Japan“s Asahi Glass Co. said it had posted operating profit in the half year ended September, mainly due to restructuring.
“We have emerged from the worst,” said an executive at Japan“s leading gla…
Japan“s Asahi Glass Co. said it had posted operating profit in the half year ended September, mainly due to restructuring. “We have emerged from the worst,” said an executive at Japan“s leading glass maker. “The profit level is far from satisfactory, but we won“t see any more red ink.” Interim sales totalled 345.8 billion yen (3.3 billion dollars), and operating profit amounted to 2.9 billion yen, compared with a 2.8 billion yen loss the previous year. For the full year through March, operating profit is expected to reach 8 billion yen. The fiscal 1998 loss was the company“s first since going public in 1950. Asahi Glass“ stock price is also recovering. In June 1998, it stood at 716 yen but rebounded to near 1,000 yen when restructuring measures were announced in February. The stock then fell below 700 yen in the middle of September as investors were disappointed by the slow implementation of restructuring. In October, however, Asahi Glass announced a series of business and corporate acquisitions overseas, which helped push its stock back up to 863 yen on 1 November. The stock closed last week at 884 yen. Asahi Glass plans to buy fluorine resin operations from Imperial Chemical Industries Plc of the UK. It will also take a controlling stake in Hankuk Electric Glass Co. of South Korea, a Daewoo group manufacturer of cathode-ray-tube glass, by mid-November. Asahi Glass will pay 206.9 billion won (US$ 174 million) for the takeover, which will make it the world“s leading producer of cathode-ray-tube glass with a 40% share. “We can be counted on to continue cost-cutting efforts,” said a manager at the Sagamihara office in Kanagawa Prefecture. “We want our president to focus on management reforms by carefully watching overall economic trends.” “That“s a pleasant surprise,” Ishizu said, when told the comments. “I had expected to face opposition to my measures from offices where personnel cutbacks are under way.” Until recently, some conservative managers were monitoring the success of Ishizu“s leadership, one executive said. However, “suspicion of the president has receded, and his influence seems to be strengthening,” another executive said. Ishizu has pushed on with reforms, introducing an early-retirement scheme and shutting down a glass kiln at the Yokohama plant. “We give high marks to Asahi Glass“ strategy of spending cash earned from glass and other general-purpose products on the potentially high-growth electronics business,” said an analyst at Daiwa Institute of Research. “Asahi Glass has yet to start restructuring money-losing chemical business such as polyvinyl chlorides,” another analyst said.