Corning Inc. expects to keep up strong sales growth in mainland China for the next three years on the basis of a promising flat-panel display market and maturing telecoms business. For the past four y…
Corning Inc. expects to keep up strong sales growth in mainland China for the next three years on the basis of a promising flat-panel display market and maturing telecoms business. For the past four years, Corning“s China business has been increasing at three to four times the country“s economic growth, said Clark Kinlin, chairman and chief executive of Corning“s greater China region. China“s economy grew 10.7% in 2006, the fourth consecutive year of double-digit growth. “(Mainland) China has been an important part of the growth of the company, and we look at it contributing four to five percent of global revenue on a destination basis”, Mr. Kinlin said in a recent interview. Corning had sales of USD 199 million in mainland China in 2006, up 38% from a year earlier, according to company data. In the past three decades, Corning has invested over USD 3 billion in greater China, which covers mainland China, Taiwan and Hong Kong. It operates eight factories in the region, and has more than 3,000 employees focused on the display, telecommunications and automotive industries. “We definitely see the addition of several hundred people over the next few years (in greater China)”, Mr. Kinlin said, without giving precise figures on the size of potential workforce increases or investment. Corning has more than half of the global flat panel substrate market, with the remainder shared among three Japanese companies: Asahi Glass Co., Nippon Electric Glass Co. and Nippon Sheet Glass Co. Mr. Kinlin said China is the fastest-growing market in the world for large-sized TV sales on a percentage basis, but the country represents “much less than 10% of the world“s (LCD-panel) production”. “Our goal is to maintain our worldwide share position here in China. The biggest challenge is to keep aggressive growth, because we find not only do we face our international competitors, but (also) face very competent Chinese competitors”, he said. The Chinese have been trying to develop more sophisticated technologies for glass substrates, in a move to cut dependence on imports and foreign expertise. In January 2007, Irico Group Corp., China“s largest color TV tube maker by output, said it planned to invest CNY 700 million (USD 91 million) to build a plant in the central province of Shaanxi to make glass substrates for flat-panel TVs. Corning began building a glass substrate finishing facility in Beijing in November 2006, making it the first LCD-glass substrate supplier to locate a production base on the mainland. Mr. Kinlin declined to give its projected capacity or give an exact figure for the investment. “It“s under a hundred million dollars so far, because we“re just at the first stage”, he said, adding that products will serve local LCD makers as well as overseas clients after the factory starts operation in the 1H 2008. Corning“s telecom business is second only to the glass segment in terms of sales and generates one-third of the group“s total revenue. In April 2007, the company issued an optimistic 2Q forecast on strong demand for fiber-optic telecom equipment. Corning entered China“s fiber-optic market in 1987. “I was the first guy to sell it”, he said. “The client was a railway company in Xi“an (the capital of Shaanxi province)”. Twenty years on, “we have become one of the top three suppliers for optical fibers and cables in China, and operate four facilities today, two in Shanghai, one in Beijing and One in Chengdu”, Kinlin said. Corning sells products to the national public telephone companies: China Mobile, China Netcom and China Unicom, as well as to railways, and exports to other Asian countries like Japan and Korea, Kinlin said. Mr. Kinlin became the general manager in 2003 of the company“s greater China region, from which Corning earns more than 30% of total annual sales.