PPT

Optimum
Portfolio
Shrink
Focus
on Growth
Grow
Globalization and Cross-fertilization
in AGC Group
at
Hokkaido
University
Kamiya Masayuki
September 17, 2010
-0-
AGENDA
１． AGC Group Overview
２． Globalization of AGC Group
３． Globalization and Management Reform
４． Diversity and Cross-fertilization
５． Ongoing Challenges
-1-
AGC Group Business Overview
( )Forecast of FY2010
(Sales 13,000 oku yen, Operating Profit 2,000 oku yen)
Glass
Electronics & Display
Chemicals
Other
( 46%)
( 32%)
(20%)
(2%)
Flat Glass
Display
-Float flat glass
-LCD glass substrates
-Figured glass, Polished
-PDP glass substrates
wired glass
-Glass bulbs for
-Heat-absorbing glass
cathode-ray tubes,
-Heat-reflective glass
etc.
-Fabricated glass for
architectural use
（Insulating glass units, Security
glass,
Fire-resistant glass)
-Fabricated glass for industrial
Electronic Materials
use
-Glass for solar power system,etc.
Automotive Glass
-Laminated glass
-Tempered glass
Other Glass
-Lighting lamp glass
products
-Industrial glass product
etc.
2
-Optical filters for Displays
-Optical membranes
-Optoelectronics materials
-LCD backlight glass tubes
-Synthetic quartz glass
-Glass frit and paste
-Materials for semiconductor manufacturing
equipment etc.
Fluorochemicals
& specialty chemicals
-Fluorinated resins
-Water and oil repellents
-Battery materials
-Iodine-related materials,
etc.
-Ceramic products,
-Logistics and
financial
services, etc.
Chlor-alkali & urethane
-Vinyl chloride
monomers
-Caustic soda
-Urethane materials
-Gases
-Solvents, etc.
-2-
AGC Group Global Operation
Approx. 250 group companies in 27 countries
Sales：１１,４８２ oku yen (2009) , Group Employees： ４７,６００
North America
Japan
Europe
Asia
Sales： 765 oku yen Sales：2,361 oku yen Sales：4,180 oku yen Sales：6,586 oku yen
Employees：3,700
Employees：12,700
Employees：13,200
Employees：18,000
-Flat Glass
-Automotive Glass
-Electronic Materials
-Chemicals
3
-Flat Glass
-Automotive Glass
-Chemicals
-Flat Glass
-Automotive Glass
-Display Glass
-Electronic Materials
-Chemicals
-Ceramics
-Flat Glass
-Automotive Glass
-Display Glass
-Electronic Materials
-Chemicals
-Ceramics
-3-
Global Market Position
Flat Glass
No.1
No.1
No.1
No.1
Automotive Glass
AGC AGC
Group
当社
Group
ｻﾝｺﾞﾊﾞﾝ
+ ｾﾝﾄﾗﾙ硝子
Saint-Gobain
Group
Saint-Gobain + Central Glass
Nippon Sheet Glass
No.1 日本板硝子グループ
No.1
Nippon
Sheet Glass Group
Group
No.4 ガーディアン
No.4 Guardian
Guardian
：
：
No.1 AGC Group
65%
No.1 Saint-Gobain Group
70%
Sheet Glass
No.1 Nippon
Group
：
＊Exclude
China
Glass Substrate for LCD (TFT)
Glass Substrate for Plasma Display
No.1
Corning
No.1
AGC Group
No.2
AGC Group
No.2
Nippon Electric Glass
No.3
Nippon Electric Glass
：
4
-4-
Global Flat Glass Operations
AGC Glass Company’s
Headquarter located in Brussels
AGC Soda
[North America]
3 Float
USA 3
Coated Glass,
Processed Glass
Solar Glass
Solar BU
[Europe]
16 +2 Float
Belgium 5, France 2
Netherlands 1, Italy 2,
Spain 1
Czech 2+1, Russia 3+1
Coated Glass, Mirror
Processed Glass
[Japan / Asia]
15 Float plants
Japan 3, Indonesia 4
Thailand 3, Philippines 1
China 2, India 2*
Coated Glass, Mirror
Processed Glass
Solar Glass
36 float glass plants in the world (8 float lines in BRICs)
* subsidiary with minority share
-5-
Automotive Glass Operations
Automotive production bases spread across three regions,
Japan/Asia, North America, and Europe, in response to global expansion
and centralization of procurement by auto makers
[North America]
2 plants in 1 country
[Europe]
9 plants in 6 countries
Belgium, France, Italy
Czech, Russia, Hungary
[Japan/Asia]
11 plants in 8 countries
Japan, Indonesia
Thailand, India, China
Korea, Malaysia
Global Market Share: Approx. 30%
-6-
Display Glass Operations
Flat Panel Display Glass
Korea:
AFK (67%)
HTG (70%)
PGK (100%)
CRT TV Glass
Japan (Yonezawa):
AGFT (100%)
Korea: HEG (43%)
Japan:
Takasago,
Kansai, Keihin,
Aichi
China: HNH
(HEG100%)
China: SAE (40%)
Thailand: SAT (63%)
Taiwan : AFT(100%)
AGFT: Asahi Glass Fine Techno Co., Ltd.
AFT : Asahi Glass Fine Techno Taiwan Co., Ltd.
AFK : Asahi Glass Fine Techno Korea Co., Ltd.
HTG : Hanwook Techno Glass Co., Ltd.
PGK : Asahi PD Glass Korea Co., Ltd.
TFT Glass Substrate Manufacturing Base
TFT Glass Substrate Polishing Base
PDP Glass Substrate Manufacturing Base
PDP Glass Substrate Processing Base
Singapore : ATV (100%)
HEG : Hankuk Electric Glass Co., Ltd.
SAE : Shanghai Asahi Electronic Glass Co., Ltd. (to be sold)
HNH : Hunan HEG Electric Glass Co., Ltd.
SAT : Siam Asahi Technoglass Co., Ltd.
ATV : Asahi Techno Vision Pte.,Ltd.
Note: percentage in ( ) shows AGC’s shareholding
-7-
AGENDA
１． AGC Group Overview
２． Globalization of AGC Group
３． Globalization and Management Reform
４． Diversity and Cross-fertilization
５． Ongoing Challenges
-8-
History of Globalization
2005 Started Glaverbel Klin (Russia)
Europe &
America
2002 Wholly owned Glaverbel through TOB
1999 Acquired ICI’s PTFE business in the USA and UK
1998 Glaverbel acquired PPG’s flat glass operation in Europe
1997 Glaverbel acquired Bor Glassworks (Russia)
2006 Started AGC Flat
Glass Suzhou (China)
1992 Acquired AFG Industries (USA)
2000 Established Asahi Glass Fine
Techno (Taiwan) and
Wholly owned the 3 Thai affiliates
1999 Acquired Hankuk Electric Glass (Korea)
1985 Established AP Technoglass (USA)
1981 Acquired Glaverbel (Belgium) and
Maas Glass (Netherlands)
--- entry into Europe
1996 Established Video Display Glass Indonesia
1992 Established Dalian Float Glass (full-scale entry into China)
1989 Established Siam-Asahi Technoglass (Thailand)
1987 Established Asahimas Chemical (Indonesia)
1985 Established Asahi Techno Vision (Singapore)
1979 Established Asahi TV Glass (Singapore)
1972 Established Asahimas Flat Glass (Indonesia)
1964 Established Thai Asahi Glass, and THASCO Chemical (Thailand)
1956 Established The Indo-Asahi Glass (India)
Asia
1907 Foundation of Asahi Glass Co., Ltd.
-9-
AGC Group CEO Message
(at Brussels in 2001)

