Philosophy on Compensation System for Directors and Corporate Auditors In its Compensation Principles, AGC Asahi Glass sets out its basic stances and philosophies on overall compensation for officers as follows. • The compensation system shall be one that enables the Company to attract, secure and reward diverse and talented personnel, in order to establish and expand the Company’s edge over its peers. • The compensation system shall be one that promotes continued improvement of corporate value, and in this way allows shareholders and management to share gains • The compensation system shall be one that gives motivations to achieve performance goals relating to management strategies for the AGC Group’s continuous development. The amount of the Bonuses, which is aimed at motivat- ing recipients to achieve their single-fiscal-year business results goals, varies depending on consolidated business results for a single fiscal year. The stock compensation-type stock options are intended to allow recipients to share benefits and risks associated with stock price fluctuations with our shareholders, and enhance their motivation and morale so as to raise business results and corporate value on a medium to long term basis. Compensation Determination Process The Compensation Committee deliberates on matters such as the compensation system and level for directors and executive officers based on the Compensation Principles, makes proposals regarding them to the Board of Directors, and verifies the results of compensation payments in order to increase the objectivity and transparency of the compen- sation determination process. • The decision-making process of determining compensation Compensation to Directors and Corporate Auditors1 in Fiscal 2015 shall be objective and highly transparent Composition of Compensation for Directors and Corporate Auditors Under the company’s compensation system, directors who also serve as executive officers receive a fixed monthly salary, performance-linked bonuses, and stock compensation-type stock options, while directors who do not serve as executive officers receive a fixed monthly salary and stock compen- sation-type stock options. Meanwhile, outside directors and corporate auditors only receive a monthly salary. Composition of Compensation for Directors and Corporate Auditors Type of compensation Eligible persons Directors Fixed compensation Monthly compensation All directors Performance-linked compensation Performance-linked bonuses Directors who also serve as executive officers Stock compensation-type stock options Directors excluding outside directors Corporate auditors Fixed compensation Monthly compensation All corporate auditors Number of recipients Total payment (millions of yen) All directors Outside directors only All corporate auditors Outside corporate auditors only 9 3 6 5 439 46 93 57 1 Figures include remuneration to a total of four directors and corporate auditors (including outside corporate auditors) who either retired or resigned in March 2015. Internal Control In response to the enactment of the Companies Act of Japan, AGC Asahi Glass established a basic policy for internal control in May 2006, with the aim of confirming that its business execution systems, including the compliance system, were functioning appropriately. Furthermore, the Company adopted an internal control reporting system in compliance with Japan’s Financial Instruments and Exchange Act, and on that basis, created the AGC Group Internal Control over Financial Reporting Implementation Regulations, and is maintaining and imple- menting the system to ensure sound financial reporting. 31 AGC Report 2016 Board of Directors, Corporate Auditors and Executive Ofﬁcers Board of Directors Kazuhiko Ishimura Representative Director & Chairman Takuya Shimamura Representative Director and President & CEO Yoshinori Hirai Director Shinji Miyaji Director Masahiro Sakane Director (Outside) Hiroshi Kimura Director (Outside) Masako Egawa Director (Outside) Appointed in March 2011 Member of the Nominating Committee and Compensation Committee Councilor to Komatsu Ltd. Outside Director of Tokyo Electron Ltd. Outside Director of Nomura Holdings, Inc. Outside Director of Nomura Securities Co., Ltd. Outside Director of Takeda Pharmaceutical Co., Ltd. Outside Director of Kajima Corporation Appointed in March 2013 Member of the Nominating Committee and Compensation Committee Special Advisor to Japan Tobacco Inc. Outside Director of Nomura Holdings, Inc. Appointed in March 2014 Member of the Nominating Committee and Compensation Committee Professor, Graduate School of Commerce and Management, Hitotsubashi University Outside Director of Tokio Marine Holdings, Inc. Outside Director of