Glaverbel Group

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Glaverbel Group

Chaussee de La Hulpe 166
Bruxelles, Belgium
Telephone: (32) 02 674 31 11
Fax: (32) 02 672 44 62
Web site: http://www.glaverbel.com

Wholly Owned Subsidiary of Asahi Glass Company
Incorporated: 1961
Employees: 16,600
Sales: EUR 2 billion ($2.5 billion) (2004)
NAIC: 327211 Flat Glass Manufacturing

Glaverbel Group is one of the world's leading producers of raw and processed glass. The company ranks in the world top three and, thanks to early investment in the Czech Republic and Russia, is also the leading producer of glass in Eastern and Central Europe. Based in Belgium, Glaverbel produces glass for the architectural and design markets, as well as for the marine glazing market. The company is also a leading producer of automotive glass, through subsidiary AGC Automotive Europe, formerly known as Splintex. Glaverbel operates production facilities and subsidiaries in Belgium, The Netherlands, France, the United Kingdom, Italy, and Spain in Western Europe, and in the Czech Republic, Poland, and Russia in Central and Eastern Europe. Glaverbel itself has been wholly owned by Japan's Asahi Glass Company since 2002. The company is led by Chairman Arthur Ulens. Glaverbel's sales top EUR 2 billion ($2.5 billion) in the mid-2000s.

BELGIUM GLASSMAKING CONSOLIDATION IN 1961

French-speaking Belgium's involvement in the glassmaking industry stretched back to Roman times. Into the 21st century, the region remained one of the global glass centers, representing some 20 percent of the total world production. The outlines of the modern industry began to appear as early as the 14th century, when glassmaking became the specialty of a small number of families. This led later to the development of industrial glass production in the late 17th century. Already by the mid-1800s, the region boasted the largest number of glass furnaces in Europe. The region's position was further boosted with the invention of the Fourcault mechanical manufacturing process in 1902, which in large part replaced manual glassmaking techniques. By then, more than 85 percent of the glass produced in Belgium was sold internationally.

Yet the increased use of industrialized production techniques and the collapse of the global economy forced a shakeup in the Belgian glassmaking sector at the beginning of the 1930s. The result was a first consolidation of the industry, creating two major companies. The first of these was L'Union des Verreries Mécaniques de Belgique, or Univerbel, created in 1930. The second, S.A. Glace et Verre (Glaver), was founded just one year later.

The companies remained competitors in the postwar period, as the country's glass industry contributed to the country's reconstruction. The massive worldwide demand for glass—particularly strong in devastated Europe—further boosted both Univerbel and Glaver. By the 1950s, Belgium had become the world's largest glass producer. Later in that decade, Univerbel and Glaver joined together in helping to set up a glassmaking factory in Tiel, The Netherlands, which began construction of a glassmaking factory in 1959 under the name of Machinale Glasfabriek De Maas.

Yet the invention of a new glassmaking technique—the "float" method developed by Alistair Pilkington in the United Kingdom—in the late 1950s brought a new crisis in the industry. The new technique, which involved floating molten glass on top of liquid tin, cost less and produced a glass superior to the traditional grinding and polishing methods of producing sheet glass. Float glass quickly became the new industry standard, forcing companies such as Univerbel and Glaver to shut down their existing furnaces and replace them with new float production equipment.

To remain competitive, therefore, Univerbel and Glaver agreed to merge in 1961, creating a new Belgian glassmaking giant, Glaverbel. The new company also included De Maas, which launched production at the Tiel facility in 1964. That subsidiary later became known as Maasglas.

In the meantime, Glaverbel had begun investing in its own float glass technology, and in 1965 opened the first such factory in continental Europe, in Moustier, Belgium. The opening of the new plant helped Glaverbel weather the grueling economic difficulties of the industry through the 1960s. Nonetheless, the company continued to rely heavily on its increasingly outdated sheet glass furnaces. Into the 1970s, the economic crisis battered the company, as well as the rest of the European glassmaking industry.

NEW OWNERS IN 1981

In 1972, Glaverbel was taken over by France's BSN. Later known as Danone, the company was then one of the two largest glass manufacturers in France, created through the merger of Boussois and Souchon-Neuvesel in 1966. BSN had initially attempted to take over its French rival Saint Gobain, which was also struggling heavily into the 1970s. When that effort failed, the company instead acquired Glaverbel.

