Reduction Of CRT Glass Production Capacity

This decision is in line with the Company’s policy  to continuously downsize the CRT glass business to improve profitability of this business as part  of an important measure for “JIKKO-2007,” the three-year medium-term management plan  started in 2005.



The Company projects demand for CRT glass used in personal computers and televisions will  drastically decline to about 120 - 130 million units for the fiscal year ending December 2007,  from around 200 million units in fiscal 2006, due to a rapid shift towards flat panel displays like  TFT LCDs. Profitability of the Company’s CRT business deteriorated, hurt by a fall in sales volume, a drop in sales prices and a surge in the costs of raw materials and fuel.



Due to such decline in demand for CRT glass, the Company has executed various measures to  improve profitability, including the withdrawal from CRT glass production in Japan, Indonesia  and Taiwan, but also decided to restructure its production system because such decline is  expected to continue in the future too. Under this restructuring plan, the Company will reduce  its CRT glass production capacity by about 40% by stopping all operations in Singapore (Asahi  Techno Vision (Singapore) Pte., Ltd., one panel production furnace) and Thailand (Siam Asahi  Technoglass Co., Ltd., one panel production furnace, one funnel production furnace). As a  result, the Company’s CRT glass production capacity decreased about 70% from 2004 when the  Company had the largest capacity for such production.



The Company will continue panel and funnel production in China and South Korea for its CRT  glass business.