Mitsui Fudosan Co., Ltd. Executive Ofﬁcers President & CEO Takuya Shimamura CEO Leader of AGC Group Improvement Activities Executive Vice President Yoshiaki Tamura President of Glass Company Senior Executive Ofﬁcers Marehisa Ishiko GM of Automotive General Division, Glass Company Jean-François Heris GM of Building & Industrial General Division, Glass Company; President & CEO of AGC Glass Europe Yoshinori Hirai CTO GM of Technology General Division; Oversight of Electronics Company and Applied Glass Materials General Division Deputy Leader of AGC Group Improvement Activities Tetsuo Tatsuno GM of Finance & Control Division Shinji Miyaji CFO GM of Corporate Planning Division GM of Export Compliance Control Directorate Deputy Leader of AGC Group Improvement Activities Yoshinori Kobayashi President of Electronics Company Masao Nemoto President of Chemicals Company Executive Ofﬁcers Tadayuki Oi GM of Strategy & Planning Ofﬁce, Glass Company Shinichi Kawakami GM of General Affairs Division Akinobu Shimao President of AGC Ceramics Co., Ltd. Tomoya Takigawa GM of Innovative Technology Research Center, Technology General Division Takashi Shimbo Chief Representative of AGC Group for China Kimikazu Ichikawa Chief Representative of AGC Group for Southeast Asia Kazuaki Koga GM of Essential Chemicals General Div., Chemicals Company Kenzo Moriyama GM of Strategy & Planning Ofﬁce, Corporate Planning Division Kazuyoshi Watanabe GM of Display Glass General Div., Electronics Company Takashizu Minato GM of Performance Chemicals General Div., Chemicals Company Kihachiro Okamoto Deputy GM of Automotive General Division, Glass Company Shigekuni Inoue GM of Production Technology Div., Technology General Division Hiroyuki Watanabe GM of New Product R&D Center, Technology General Division Takayasu Ide GM of Technology Management General Div., Chemicals Company Seigo Washinoue Deputy GM of Display Glass General Div.; GM of Marketing & Sales Management Div., Display Glass General Div., Electronics Company Masahiro Takeda Deputy GM of Building & Industrial General Div., Glass Company; GM of Japan/Asia Paciﬁc Div., Building & Industrial General Div., Glass Company Takashi Misu GM of Human Resources Division Tatsuo Sugiyama GM of Japan/Asia Paciﬁc Div., Automotive General Div., Glass Company Takahisa Sugiyama GM of Electronic Materials General Div., Electronics Company Note GM: General Manager Corporate Auditors Shukichi Umemoto Yasushi Marumori (Outside) Toru Hara (Outside) Hiroshi Kawamura (Outside) As of 30 March, 2016 AGC Report 2016 32 History With Over 100 Years of History, the AGC Group Aims to Continue Contributing to Society for Years to Come. From 1900 From 1920 Time of Establishment From 1940 Expanding Business Globally 1907 Asahi Glass Company established in Amagasaki, Hyogo Prefecture, by Toshiya Iwasaki (pictured). 1925 Shoko Glass Co., Ltd. established in China as Asahi Glass’ first business outside Japan. 1952 Agreement concluded to export caustic soda electrolysis equipment to Indonesia. 1955 Deming Prize received for quickly adopting quality management. 1914 The first export of flat glass to England. 1917 Headquarters moved to Tokyo. 1933 The Asahi Foundation for Chemical Industry Promotion (now the Asahi Glass Foundation) established to commemorate our 25th anniversary. 1956 Glass manufacturing subsidiary established in India, demonstrating progress in expanding internation- ally ahead of other Japanese companies. 1937 Stocks listed on the Tokyo Stock Exchange. 1957 Asahi Glass Scholarship Foundation established to commemorate our 50th anniversary. Evolution of Products and Technologies 1909 Mass production of flat glass using a Belgian method of producing glass with hand-blown cylinders begins for the first time in Japan. 1916 In-house production of long-lasting refrac- tory bricks for melting furnaces begins. 1917 In-house production of soda ash, a key raw material for glass, begins. 1914-1918 First World War 33 AGC Report 2016 1928 Production of flat glass by the Fourcault process begins. 1954 Production of double-glazing units PairGlass™ begins. 1933 Caustic soda production using the ammonia method begins. 1955 Manufacture of glass bulbs for television picture tubes begins. 1956 Automotive glass business launched on a full scale to respond to rapidly growing demand. 1938 Production of tempered glass and laminated glass begins. 1939 Production of refractory bricks begins at the Iho Plant. 1923 Great Kanto Earthquake in Japan 1929 Beginning of the Great Depression in the United States 1939-1945 Second World War 1951 Treaty of San Francisco concluded 1953 Television broadcasting begins in Japan 1954-1957 Economic boom in Japan From 1960 From 1980 From 2000 Period of Growth and Expansion Toward Global Operations 1964 Entry into Thailand’s flat glass market. 