June 20, 2002Management

The Flat Glass Company (Asahi Glass): two major investmentsin Mexico and Russia

Brussels, 20 June 2002 - The recently set up "Flat Glass Company" (FGC) of Asahi Glass Co., Ltd., announced today 2 major investments. A new float in Mexico and a greenfield float in Russia, which are initiated and will be managed respectively by AFG Industries, Inc. (US) and the Glaverbel Group (Europe). FGC today is managing 35 float plants worldwide.
The Mexican plant - a joint venture between Vitro Plano, S.A. de C.V., a subsidiary of Grupo Vitro in Monterey, Mexico, and AFG - will cost approximately USD 100 million. The new plant with a capacity of around 550 metric tonnes of flat glass per day will serve the growing glass demand in Mexico and augment AFG's Victorville, California, production in serving their West Coast customers. Construction has begun to convert an existing container glass facility, owned by Vitro, into AFG's most modern, high quality, float glass plant. It should be completed in the 4th quarter of 2003.
Luc Willame, President of the Flat Glass Company, said, "The plant's location will also help us reduce shipping costs to our customers since West Coast demand has historically exceeded supply and we have had to ship glass from the Midwest and East to service our customers. With NAFTA economies improving and glass demand strengthening, this is an excellent time to invest in additional capacity. Timing is also fortunate with the implementation of California's new energy codes and improving residential and commercial construction."

Through the Glaverbel Group, the Flat Glass Company has also decided to build a new float glass plant in Russia in order to meet the large expansion in local demand. Luc Willame said, "This will be the first such greenfield project in that country by any Western glassmaker. The new plant will have a capacity of around 600 metric tonnes per day, and will be situated at Klin in the Moscow region, near to large consumption centres of glass for the construction and automotive industries in Moscow and St. Petersburg." A mirror production unit with a capacity of around 5 million square metres per year will be built on the same site. Agreement for this double investment totalling around EUR 130 million has been reached with the Russian authorities. Work on the float plant should begin in July this year, and the facilities will be operational in 2004.

The Glaverbel Group is already active in Russia as the only Western glassmaker through the intermediary of Bor Glassworks* (at Nizhny Novgorod), the largest Russian producer of flat glass by the float process (two lines with a total capacity of around 1,100 tonnes/day) and of automotive glass (capacity of around 900,000 sets/year).

The two investment projects are part of the FGC strategy to participate to the growth of glass markets into emerging countries.

* Glaverbel holds a stake of 36.4% in Bor glassworks and acts as industrial operating partner at the head of a consortium of shareholders whose other main members are the IFC and EBRD development banks. The consortium controls more than 85% of Bor Glassworks.

The Flat Glass Company and its operating units

The Flat Glass Company of Asahi Glass Co., Ltd. was introduced in April this year and is one of the 4 "In house companies" that was set up in the framework of the global reorganisation of AGC. The others being "Automotive Glass Company", "Display Company" and "Chemicals Company". The Flat Glass Company, headquartered in Brussels, Belgium, covers all the glass production and processing activities for the building sector and industries sector in America through AFG, in Japan/Asia through Asahi Glass Co., Ltd. and in Europe through the Glaverbel Group. With its 35 float plants, the Flat Glass Company is the world leader in raw glass, with a world market share of around 20%. It currently employs around 27,500 people and has annual sales of approximately EUR 3.6 billion.
AFG Industries, Inc., operating unit of the Flat Glass Company in North America, is the largest US glass supplier to the construction industry. It has 10 glass producing lines in eight plants and operates 51 distribution and fabrication locations through AFGD, 5 residential insulating plants through AFG Insulating and 2 coating operations through AFG Coatings. The Glaverbel Group, operating unit of the Flat Glass Company in Europe, has 15 float plants spread over the whole of greater Europe, from Spain to Russia. It manufactures and markets a full range of glass products for the construction and for specific industries, with 150 or so of its own production sites located in 7 European countries. Thanks to its policy of sustained research, it is the European leader in advanced glass technologies (coated glass, glass with complex structures, etc.).


*For further information:
AFG Vice President Business Development
Fred Wallin
TEL: + 1 423 229 7251
E-mail: fred_wallin@afg.com
Flat Glass Company - AGC (Brussels)
Glaverbel Corporate Communications
Marie-Ange Dhondt
TEL: + 32 (0)2 674 34 28
E-mail: marieange.dhondt@glaverbel.com