Pilkington
Press Release On China Operations
The following is the text from Pilkington
Press
Release regarding their Automotive Operations in China
Date:
20/09/00
Reference: PR/81/00
PILKINGTON EXPANDS
AUTOMOTIVE OPERATIONS IN CHINA
Pilkington, and its affiliate Shanghai Yaohua Pilkington Glass Company
Limited (SYP), are expanding their automotive operations in China, with
the acquisition of the Ford Motor Company's 51% share of "Shanghai
FuHua Glass Company Limited" (FuHua), the largest automotive glass
company in the Shanghai area. FuHua is a major supplier of glass products
to Shanghai Volkswagen and Ford of Australia, and is located adjacent to
SYP's float plant in Shanghai.
Pilkington Group Chief Executive Paolo Scaroni said. "This is an
excellent opportunity to consolidate our leading position in the fast
growth Chinese automotive market. It is directly in line with our stated
strategy of growing our presence in developing economies where we can add
our technology and global experience. We will continue to look for further
strategic acquisitions in the Asia region, and China in particular, where
Pilkington has a strong position."
Following this acquisition, it is planned to rename the company
"Shanghai Yaohua Pilkington Autoglass Company Limited", and
restructure the ownership of the company to bring SYP in as the managing
partner of the venture. Pilkington will remain the technology-providing
partner to the company.
Pilkington is one of the world's largest suppliers of toughened and
laminated safety glass for cars, trucks and buses - one in four of the
world's cars contains Pilkington products. Supplying the world's leading
carmakers, Pilkington is expert in shaping and strengthening glass to meet
the complex requirements of today's cars.
Note to Editors
Pilkington in China
Pilkington began investing in China in the early 1980s. In 1983, the
Shanghai Yaohua Pilkington Glass Co Ltd (SYP) joint venture was formed
between Pilkington, the United Development Corporation (each of whom took
a 12.5% share) and three Chinese partners - the Bank of China, Shanghai
Yaohua Glass and China National Glass and Ceramics Industry Co. who
together held 75% of the shares.
SYP built a float glass production line in Shanghai, and started to
manufacture quality float glass in 1987 using the Pilkington float glass
process under licence from Pilkington. Pilkington brought both
technological and management expertise to the joint venture during its
early stages, and the 5000 tonnes a week plant was profitable by the end
of its second year of operation (1989).
In November 1993, SYP became the first joint venture company in China to
be floated on the Shanghai Stock Exchange in an offering to both Chinese
and foreign investors. The capital raised by this successful flotation was
used to build a second float glass plant in Shanghai (SYP2), which started
production in late 1995.
Each of the original investors' share holdings was diluted by one third as
a result of the share issue, and Pilkington's stake became 8.35%.
In late 1999, Pilkington acquired the shares previously held by UDI,
increasing the Pilkington stake from 8.35% to 16.67%. At this time, SYP
became an Associated Undertaking in the Pilkington Group.
In 1996 SYP opened an architectural glass-processing factory in Shanghai,
to support its float glass operations, producing laminated, toughened,
coated, mirrored and printed glass products. This factory became
profitable in its first year of operation, serving the booming Shanghai
construction market.
Pilkington believes that the market for flat and safety glass in China
will grow strongly over the next few years. Its strategy has been to
increase its commitment through investment in glass processing projects to
serve the automotive industry and in float plants to provide flat glass to
automotive processing plants and the building market. It is, at the same
time, continuing to support the expansion plans of SYP.
In pursuit of this strategy, between 1994 and 1996 Pilkington, together
with SYP, invested in three automotive glass joint ventures in Changchun,
Wuhan and Guilin, which between them are capable of supplying 600,000 car
sets a year. All three of these ventures are profitable, and are
successfully supplying the domestic Chinese auto makers, and also
exporting to North America and Europe, through the Pilkington sales
network.
The other shareholder in FuHua is Shanghai Building Materials Corporation,
which is also a shareholder in SYP.
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