1981 Glaverbel S.A. in Belgium acquired. Full-scale entry in Europe’s flat glass market. 2002 Creation of AGC Group Vision, In-house Company system introduced. . 1972 Glass production operations commence in Indonesia. 1985 Full-scale entry of the automotive glass business in the United States. 1986 Full-scale entry of the chlor-alkali business in Indonesia. 1997 Entry into Russia’s glass market. 2007 Group brand unified as “AGC” to mark its 100th anniversary. 2013 The Brazil Plant, one of the most environmen- tally friendly factories in South America starts operation. Entry into Brazil’s flat glass market. 2013 Regional headquarters established in Singapore with the aim of business expansion in Southeast Asia. 2015 “AGC plus” management policy implemented. 1961 Production of propylene oxide and propylene glycol begins. 1980 AZEC System, a new ion-exchange membrane electrolyzer, developed. 2005 Sales of automotive door glass that blocks infra- red rays launched. 1966 Production of float glass begins. 1972 Product development of AsahiGuard™ water and oil repellants and Aflon™ COP fluorinated resins begins. 1975 Development of the Flemion™ fluoropolymer ion-exchange membrane electrolysis method for manufacturing caustic soda. 1982 Production of fluoropoly- mer resin for coatings (LUMIFLON™) begins. 1990 CYTOP™ transparent amorphous fluoropoly- mer developed. 1995 Production of glass substrates for TFT-LCDs begins. 2008 High-performance Fluon® ETFE FILM used for various sports venues at the global sports event in Beijing. 2011 Worldwide sales of Dragontrail™ glass for smart- phones and tablet computers begin. 2011 UV Verre Premium Cool on™ tempered glass for automotive door windows sales begin. 2015 Supply of HFO-1234yf, a next-generation auto- mobile refrigerant with a low environmental bur- den, begins. 1960 Color television broadcasting begins in Japan 1983 Birth of the Internet 2003 Terrestrial digital broadcasting begins in Japan 1964 Tokaido shinkansen bullet train service commenc- es in Japan and the Olympic Games held in Tokyo 1970 Expo ’70 world’s fair held in Osaka 1973 and 1979 First and second oil crises 1985 Plaza Accord concluded 1993 European Union established 1997 Kyoto Protocol adopted 2008 Global financial crisis begins 2011 The Great East Japan Earthquake and tsunami disaster in Japan’s Tohoku region 2014 FIFA World Cup held in Brazil AGC Report 2016 34 Main Communication Tools Used to Reach Each of Our Stakeholders For customers (including general consumers) AGC Report 2016 (This report) For all stakeholders For shareholders and investors AGC Asahi Glass Website www.agc-group.com/ Provides information about the AGC Group more widely, timely and in more detail Financial Review Reports the AGC Group’s business outline and ﬁnancial information including consolidated ﬁnancial statements (PDF ﬁle only) A Broad Overview of the AGC Group’s Corporate Vision, Business Strategies and Business Activities For CSR-related experts1 and stakeholders with an interest in CSR CSR Website www.agc.com/english/csr/ Provides a comprehensive report on the AGC Group’s efforts to fulﬁll its social responsibilities based on the “core” of G42 CSR Information Supplement Reports on the AGC Group’s non-ﬁnancial data and its various CSR policies and organizations for promoting CSR-related activities (PDF ﬁle only) 1 ESG research agencies, etc. 2 The 4th edition of the GRI Sustainability Reporting Guidelines Scope •Reporting Period Fiscal 2015 (Jan.–Dec. 2015) Some information includes content from both ﬁscal 2014 and 2016 •Organizations Covered in the Report Asahi Glass and its 204 consolidated subsidiaries (Group companies in and outside Japan) •Primary Notation and Report Targets Used in the Report The AGC Group Same as “Organizations Covered in the Report” mentioned at left. The AGC Group (Japan) Group companies in Japan including Asahi Glass Co., Ltd. AGC Asahi Glass/the Company Asahi Glass Co. Ltd. (on an unconsolidated basis) Related Information Date of Publication WEB Articles with this mark have related information on the AGC Asahi Glass website (www.agc.com/english/). April 2016 (Last date of publication: May 2015) Regarding Future Assumption, 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. www.agc.com/english/ 1-5-1, Marunouchi, Chiyoda-ku, Tokyo, 100-8405, JAPAN Corporate Communications & Investor Relations Ofﬁce, Corporate Planning Division Tel: +81-3-3218-5603 Fax: +81-3-3218-5390 Printed on paper made with wood from forest thinning.“Morino Chonai Kai” (Forest Neighborhood Association) —Supporting sound forest management. 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