Mexican glassmaker Vitro is considering plans to return the company to profitability and alleviate its US$ 2.19 billion debt in the short term.
In September, Vitro wrote off its US$ 1 billion invest…
Mexican glassmaker Vitro is considering plans to return the company to profitability and alleviate its US$ 2.19 billion debt in the short term. In September, Vitro wrote off its US$ 1 billion investment in Anchor Glass, its lossmaking US subsidiary. Purchased in 1989, Anchor Glass accounted for one-third of Vitro“s annual sales of US$ 3 billion, but had become a drain on Vitro“s resources with the downturn in the US glass market. Vitro“s stock, traded in New York and in Mexico City, has lost more than half its value in peso terms since 1994. In dollar terms, the company“s market capitalisation has shrunk from almost US$ 3 billion in 1994 to less than US$ 800 million. According to market analysts, two factors are negatively affecting the stock: Vitro“s heavy debt burden, and the competition the company will face when Saint-Gobain of France opens a flat glass plant at the hub of Mexico“s vehicle assembly industry in the central state of Puebla. Analysts say Vitro is well prepared for competition, however, having invested heavily in recent years in new technology. In 1997, Vitro will complete the modernisation of its flat glass division with a US$ 77 million expansion of its float glass furnace in Mexico City – a joint-venture with Pilkington of the UK. The modernisation has allowed Vitro to deliver higher quality safety glass for the construction industry and the windscreens of trucks and cars.