Corning Inc has announced that it will transfer the production of its Corning Gorilla Glass from its current manufacturing facility in Shizouka, Japan, to a facility in Asan, Korea. Corning expects to complete this transfer and close the east side of its Shizouka facility by June 2015. When Corning announced its strategic agreements with Samsung Display Co last October, resulting in the acquisition of Samsung Corning Precision materials Co - now Corning Precision Materials (CPM) - Corning explained that the transaction would deliver strategic and financial benefits to the company, including the ability to leverage under-utilised, low-cost CPM capacity in Asan 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 US$ 100M in 2015 and potentially increase in the future. A significant portion of these synergies is expected to come from the optimisation 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 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 Q4 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 added. "Restructuring actions are the most painful actions we take - we will put voluntary workforce reduction measures into place and provide contractor replacement and transfer options in Japan. Corning will treat its Japanese based employees with dignity and respect, consistent with our values, throughout this difficult time." Senior leaders from Corning had met with all of the company's Japan-based employees on 6 March to explain their decision and answer questions. Company representatives are in the process of reviewing the options and will work closely to address any concerns.
