JAPAN - As Japan Works to Recover from Recent Earthquake, So, Too, Do NSG and AGC
March 14, 2011

The earthquake that struck the coast of Japan on Friday, March 11, devastated much of the country. Cities and towns have been destroyed, and, according to the Wall Street Journal an estimated 3,400 buildings were partially or completely destroyed with damages estimated to likely be in the trillions of yen.

Still, the country is slowly working to recover, and so too, are two of the world’s largest float glass manufacturers—Nippon Sheet Glass (NSG), which owns Pilkington North America, and Asahi Glass Co. (AGC), parent of Asahi Flat Glass North America, both based in Japan. Both companies were affected as a result of last week’s earthquake and are now working to recover.

NSG reported that it none of its employees are missing or injured. At its Chiba Plant, Ichihara city, Chiba prefecture, the company says it has confirmed that none of the three glass furnaces there sustained any significant damage. “The operations of these three furnaces were suspended immediately after the earthquake, but we are now working on to resume operations one by one,” NSG reported.

As far as NSG’s other sites in the Tohoku (Northern) and Kanto (Eastern) regions, none of its facilities and equipment sustained any significant damage at the sites in the affected regions. Due to power outages, however, some operations are now being suspended at some of these locations. The company adds that there have been damages to glass stock in warehouses and at sites in the affected area.

NSG reports that the potential financial impact of the earthquake on its performance is still unknown. “However, if circumstances arise that call for any change to our current financial outlook, we will implement timely disclosure,” NSG says.

Kazuhiko Ishimura, president and chief executive officer of Tokyo-based AGC, also issued a statement on the impact that the earthquake has had on AGC operations. He says the company is in the process of confirming the safety of its group members and “it has been reported that several employees have been slightly injured.”

A number of the company’s facilities have been heavily affected by the earthquakes and tsunamis. The damage situation in the Tohoku area (northern part of Japan) is very serious, and operations not listed below might also be affected depending on the electrical power supply and lifeline utilities in the region:

  • AGC Asahi Glass Kashima Plant (Kamisu, Ibaraki prefecture): Float glass facility for architectural flat glass has been partially damaged. Production operations have been suspended and it is expected to take approximately one month to restart the production. The loading berth used for the shipments of architectural float glass and the receiving of raw materials has been damaged, and it is expected to take time to restore the facility.
  • AGC Asahi Glass Chiba Plant (Ichihara, Chiba prefecture): While access restriction has been imposed in the area due to the ongoing fire on the premises of neighboring Cosmo Oil Co. Ltd., AGC is currently working on the confirmation of the status of the plant facilities.
  • AGC Display Glass Yonezawa (Yonezawa, Yamagata prefecture): There is no critical damage to the building facilities of AGC Display Glass Yonezawa, which processes small/mid-sized LCD glass substrates, and production operations are resuming accordingly. Meanwhile, among the company’s outsourcers that handle a part of its processing operations, some building facilities have been severely damaged, and urgent restoration work is underway.
  • AGC Electronics Koriyama Plant (Koriyama, Fukushima prefecture): The production facility has been partially damaged, and restoration work is currently underway.

Other than the above locations, production has been suspended at some of the plants for architectural processed glass in the Tohoku/North Kanto region due to the damage to facilities or raw materials (i.e. flat glass), or their employees not being able to go to the plant. At this moment, it is not clear when operations will resume.

Ishimura also provided an outlook concerning shipments. For glass products, until the operations of AGC Kashima plant resume, AGC will allocate existing inventories and shipments from its other plants in and outside the country and “make the utmost effort to prevent a supply shortage of architectural glass.”

As far as the company’s electronics business, the impacts of the earthquakes and tsunamis have been limited to small/mid-sized LCD glass substrates, and it is considered that impacts on AGC Group’s overall flat panel display business will be limited.

In its chemicals business the loading berth at the AGC Kashima plant has been damaged and it is not clear when production will resume. Regarding the AGC Chiba plant, the company is in the process of confirming the status of the facilities, but the restart of the plant operations from the annual shutdown is expected to be delayed.

The company says that in consideration of the ongoing serious electricity shortage, the AGC Group will cooperate in the nationwide electricity-saving efforts by reducing electricity use and implementing operation adjustment at its plants.

While reconstructing the areas of Japan impacted by the earthquake and tsunamis will be costly, news reports also note that, thanks to the country’s stringent building codes, damages were far less than what they could have been. Since the Kobe earthquake in 1995 Japan has invested heavily into new research on protecting structures, as well as retrofitting the country’s older and more vulnerable structures. A New York Times report points out that extra steel bracing, giant rubber pads and embedded hydraulic shock absorbers make modern Japanese buildings among the sturdiest in the world.

A U.S. organization called InterAction has set up a website through which donations can be made to support the relief effort in Japan following the recent earthquake and tsunami. If you’d like to respond and/or donate to the cause, click here. InterAction is an alliance of United States-based international non-governmental organizations.

Stay tuned to USGNN.com™ this week for more updates and reports.

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