Asahi Glass

Asahi Glass Company (AGC) is one of the world's largest manufacturers of glass and speciality chemicals, with a turnover of around US$12 billion.

In 2005, it announced its chemicals division was to invest £15m in a new chemicals plant in Thornton Cleveleys, Lancashire.

The UK arm of the chemicals division, Asahi Glass Fluoropolymers UK (AGFP UK), already employs 135 people at the same site, where it produces 'Fluon' PTFE, a fluorinated resin.

The new investment is to build a second facility to manufacture ETFE, another fluorinated resin from AGC's range, used in sectors such as aerospace, construction and automotive. Asahi Glass ETFE film, for example, was used in the roof panels of the Allianz Arena football stadium in Munich, one of the main stadiums in the 2006 World Cup.

Asahi Glass is already the largest manufacturer of ETFE in the world, with two production plants in Japan. However, the facility in Lancashire will be the chemical division's largest investment outside Japan since it acquired part of ICI's European and US business in 1999.

"It is part of the company's overall development strategy. ETFE is a growing market and a new plant outside Japan is a response to increasing international demand, not only in Europe, but in the United States and elsewhere," says Takashizu Minato, CEO of AGFP UK.

The manufacture of ETFE is dependent on TFE monomer, so the new investment had to be adjacent to an existing PTFE plant. Potential sites therefore included all Asahi Glass's existing PTFE facilities in Japan and the US, as well as the UK.

After a thorough international assessment, the company identified Thornton Cleveleys as the best opportunity for the investment.

Key strategic benefits included the immediate availability of land on which the new facility could be constructed; well-developed existing channels to market in Europe and the USA; and a strong customer base which was currently importing ETFE from Japan.

Moreover, Minato explains that as well as the global strategic benefits of the UK, there were a number of regional, softer issues that makes Lancashire an attractive choice for the new facility.

He says that the strength of the chemicals sector in the Northwest in particular provides a significant base of expertise and labour that the company can capitalise on.

"It is a very technical industry. We are not looking for a large labour pool, but we do need a highly skilled labour pool. Many of our employees are at degree and PhD level. The Northwest, with its strength in the chemicals industry, not to mention the number of leading universities, meets that need," says Minato.

He adds that the local university base provides opportunities for collaboration on short term research projects and the lower living costs of the Northwest compared to many other regions also made it easier to attract skilled chemicals professionals to the region.

In addition, production costs in Lancashire are generally lower than in the USA and the infrastructure of the Northwest, particularly its good rail links and the two major airports at Manchester and Liverpool, provide easy access to the company's global markets.

Minato says that local agencies such as Wyre Borough Council, Lancashire Economic Partnership, the Northwest Development Agency and Chemicals Northwest, were very supportive throughout the project's planning stage.

"They were of great assistance in securing planning approval and provided valuable guidance in environmental issues and on progressing the application," he says.

Once planning permission had been obtained, construction of the plant began in February 2006, with completion anticipated for early 2007.

At full production rates, the facility will significantly increase the company's global ETFE capacity. But with the world market for ETFE growing at around 5% per year, Minato says that more capacity could be needed within four or five years.

"We'll be pushing hard for that potential extra investment to come to the Northwest, as well," he says.