Worldwide deregulation and dramatic progress of
Information Technology has accelerated the consolidation
of its main markets, and intensified the global competition
at the pace faster than we had anticipated.

At the beginning of the 21st Century, faced with the
challenges of globalization, AGC Group wishes to become a
truly global and really multinational enterprise.

So far, the group's management of its businesses was
based on regional organizations, where each regional
member had their own set of values, vision, organization
and cultures.
-10-
AGC Group CEO Message (2)

Aiming to be more global and more reactive, AGC needs to
proceed through a merger of most of its organization
throughout the world, in order to share a clear vision
among units and to consolidate its world leader position.

There are different cultures and variety of multinational
human resources in our group and they are the most
valuable assets of the group.

Different cultures and diversity of people can sometimes
produce friction and conflict, but we must transform the
heat generated by the friction and conflict into the energy to
create the truly global enterprise by sharing the clear vision
among the people.
-11-
AGENDA
１． AGC Group Overview
２． Globalization of AGC Group
３．Globalization and Management Reform
４． Diversity and Cross-fertilization
５． Ongoing challenges
-12-
Globalization and Management Reform
Globalization presented special opportunities and challenges for AGC
group to review its whole aspects in AGC group’s management system:

Creation of Group Vision and redefinition of Business Domain

Reform of Corporate Governance system

Redefinition of Group Corporate function
• Authority, reporting, meetings between Corporate and Company
• Global leaders are nominated for global functions such as strategic
planning, finance, tax, group HR, IR/PR, global audit, etc.
(Global Tax leader is a Belgian)

Review of management structure and legal structure
-13-
Globalization and Management Reform(2)

What should be managed on global, regional and local basis in
each Global In-house Company
- Centralization and de-centralization -

Globalization promoted exchange of resources and crossfertilization in all aspects of activities:
- Marketing, R&D, Production, Engineering, Procurement, Finance, IT,
Tax, HR,

Communication is not always easy among the people with
different languages, history, culture but, it is a key for success.
- People are strongly influenced by certain structural characteristics
and patterns of thought to their own language -
-14-
“Our Mission”
We, the AGC Group,
to make the world a brighter place.
The value we bring to the world = “Brightness”

Flat glass as used in buildings and automotive windows:
- lets bright light into our lives,
- enables us to brightly view the world around us.