The development of still more efficient float glass technology in the early 1970s brought new stress on Glaverbel. Faced with the urgent need to shut down its sheet glass furnaces and convert its production to the new technology, Glaverbel was further hit by the deepening economic recession of the period. As a result, Glaverbel slipped into deep losses by 1975.

The company's losses forced it to undertake a restructuring in 1977. At the same time, Glaverbel adopted a new strategy that called for the company to integrate vertically, adding flat glass processing operations. As part of that effort, the company acquired automotive glass maker Splintex, based in Gilly, in Belgium, founded in 1929. Glaverbel also launched a research and development effort, in part to develop more energy-efficient glass products. The company's success in this area allowed it once again to take its place at the forefront of the industry. Glaverbel also expanded its Splintex division, adding a new tempering plant in Fleurus in 1979.

By the late 1970s, BSN, which also had been developing operations in the processed foods and beverages industry, decided to focus its operations on these markets. The company sold parts of its glassmaking empire to the United Kingdom's Pilkington. Yet Pilkington was not allowed to acquire Glaverbel for antitrust reasons. Instead, BSN found a buyer in Japanese glass major Asahi Glass Company. In 1981, Asahi acquired 80 percent of Glaverbel; by 1983, the Japanese company had taken full control of the Belgian company.

With Asahi's backing Glaverbel continued its expansion through the 1980s. In 1984, for example, the company's De Maas subsidiary opened a new float glass factory in The Netherlands. The Dutch subsidiary then changed its name, to Maasglas.

COMPANY PERSPECTIVES

The Vision and Mission of the Glaverbel Group: "Look Beyond" together; To make the world a brighter place. There are four values shared by all the members of Glaverbel Group in carrying out its mission, namely: Innovation & Operational Excellence, Diversity, Environment and Integrity.

Asahi took Glaverbel public in 1987, listing the company on the Brussels Stock Exchange. The public offering of 35 percent of Glaverbel set the stage for a new growth period for the company, and particularly its emergence as an international glass production leader. Glaverbel initially targeted the U.S. market. In 1988, the company acquired nearly 20 percent of AFG Industries, formerly part of Saint Gobain, which was then the second largest flat-glass manufacturer in the United States. By the beginning of the 1990s, Glaverbel and Asahi Glass had together acquired full control of AFG.

In 1990, Glaverbel also entered Canada, joining with two institutional investors to build a float glass manufacturing plant. Glaverbel held 72 percent of that company, Glaverbec. In 1993, Glaverbel bought out its partners in Glaverbec, which was then merged into AFG Industries. The following year, Glaverbel sold part of its share of AFG to Asahi.

GLASS LEADER IN THE NEW CENTURY

Glaverbel's exit from the AFG partnership was inspired by its success elsewhere. In 1990, the company became the first western glass manufacturer to enter the Eastern Bloc region with the acquisition of 40 percent of state-owned Sklo Union's sheet glass division. Glaverbel continued to build up its position in that operation, which was renamed as Glavunion, and later Glaverbel Czech. By 1992, the company controlled 67 percent of the Czech glass group, and by 1994 had increased its stake to 74 percent. By the end of the decade, Glaverbel had acquired full control of the Czech subsidiary. The new operation, located in the Bohemia region, placed Glaverbel close to the German and Austrian borders, providing a strong export market for the Czech operation. The purchase of the Sklo Union also boosted Glaverbel's automotive glass operations; following the acquisition, the Czech auto glass division took on the new name of Thorax.

By 1996, Glaverbel had reoriented its strategy, targeting its growth in Europe, especially in Eastern and Central Europe. As a result, the company sold the rest of its stake in AFG Industries to parent company Asahi Glass.

Soon after, Glaverbel found a new acquisition target, that of Bor Glass Works in Russia. The company initially acquired a 44 percent stake in Bor, for $15 million. The purchase made Glaverbel the first Western group to invest in the predominantly underdeveloped Russian glass market, and as such the company was able to establish a clear leadership position as that market took off in the 2000s.

