Issue: Mar 2006


Fuyao Glass Industry Group Co a leading manufacturer of automotive and industrial glass



Automotive Industries speaks with FUYAO's new chief executive officer, Dr. Xiaozhi Liu and the company founder and chairman, Mr. Cho Takwong

by Alan Tran

The Fuyao Glass Industry Group Co., is China's leading manufacturer of automotive and industrial glass. Head-quartered in Fujian, China, Fuyao Glass controls more than 60% of the automotive original equipment manufacturer market (OEM) and 30% of the replacement market in China. Its client roster include some of the world's leading automotive companies like GM, Ford, Honda, Isuzu, Toyota, Mazda, Volkswagen and Mercedes.

The company has a huge range of automotive glass - nearly 20,000 types of products are sold both domestically as well as internationally. Fuyao Glass exports to North America, Asia, South Africa, Middle East, Australia, Russia and Europe. In the early 21st century, the company had to face anti-dumping charges in the United States - a case Fuyao Glass eventually won.

Fuyao Glass manufacturers the following types of glass for the automotive sector - laminated glass, tempered glass, insulated glass, encapsulated glass, bullet-proof glass, water repellent-treated glass (used for automotive windshields, side and back windows as well as side view mirrors). The other types of glass the company manufactures for are - antenna glass, head-up display windshields - which are used by the military for fighter jets, acoustic glass (which sound-proofs passengers in cars from external noise), Low-E glass, on-line reflective glass, solar control glass, heating glass. Plus, Fuyao Glass manufactures silver mirrors which use state-of-the-art Kloepper's fully automatic chemical silver coating mirror for silver mirrors which have clear images and neutral reflection.

Last year, Fuyao Glass launched three new float glass production lines, spending nearly US$250m for the latest equipment and technology. These three production lines have a capacity to manufacture 500,000 tons of float glass annually. Fuyao used to import nearly 70% of its float glass requirements for the automotive glass every year.

Therefore, the company plans to build another two float glass production lines bringing the figure to seven by 2007.

Fuyao Glass has six manufacturing bases - in Fuqing, Changchun, Shanghai, Chongqing, Beijing, and Guangzhou. It uses the latest technology including CAD, CAM and 3-D measurement for design and research and development. All of the company's products have quality certifications such as the American DOT certification and the European ECE certification. Plus it has the Australian SAA quality certification and the Chinese GB9656 certifications. Fuyao also has the ISO 9002, the QS 9000, VDA6.1, ISO 14000 and the TS 16949 certifications.

Fuyao Glass has 8000 employees in China, Hong Kong and the United States. Recently, the company got a new chief executive officer, Dr. Xiaozhi Liu. Automotive Industries caught up with the company founder and chairman, Mr. Cho Takwong, and asked him about the companys plans.

AI: Do you see your domestic business continue to grow as rapidly as it has in the past few years? If so, by how much do think the market will grow by?

Answer: As far as I can see the domestic business will continue to grow as rapidly as it in the past, at least for about 10 years to come. First, to proceed from the Chinese market, it expands. Say, we had 30-40% growth in the past and even just 10% growth annually from now on, it will be bigger than the past. Secondly, to view from the international market, Fuyao enjoys an optimistic OEM market internationally. Fuyao is identified with the world top automotive companies and there are opportunities for Fuyao to supply globally. After all, Fuyao has its production bases in China and providing the same quality it will have certain advantage of costs. Thirdly, by nearly 20 years growth, Fuyao itself has fostered capabilities for rapid growth. The employees of Fuyao are growing up and become matured and they are the prerequisite for the development.

AI: How do you see your international business growing?
Answer: Generally, we are optimistic in our international business growing. We have had 10 years of international business development, learned the international practice and gained experience. We are assimilated with the business culture and language of the international society. As the global competition becomes more and more fierce, manufacturers are more stringent with the costs. Fuyao, being a Chinese corporation, has the advantage over the costs and the price competitiveness under the same quality conditions.

AI: Which automotive product in your stable brings in the most revenue? And will this pattern continue?

Answer: I think it's the OEM supply for the passenger cars and it will continue.

AI: Who are your biggest competitors and are they a threat in the Chinese market?

Answer: Doubtlessly, the competition is the five leading companies, Asahi, Saint-Gobain, Pilkington, PPG, and Guardian. Three of them have their plants in China at present. However, they are not a threat in the Chinese market. Fuyao is a local Chinese company having advantages in respect of its labor costs and recognition of the Chinese politics, economy, humanism, and culture.

AI: Do you think you will set up manufacturing bases outside China in other low-cost countries? If so, which countries do you think you may expand into?

Answer: Well, I don't think so for the time being. Fuyao is a not a big company yet. We need to improve our own strength to be stronger. We will not say now expand our manufacturing bases into some other countries.


AI: What do you see as the biggest challenge facing your company and how do you propose to tackle it?

Answer: The biggest challenge we are facing is build a skillful management contingent for the international arena and a strong team of staff and workers. In other words, its the improvement of the management staff and workers.

The way for the challenge is learning. We need to set up such teams by means of coming in and going out. On one hand, we are self-cultivating. We were aware of this point already. At the beginning of building the plants we started setting to establish a highly qualified team and maintaining them trained, substantiated, and improved.

On the other, we are employing highly qualified talents worldwide to reinforce our management team. East or west, from any corner of the world, as far as they are talents good for the growth of Fuyao, they are welcome.


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