Display materials and components:
- gives us bright images and enhances communications.

The Group’s bright (intelligent and innovative) technologies:
- will contribute to the advancement of the information society
and new types of energy in the 21st Century.
-15-
“Our Shared Values”
Our four Shared Values are to be adopted and followed by all
members of the Group and are of the foremost importance in
accomplishing Our Mission.
These Shared Values will serve as the basis for every judgment we
make and action we take collectively and individually.
Sources of
the Group’s
Competitive
Advantage
Pillars that Support
the Group as
a Global Enterprise
Innovation & Operational Excellence
Diversity
Environment
Integrity
-16-
Basic Concept of Governance
“Group” management, regardless of the frame of legal entity, such as parent/subsidiary (to be
applied to the both A and B below)
A. To clearly separate “oversight” and “execution” of management
B. To clearly separate “group corporate” function and “business operating” function
“Oversight”
of
management
Capital Market
Investment
Return
Board of Directors (“BOD”)
A
Group Corporate
“Execution”
of
management
“Group
Corporate”
function
Imaginary Capital Market
Investment
In-house
Company
B
Return
In-house
Company
“Group” as a whole
In-house
Company
“Business
Operating”
function
-17-
How shall we measure the performance?
EBIT
Net Profit
-18-
Succession Plan of Global Top Positions
Examples of Succession planning variation
External
human
Resource
Recruiting
from outside
(e.g.
headhunting)
Successor
Internal human resource
Global
Top
Positions
Top
layer
CEO
Flat glass
company
Auto glass
company
Company
President
Chemical
company
Display
company
If there are no adequate successors in the
organization, CEO has the right to recruit next
company president and top of corporate functions
from outside.
CEO nominates
and decides the
successor of global
top positions
nomination
nomination
nomination
Successor
Successor
High
Potentials
layer
Global Top
Positions in
Corporate
nomination
nomination
CEO can nominate
the successor of
global top positions
from other companies
CEO can decide next
company president
without company’s
agreement.
Successor
Successor
CEO can nominate
the successor of
global top positions
from the high
potentials layer.
CEO can appoint
someone by gradeskipping.
(acceleration of promotion)
Information of both Top and High Potentials
layers must be disclosed in advance to the
group CEO.
-19-
AGENDA
１． AGC Group Overview
２． Globalization of AGC Group
３． Globalization and Management Reform
４． Diversity and Cross-fertilization
５． Ongoing challenges
-20-
Evolution and Cross-fertilization
(Dr. Hama, Principal Researcher, R&D）

When a living organism mates with another, their genes are exchanged,
allowing them to produce diverse new offspring. This enables them to
survive a variety of environmental changes, and at the same time,
“evolution” has proceeded at a dramatic speed.

Thus, “preservation of diversity” and “cross-fertilization” is essential for the
survival of living things.

Bacteria simply reproduces itself by self-division, so that its DNA does not
change and evolution cannot take place. Thus, it can repeat reproducing
itself forever.

On the contrary, higher organisms can produce new offspring by sexual
reproduction. Their DNA is linear and capable of recombination with
another to produce a new offspring. This has led these organisms to go
through the evolution to human beings.
-21-
Evolution and Cross-fertilization （2
）

After all, living organisms have chosen “diversity,” “adaptation to
environment” and “evolution”. Individual organisms have limited life span,
but the species are maintained through alternation of generation, and it
evolves and changes in a long run.

Without mating with another, evolution would not have been accelerated.
The process of accepting something foreign, producing something new,
overcoming environmental changes and ultimately advancing can be
compared to evolution of living organisms. Living organisms need to retain
genes that look useless in order to maintain diversity. Human beings appear
to have many such genes.

This idea may be applied to a variety of fields, such as research, business
and culture. When we focus on one thing, we should still maintain the
possibilities for diversity rather than excluding all the others. Otherwise, we
may run the risk of extinction when our environment changes drastically.
-22-
AGENDA
１． AGC Group Overview
２． Globalization of AGC Group
３． Globalization and Management Reform
４． Diversity and Cross-fertilization
５． Ongoing Challenges
-23-
Ongoing Challenges





What should be managed on global, regional and local basis by
Company or Corporate?
•
Authority, approval rules, reporting, meetings
•
Centralization and decentralization
Implementation of redefined Group Corporate function and
regional shared services
Global HR management system
Group brand integration
Communication is not always easy among the people with
different languages, history, culture
Adventure continues…
-24-