Asahi Glass Co.(5201.TO,ASGLY)has halted production at a solar-cell glass plant in Tennessee to prevent the build-up of excess inventory,the Nikkei reports in its Oct.8 edition.
The plant,in the city of Kingsport,has seen inventory swell to roughly four to five months'worth as local demand slumped due to the influx of cheap Chinese solar cells.About half the 120 employees at the facility have been laid off.
"We aim to reduce our inventory to around two months,"a company official says,adding,"We want to keep the production halt to within several months."
The world's No.1 glass maker will continue churning out glass for solar-cell substrates at its factory in Kansas.
Deteriorating demand for solar-cell glass,which contributed roughly 40 billion yen($508.5 million)in sales at the company for the year ended December 2011,comes at a time when the glass industry as a whole has been suffering from declining prices of liquid-crystal-display and construction glass.
Asahi Glass has already reduced its production capacity for building glass by more than 20%in Western Europe in response to weakening demand.
It is bracing for a roughly 40%year-to-year drop in group operating profit for the fiscal year through December.
The situation is more or less similar at Nippon Sheet Glass Co..The company has lowered production levels in the U.S.and Europe,but it may have to make further cuts because demand has not recovered in its mainstay European market.
