Asahi Glass Philippines, which accounts for 84% of the output of the Philippine glass sector, expects industry production to grow by just 1% in 2006, down from at least 3% two years ago.
The company,…
Asahi Glass Philippines, which accounts for 84% of the output of the Philippine glass sector, expects industry production to grow by just 1% in 2006, down from at least 3% two years ago. The company, an affiliate of Asahi Glass Co. Ltd. of Japan, said the sector should be able to recover once the economy improves. “We only expect at least 1% growth this year or the same as last year because of the economy”, Asahi Glass President Renato R. Ermita said in a recent interview. Domestic construction and the automobile sector account for nearly 70% of the company“s market, with exports accounting for 30%. In 2006, the Philippine industry produced a total of 2.7 million cases of flat glass. One case is equivalent to a flat glass panel of 100 square feet. Mr. Ermita said that two years ago, when the economy was growing at 6%, the glass industry grew by just 3%. “So we can“t be too optimistic now”, he said. Economic growth slowed to 5.1% in 2005 from 6.1% a year earlier. Government economic planners expect the economy to grow by 5.5%-6.2% in 2006 on hopes that services will remain strong. Mr. Ermita, however, was more conservative. “I don“t think the economy will regain its strength this year. Recovery may happen in three to five years”. The company aims to grow export volume by 50% this year, although Mr. Ermita did not give specific figures. He said Asahi Glass would step up export production following the declaration of the company“s 28-hectare manufacturing facility in Pasig as a special economic zone under the Philippine Economic Zone Authority (PEZA). To qualify for PEZA incentives such as income tax holidays, duty-free importation of capital equipment and raw materials, exemption from wharfage dues and export taxes, imposts, and fees, firms seeking to locate in an ecozone must export 70% of total output. By July 2006, the company will launch two new products, a special glass for flat television and automotive glass, for Japan, its main export market. The company also recently invested USD 10.1 million for the production of “Solite” glass solar panels, particularly for the Chinese and Japanese markets. “The growth of solar panels is good”, Mr. Ermita noted.