KEY DATES

1930:: The merger of several Belgian glass producers creates Univerbel.
1931:: Glaver is created through the merger of a second group of Belgian glass producers.
1959:: Glaver and Univerbel cofound the De Maas glass factory in Tiel, The Netherlands.
1961:: Glaver and Univerbel merge and form Glaverbel.
1965:: Glaverbel opens its first float glass production facility in continental Europe.
1972:: BSN acquires Glaverbel.
1975:: Glaverbel acquires Splintex, an automotive glass producer, as part of a diversification strategy.
1981:: The Asahi Glass Company of Japan acquires 80 percent of Glaverbel.
1983:: Asahi acquires 100 percent of Glaverbel.
1987:: Glaverbel is listed on the Brussels Stock Exchange.
1988:: Glaverbel acquires a stake in AFG Industries in United States.
1990:: The Glaverbel joint venture is established in Canada; a stake is acquired in the glass production operations of Sklo Union in the Czech Republic.
1996:: The company sells its stake in AFG to Asahi and refocuses on the European market.
1997:: The company acquires 40 percent of Bor Glass in Russia.
1999:: Eijkelkamp is acquired in partnership with Akzo Nobel Coatings in The Netherlands.
2002:: Asahi acquires full control of Glaverkamp and refocuses the company as its European flat glass operation.
2005:: Glaverbel boosts its stake in Bor Glass to 83 percent; a new factory is built in Klin, near Moscow.

Glaverbel's next expansion efforts came closer to home, when in 1998 it agreed to acquire the European operations of the United States' PPG Glass Industries. The $240 million purchase gave Glaverbel a new network of factories in Europe, mostly focused on Italy and France. As a result of the PPG Europe purchase, Glaverbel doubled its market share in Europe. The following year, the company joined with Akzo Nobel Coatings to acquire Eijkelkamp, a distributor of float glass and decorative coatings based in The Netherlands. As the company entered the new decade, it shifted its expansion focus to capital investment. In 2000, for example, the company began construction of two float glass facilities in Belgium and in the Czech Republic. Glaverbel also entered Spain, establishing a joint venture with Pilkington to build a float plant in Sagunto.

The difficult economic period, coupled with an oversupply in the Eastern Europe market, slowed Glaverbel's growth, however. At the same time, the consolidation of the global glass market over the previous decade had encouraged Asahi to restructure its own global operations. In order to carry out this restructuring, Asahi moved to reacquire full control of Glaverbel. By 2002, that process was completed, and Glaverbel's listing was removed from the stock exchange.

With Asahi in full control of the company, Glaverbel was refocused as its Japanese parent's European flat glass operation, which was extended to include operations in Poland as well. As part of this restructuring, Glaverbel's automotive glass businesses were regrouped into a single entity, renamed as AGC Automotive Europe in 2004.

Glaverbel continued to build up its position into the middle of the decade. At the beginning of 2005, the company increased its stake in Bor Glass to 83 percent. By then, the Russian company had received some $100 million in investment since its takeover by Glaverbel. In October 2005, the Russian unit was boosted again with the opening of a new glass plant in Klin, near Moscow. That unit, operated by Glaverbel Czech, represented an investment of more than EUR 160 million. The new plant confirmed Glaverbel's position not only as leader in the fast-growing Russian glass sector but as Europe's leading producer of flat glass.

PRINCIPAL SUBSIDIARIES

A.I.V. (France); Agc Automotive Europe (France); Bor Glassworks (Russia); Bradley Glass (U.K.); Daver (France); Eijkelkamp (Netherlands); Energypane; Gedopt; Glacisol (France); Glaverbel Athus; Glaverbel Balticglav (Poland); Glaverbel Barevka (Czech Republic); Glaverbel Batiglav (Czech Republic); Glaverbel Cordoba (Spain); Glaverbel Cuneo (Italy); Glaverbel Glavcentrum (Czech Republic); Glaverbel Glavdas (Czech Republic); Glaverbel Glavetron (Czech Republic); Glaverbel Iberica (Spain); Glaverbel Jumet; Glaverbel Klin (Russia); Glaverbel Kwarcglav (Poland); Glaversun Industries (Italy); Guardiola (Spain); Kempenglas; Miroiterie Hirtz (France); Mirox; Schott Industrial Glass (Jv; U.K.); Schott-Glaverbel Do Brasil (Jv; Brazil).

PRINCIPAL COMPETITORS

Compagnie de Saint-Gobain; CRH plc; Madhvani Group; PPG Industries Inc.; Pilkington plc; Corning Inc.; Guardian Industries Corporation; Nippon Electric Glass Company Ltd.; Nippon Sheet Glass Company Ltd.; Andersen Corporation; KCC Corporation; Central Glass Company Ltd.; Oluwa Glass Company plc.