Corning Incorporated (NYSE: GLW) today announced that it will transfer the production of Corning® Gorilla® Glass from its manufacturing facility in Shizuoka, Japan to its facility in Asan, Korea. Corning expects to complete this transfer and to close the east side of its Shizuoka facility by June of 2015.
When Corning announced its strategic agreements with Samsung Display Co., Ltd. last October, resulting in the acquisition of Samsung Corning Precision Materials Co., Ltd. – now Corning Precision Materials Co., Ltd. (CPM) – Corning explained that this transaction would deliver strategic and financial benefits to the company. These benefits include the ability to leverage underutilized, low-cost, CPM capacity in Asan, Korea, to produce both LCD display glass and protective cover glass for Corning’s customers worldwide. Corning is now pursuing this particular benefit through its plan to transfer Gorilla Glass production from Shizuoka to CPM.
“This transfer of production reinforces Corning’s belief, which we previously communicated, that the annual synergies anticipated with the acquisition of CPM can reach approximately $100 million in 2015 and potentially increase in the future. A significant portion of these synergies is expected to come from the optimization of Corning’s global manufacturing footprint, as in this transfer of Gorilla Glass production to CPM announced today,” James P. Clappin, president, Corning Glass Technologies, said.
“In order to accomplish this transfer to CPM and achieve these synergies, we needed a predictable demand outlook in Korea and, now that CPM has concluded agreements through 2014 with all of its major LCD customers, we believe that we have achieved this. We had previously announced in the fourth quarter of 2013 that our wholly owned business, which did not include CPM at that time, had renewed its customer agreements which also would continue through at least 2014,” Clappin remarked. “We expect that these customer agreements will help keep our total display share in 2014 consistent with our share in 2013, which will make demand for our display glass more predictable and allow us to deliver the anticipated synergies associated with optimizing our global manufacturing footprint while meeting our supply commitments for both display and cover glass.
“Restructuring actions are the most painful actions we take,” Clappin said, adding, “We will put voluntary workforce reduction measures into place and provide contractor replacement and transfer options in Japan. Corning will treat its Japan-based employees with dignity and respect, consistent with our values, throughout this difficult time.”
Senior leaders from Corning met with all of the company’s Japan-based employees on March 6 to explain this decision and answer questions. Company representatives are in the process of reviewing the options available to employees in the company’s Shizuoka facility and will work closely with them to address their concerns.
Forward-Looking and Cautionary Statements
This press release contains “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995), which are based on current expectations and assumptions about Corning’s financial results and business operations, that involve substantial risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include: the effect of global political, economic and business conditions; conditions in the financial and credit markets; currency fluctuations; tax rates; product demand and industry capacity; competition; reliance on a concentrated customer base; manufacturing efficiencies; cost reductions; availability of critical components and materials; new product commercialization; pricing fluctuations and changes in the mix of sales between premium and non-premium products; new plant start-up or restructuring costs; possible disruption in commercial activities due to terrorist activity, armed conflict, political or financial instability, natural disasters, adverse weather conditions, or major health concerns; adequacy of insurance; equity company activities; acquisition and divestiture activities; the level of excess or obsolete inventory; the rate of technology change; the ability to enforce patents; product and components performance issues; retention of key personnel; stock price fluctuations; and adverse litigation or regulatory developments. These and other risk factors are detailed in Corning’s filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the day that they are made, and Corning undertakes no obligation to update them in light of new information or future events.
About Corning Incorporated
Corning Incorporated (www.corning.com) is the world leader in specialty glass and ceramics. Drawing on more than 160 years of materials science and process engineering knowledge, Corning creates and makes keystone components that enable high-technology systems for consumer electronics, mobile emissions control, telecommunications and life sciences. Our products include glass substrates for LCD televisions, computer monitors and laptops; ceramic substrates and filters for mobile emission control systems; optical fiber, cable, hardware & equipment for telecommunications networks; optical biosensors for drug discovery; and other advanced optics and specialty glass solutions for a number of industries including semiconductor, aerospace, defense, astronomy, and metrology.