Asahi Glass sees net profit doubling in 2007

Asahi Glass Co. Ltd. , Japan´s largest glass maker, said it expected its net profit to double in 2007 due to strong demand for glass used in flat panel displays and an end to losses on glass for tube TVs. The company, which competes with Corning Inc. and Nippon Sheet Glass Co. , also announced plans to shut a sheet glass factory in New Jersey due to a slowing United States housing market and rising costs for fuel such as natural gas.

Group net profit at Asahi Glass slid 25 percent to 45 billion yen ($373 million) in 2006 due mainly to a 46 billion yen special loss to dissolve overseas subsidiaries and other restructuring steps in its loss-making cathode-ray tube (CRT) business.

Asahi Glass President Masahiro Kadomatsu told a news conference that he would not hesitate to pull out of the CRT glass business if it continues to lose money, though he is aiming for a recovery this year. "If it cannot produce profits, we will have no other choice than to withdraw," Kadomatsu said.

Asahi Glass is shifting focus to glass used in flat panel displays, reflecting a growing trend among consumers to trade in their boxy tube TVs for sleeker flat screen TVs. The company said it aims to post a net profit of 90 billion yen in 2007 on sales of 1.67 trillion yen, up 3 percent.

However, the profit forecast fell short of a consensus forecast of 105 billion yen in a poll of 14 analysts by Reuters Estimates. Kadomatsu also said he wants to expand in new business areas such as glass used for solar cells as the company believes it is risky to depend too much on its flat panel business, which is expected to account for more than 60 percent of operating profit in 2007.

He said the solar cell business requires high technological skills and is one way the company could distinguish itself from low-cost Chinese competitors, which are causing it headaches in some products, especially sheet glass. "We don´t know if this (solar cell business) will become part of our core business, but we hope to expand it," Kadomatsu said.