Jul 21 2010
Corning Incorporated (NYSE:GLW) announced today that its board of directors has approved a capital expenditure plan to increase manufacturing capacity in the company’s Environmental Technologies and Life Sciences segments in the People’s Republic of China.
Corning will invest approximately $125 million to expand its Corning Shanghai Company Limited automotive substrate facility and approximately $40 million to build a new manufacturing and distribution facility for Corning Life Sciences in the Yangtze River Delta. Final site selection for the life sciences facility is now underway. These investments will be part of Corning’s 2011 capital expenditures.
“China’s emerging economy and the strength of the Asian market are critical to Corning’s long-term growth strategy,” said Peter F. Volanakis, president and chief operating officer. “More than half of our overall revenues are now generated in Asia, and China has become the largest market for all our core products.”
Environmental Technologies
Corning’s expansion of its existing light-duty (automotive) substrate manufacturing facility in Shanghai is expected to be operational in the second half of 2012. The company began shipping emissions-control products from the Shanghai facility in 2001 and completed its first plant expansion in 2007.
Thomas R. Hinman, senior vice president and general manager for Corning’s Environmental Technologies segment, said, “We anticipate worldwide sales of automobiles will grow steadily over the next several years, outpacing industry expectations. The growth of auto sales in China, combined with the government’s commitment to tighten auto emissions regulations, should lead to a very robust business environment for the foreseeable future.” Hinman noted that this production expansion will also allow the company’s U.S. and European production facilities to better meet the increased demand for clean-air products as both the North American and European auto markets recover from the recent recession.
Corning Life Sciences
Corning will become the first U.S manufacturer of locally produced labware products for the rapidly growing life sciences market in China. Driven by a booming economy, China’s national healthcare spending is expected to approach
$250 billion annually this year.
“The opportunity to establish a local presence in this growing market is driving our investment decision,” explained
Mark A. Beck, senior vice president, Corning Life Sciences. He pointed out that many of the consumable labware products require low-cost, high-quality manufacturing and efficient local distribution channels to be cost competitive in China. “We believe this new facility will provide us with a distinct advantage for improved market access and local distribution.”