Japan: flat screens mean rising profits

The fortunes of Japan“s four top glass manufacturers in 2008 are set to be strongly influenced by their involvement in electronics. All four producers are suffering slow demand for glass in construct…

The fortunes of Japan“s four top glass manufacturers in 2008 are set to be strongly influenced by their involvement in electronics. All four producers are suffering slow demand for glass in construction and in the auto industry, hurt by the high price of oil and the weakness in the markets of Europe and elsewhere overseas. Only Asahi Glass Co. and Nippon Electric Glass Co. are expected to post higher operating profits in fiscal year 2008 thanks to their production of glass for LCD panels. Asahi Glass is enjoying higher demand for its glass substrates for TFT LCD displays. Its electronics and display division is forecast to post operating profit up 16% in the current fiscal year, compensating for sluggish demand in Europe and the United States and helping the company to a 1% gain in group operating profit to JPY 200 billion (USD 1.9 billion). Nippon Electric Glass is primarily a maker of glass substrates for LCD panels, and its improved productivity and rising sales volume will more than cover the higher price of fuel. The company is predicted to post a 14% gain in group operating profit to JPY 151 billion. At the other extreme is Nippon Sheet Glass Co., which relys on building glass and auto glass for 90% of its sales. The company is expected to post a 33% decline in group operating profit to JPY 31 billion.