The company said on May 11 its intention of investing US$ 347 million to repurpose and restart an idle glass plant in Vietnam and to build one in the US in the next three years. The decision marks the company's biggest capital spending since 2000.
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The Vietnam plant is scheduled to reopen as soon as mid-2019. It originally produced glass for liquid crystal displays but was shut down in 2016 as intense competition from rivals like Asahi Glass and Corning undercut profitability.
The US project supports a long-term supply agreement with thin-film photovoltaics (PV) major First Solar Inc, which is expected to start in the second half of fiscal 2020.
Nippon Sheet Glass expects global solar demand to grow by double-digit percentages every year in the next three years.
First Solar, which according to Global Data held a share of 2.64% of the global market in 2017, in April unveiled plans for the construction of a 1.2-GW factory for its Series 6 modules in Ohio in addition to existing facilities. The decision is due to strong demand in the US.
Nippon Sheet Glass will sign a long-term supply agreement with First Solar, which holds about 5% of the global solar panel market and is rapidly raising output in the U.S. and Asian countries like Malaysia. The completed panels are likely to be used for such projects as massive solar power plants in the U.S. and Asia.
Major U.S. multinationals like Coca-Cola and Procter & Gamble have promised to switch from fossil-fuel-based power to renewable energy in line with the United Nations' Sustainable Development Goals. European companies are moving the same direction, while in Asia, China and India are leading a rush of construction of solar and other renewable power plants.
Nippon Sheet Glass' output increase seeks to capitalize on this trend. Other materials makers are also investing in renewable-energy-related production. Japan's Toray Industries decided in April to spend about 14 billion yen on a new Hungarian facility that produces carbon fiber for wind turbines.
Nippon Sheet Glass had focused on restoring its financial health since the global financial crisis, when the financial burden from its 2006 acquisition of far larger British glassmaker Pilkington became a weight on earnings. That deal sought to transform Nippon Sheet Glass into a global company.
