[Company analysis] Asahi Glass Co., Ltd. (AGC)

「Asahi Glass Co., Ltd. (AGC)」is a member of the「Mitsubishi Group(三菱グループ)」and focuses on building materials, automotive glass and fluorochemical products. In the field of glass industry, this company has the largest sales in the world and only「Nippon Sheet Glass Co., Ltd.(日本板硝子)」is their rival in Japan domestic level. Besides,「Asahi Breweries, Ltd.(アサヒビール)」 and「Asahi Kasei Corporation(旭化成株式会社)」are completely different companies and there is no capital relationship. The number of consolidated employees is approximately 6,659.

 

 

1. Company Profile

2. Summary and Features

3. Major Business

4. Financial Information

 

 

 

1. Company Profile

 

※Unit is JPY million, as of 2019

Company name	Asahi Glass Co., Ltd.
Company name (Japanese)	AGC
Date of establishment	Sunday, September 8, 1907
Headquarters location	〒100-8405 東京都千代田区丸の内一丁目5番1号
Capital	90,873
Consolidated sales	1,522,904
Consolidated operating profit	120,555
Consolidated total assets	2,235,776
Consolidated capital	1,253,604
Capital adequacy ratio	56.1%
Consolidated number of employees	6,659

 

 

 

2. Summary and Features

 
「AGC」is Japan's first flat glass manufacturer founded by Iwasaki Toshiya(岩崎俊弥) of Mitsubishi Zaibatsu in 1907. Flat glass, which was a business at the time of its founding, is still in production, and it has the largest scale among affiliated companies. On September 8, 2007, in commemoration of the 100th anniversary of its founding, the name "Asahi Glass" has been changed to "AGC", and there was a intention to expand their business territory to worldwide with unified brand.

This company develops and produces not only automotive glass, architectural glass and fluorochemical products, but also electronic components and other chemical-related materials. The glass business accounts for about 50% of the total sales, including automotive glass division. About this automotive glass business, Japan's four major automobile manufacturers(「Toyota Motor Corporation(トヨタ自動車)」,「Nissan Motor Co., Ltd.(日産自動車)」, 「Honda Motor(ホンダ)」,「Mazda Motor Corporation(マツダ)」) are all customers of「AGC」.

However, the electronic and chemical fields, which account for the remaining 50% of sales, are actually higher in profitability than the glass field. This is because the glass market has relatively low barriers to entry, and price competition is extremely intense. Normally, the profitability of the glass business is about 3.7%, but electronics business is about 10.4% and the chemical business is about 14.5%.

The immediate goal of「AGC」is to generate stable profits without relying on specific businesses or products, so that is, business diversification. As a current result of this, their chemical business including fluorine now accounts for about 32% of the total sales. Recently, they are actively involved in M ​​& A for pharmaceutical companies. In August 2016, this company purchased the German biopharmaceutical company「Biomeva」and in 2017, they purchased the Danish biopharmaceutical company「CMC Biologics」.

 

 

 

3. Major Business

 

■ Glass business
This company are developing a glass manufacturing business centered on architectural and automotive glass.

■ Electronic display / electronic components

■ Chemical products

■ Ceramics and others

 

 

 

4. Financial information

 

※Unit is JPY million

		2016	2017	2018
Consolidated sales		1,282,520	1,463,532	1,522,904
Consolidated operating profit		96,292	119,646	120,555
Consolidated total assets		1,981,451	2,228,560	2,235,776
Consolidated net assets		1,168,743	1,289,895	1,253,604
Breakdown of sales	Glass business	679,071	733,953	756,160
	Electronics business	257,069	260,626	250,285
	Chemical business	314,392	435,145	482,097
	Others(including Ceramic business)	32,037	33,807	34,361