Asahi Glass: CRT hits 2006 net profit

Asahi Glass Co. Ltd. , Japan“s largest glass maker, said on 5 February 2007 it expected its net profit in 2007 to double due to strong demand for glass used in flat panel displays and an end to losse…

Asahi Glass Co. Ltd. , Japan“s largest glass maker, said on 5 February 2007 it expected its net profit in 2007 to double due to strong demand for glass used in flat panel displays and an end to losses on glass for CRT TVs. The company, which competes with Corning Inc. and Nippon Sheet Glass Co., also announced plans to close a sheet glass factory in New Jersey due to a slowing US housing market and rising costs for fuel such as natural gas. Group net profit at Asahi Glass fell 25% to JPY 45 billion (USD 373 million) in 2006 due mainly to a JPY 46 billion special loss to dissolve overseas subsidiaries and other restructuring steps in its loss-making cathode-ray tube (CRT) business. Asahi Glass President Masahiro Kadomatsu told a news conference that he would not hesitate to pull out of the CRT glass business if it continues to lose money, though he is aiming for a recovery in 2007. The company is changing its focus to glass used in flat panel displays. “If it cannot produce profits, we will have no other choice than to withdraw”, Kadomatsu said. The company said it aims to post a net profit of JPY 90 billion in 2007 on sales of JPY 1.67 trillion, up 3%. Kadomatsu also said he wants to expand in new business areas such as glass used for solar cells as the company believes it is risky to depend too much on its flat panel business, which is expected to account for more than 60% of operating profit in 2007. He said the solar cell business requires high technological skills and is one way the company could distinguish itself from low-cost Chinese competitors, which are causing it problems in some products, especially sheet glass. “We don“t know if this (solar cell business) will become part of our core business, but we hope to expand it”, Kadomatsu said.