Tokyo, JAPAN - Asahi Glass Co., Ltd. today announced plans to significantly expand its automotive safety glass business in China through a minority buy-out of its existing joint venture in China - Qinhuangdao Haiyan Safety Glass (QHSG), and the construction of a new state-of-the-art facility in Qinhuangdao Economic & Technological Development Zone (QETD Zone), Hebei Province, China.

The economy in China has been growing at a compound annual growth rate of more than 8% since 1992, which is likely to be accelerated following its WTO entry in 2002. The rapid economic growth has led to a booming domestic automotive market, which registered an annual growth rate of 38.5% and reached total annual production output of 3.25 million units in 2002. The forecast for 2003 output exceeds 4 million units, which will place the country at the fourth largest automotive production countries in the world after the USA, Japan, and Germany. Continued government investment in highway infrastructures and rising individual household income will continue to be the main drivers behind the growth of passenger car market in China. China's large market size coupled with rapid growth has made it a top priority for all global OEMs, many of whom have announced plans to introduce a variety of new models to the Chinese market in the coming years.

To meet rising customer requirements and capture greater share of the Chinese market, Asahi Glass carefully evaluated various strategic options to expand its operations in China. This is part of an overall review of Japan-Asia/Pacific regional growth strategy. Asahi Glass concluded the most economically attractive option is to expand its existing joint venture in Qinhuangdao to over 1 million car sets capacity per year (from current capacity of 400,000 car set per year) after the completion of the first phase construction, and make it one of AGC's key manufacturing centers in Asia/Pacific region. In order to keep the Chinese entity being consistent with AGC's global operating strategy, AGC successfully negotiated and agreed with Qinhuangdao government to acquire 48% of QHSG currently held by Qinhuangdao Tempered Glass Factory (QTGF), a state-owned enterprise based in Qinhuangdao, China.

Upon the closing of its acquisition of 48% of QHSG in July, 2003, AGC will commence the construction of a new state-of-the-art manufacturing facility in the QETD Zone,. The new plant will be compliant with the most rigid global environmental standard, and will enable AGC to better serve its OEM and after market customers in China, by bringing in the world's most advanced manufacturing equipment and AGC proprietary technology. Construction of the new plant will be completed by the third quarter of 2004. When fully commissioned, it will employ a total of 1,000 people in Qinhuangdao area. The total investment amount in the initial phase is over 50 million US Dollars.

" Our Vision is to be the most respected automotive parts supplier. The new China project reconfirms AGC Automotive's commitment to serve our Chinese Automotive glass customers to their highest quality and service expectation, and our continued confidence and commitment to contribute to the development of China's overall and Qinhuangdao's local economy", said Jay N. Strong, President of AGC Automotive Glass Company about the new investment, " This is only the first step in our overall effort to establish a leading position in China's automotive glass market, and going forward, we will closely monitor the market development and be prepared to making additional capacity expansion in Qinhuangdao or other parts of China, to fulfill our commitment to our customers in China. This marks another important step to fulfill our Mission to create shareholder value by improving our customer's business."

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