Asahi Glass Co., Ltd.

Asahi Glass Co., Ltd. (AGC; headquartered in Tokyo; president: Shinya Ishizu) has divested its share in a joint venture to its Chinese partner and is going to have majority ownership in three other joint ventures among four ventures manufacturing glass for construction and automotive use in China.

AGC had owned part of equity of the following four joint ventures in China through Pennvasia Limited, a shareholding vehicle (Pennvasia; headquartered in Hong Kong; managing director: Roger G. Young) equally owned with PPG Industries, Inc. (PPG; headquartered in Pittsburgh, USA; chairman: R. LeBoeuf).

1) Guangdong Float Glass Co.,Ltd.

(GFG; headquartered in Shenzhen; general manager: Yang Yangzhao)

2) Dalian Float Glass Co.,Ltd.

(DFG; headquartered in Dalian; general manager: Nobuo Nishie)

3) Beijing Pennvasia Glass Co., Ltd.

(BPG; headquartered in Beijing; general manager: Zhang Dingjin)

4) Qinhuangdao Haiyan Safety Glass Co., Ltd.

(QHSG; headquartered in Qinhuangdao; general manager:Sun Xiaoping)

Upon divestment by PPG from these four companies, AGC, together with PPG, transferred Pennvasia's equity ownership in GFG to the Chinese partners in GFG on December 29 last year, and determined to buy all of Pennvasia's equity ownership in DFG, BPG and QHSG. With the approval by the Chinese government, AGC has got the 60% ownership of DFG and BPG on February 1 and 29 this year respectively, and equity transfer of QHSG is now examined by the approval authority in China.

GFG, established in 1985 as a joint venture between PPG and other partners, starting commercial production in 1987, has been operated as the first float glass plant using the foreign technology. AGC invested into the company through Pennvasia in 1992 to have indirect 25% equity ownership. However, with the participation of a lot of newly established float glass manufacturers, the Chinese glass market changed to be quite competitive badly affecting GFG's profitability. Considering also that facility in GFG is not suitable for the high value added production such as for automotive use and that the plant is located relatively far from Japanese market in comparison with Dalian, AGC decided to divest from the company together with PPG.

DFG, established in 1992, starting commercial production of glass with the float process in 1995, had been owned 60% by Pennvasia (AGC 30%, PPG 30%), 10% by Itochu corporation, 5% by International Finance Corp. (IFC) and 25% by the local partner. AGC has increased its equity ownership in the company to 60% to integrate its float glass production base in China to Dalian taking the opportunity of PPG's withdrawal. With the help of AGC's technical support and the improvement of Chinese flat glass market situation, DFG has started to show the improvement in profitability lately. DFG shall assume the role as the major supplier of high quality flat glass in Chinese market as well as one of the supply sources to international markets including Japan among AGC group factories.

BPG, established in 1996 with the investment of 60% by Pennvasia (AGC 30%, PPG 30%) and 40% by the local partner, started commercial production in 1997. Line of its business is the fabrication of float glass into tempered glass and insulating glass unit for construction use. AGC has taken over Pennvasia's 60% ownership in the company as well as DFG upon PPG's withdrawal.

QHSG, established in 1991 as a joint venture between Eling, an American company and the local partner, started its business in the same year. With Pennvasia's acquisition of Eling's 52% ownership in the company in 1995, AGC has got indirect 26% ownership in QHSG, the fabricator of float glass into automotive laminated glass and tempered glass. AGC has determined to raise its ownership to 52%, recognizing the company as the important base to cope with the increasing automobile production in China.

AGC has invested approximately US$10 million to acquire the equity of the above three joint ventures. Pennvasia will be liquidated upon completion of all these equity transfers.

Inside Asian region, AGC maintains flat glass production ventures in Thailand, Indonesia, Philippines, India and China and automotive safety glass production ventures in Thailand, Indonesia, Malaysia, Philippines, India, China and Taiwan. AGC, under its "Shrink to Grow" corporate strategy, aims to optimize group cash flow by selectively concentrating resources to match its business and regional strategies.

< Reference >

1. Outline of the Equity Transfer

2. Profile of GFG

3. Profile of DFG

4. Profile of BPG

5.Profile of QHSG