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Asahi Glass Philippines May Develop High Value Export Products

MANILA - Japanese-owned Asahi Glass Philippines is exploring the possibility of producing new high value export products should local costs prove competitive.

At present, the Philippine unit is concentrating on the production of architectural and float glasses.

This was announced by AGP after its parent firm Asahi Glass of Japan infused P1.86 billion (US$34.48 million) in new capital to pay off existing loans as well as to strengthen its manufacturing capabilities.

In particular, the company is improving the line and quality of its flat glass line. At present, the flat glass line has production capacity of 450 metric tons a day.

In 2002, AGP accounted for 80 per cent of the local flat glass market but the share had been slashed to 65 per cent in the 3rd and 4th quarters last year because of competition from cheap imports.

AGP also confirmed in a statement that it is indeed phasing out its automotive glass fabrication in the Philippines within the year but the actual schedule will depend on the tooling development timetable for each of the glass component models from the various car assemblers.

Even with the closure of its automotive glass line, which accounts for three per cent of their total production, AGP remains committed to continually supply the requirements of auto assemblers without disruption to their "just-in-time" manufacturing system.

It will also keep a safe level of inventory of locally-made products until the equivalent substitute parts from the ASEAN affiliates shall have been developed and made available.

Its parent firm has an automotive glass manufacturing operating in Thailand and Indonesia and their respective capacity are much larger than the Philippines.

Thailand now sells close to 500,000 vehicles a year exporting 20 to 25 per cent while Indonesia's level is at 350,000 units a year. This compares to the Philippines' 85,000 cars last year.

This means that AGP could easily source from Thailand or Indonesia at lower prices because of the reduction of tariffs in the ASEAN region.

The benefit of improved economies of scale will certainly favor regional supply rationalization especially under the competitive environment.

[ BUZZ MAIN ]