Fuyao Glass' 1st-Half Net Falls 20%; Overseas Market Grows to 48%
Zhang Yushuo
DATE:  Aug 29 2019
/ SOURCE:  yicai
Fuyao Glass' 1st-Half Net Falls 20%; Overseas Market Grows to 48% Fuyao Glass' 1st-Half Net Falls 20%; Overseas Market Grows to 48%

(Yicai Global) Aug. 29 -- Fuyao Glass Industry Group, which figured so prominently in the Netflix documentary film American Factory, earned CNY10.3 billion (USD1.44 billion) in revenue in a 2 percent rise on the year before, the first-half report it issued yesterday shows.

Its CNY1.5 billion net profit attributable to shareholders marked an almost 20 percent rise on the year, while its overseas market grew to about 48 percent of its total from the 39 percent of the year before.

China produced 12.13 million vehicles in the first half in an almost 14 percent slide from the year before, per China Association of Automobile Manufacturers statistics.

"Constrained by the slowdown in global economic growth, the downturn of the domestic economy and the continued negative growth of the automotive industry, the company's net profit declined during the reporting period, "Fuyao Glass said in its report.

One of the world's largest and most technologically advanced auto glass suppliers, the firm supplies customers in the US, the UK, Germany, Japan and other countries and regions, and claims a one-quarter share of the global market, and 60 percent of China's.

Fuyao Glass' short-term performance has slid, but its overseas market share has grown by around one-half. By building plants in the US and EU and producing and selling locally the company has bolstered its customer retention and confidence in placing orders as well as averting the risks of exchange rate fluctuations. Moraine, Ohio-based Fuyao Glass America (including such units as Decatur-based Fuyao Glass Illinois) pulled in CNY1.9 billion in revenue and CNY148 million (USD21 million) in the first half in a 17 percent rise on the year.

The company announced plans to build an Ohio plant in 2013 to supply the US local market in a project that involved a combined investment of USD700 million.

This the world's largest single auto glass factory went into operation in 2016, but Fuyao Glass America lost USD41.61 million, and also got caught up in an organized labor movement, cultural misunderstandings and other unforeseen events.

Turning this situation around, the US unit turned a profit for two successive years in 2017 and 2018 at CNY5.8 million and 240 million, respectively.
American Factory narrates the tale of Fuyao Glass' foray into the US, recounting all the problems it experienced. The Chinese managers viewed the local workers as lazy and preoccupied with their personal rights.The US workers felt they were assigned impossible production quotas and insufficient time off and threatened to form a labor union to defend their rights. Fuyao was eventually able to pour oil on the waters and achieve profitability, however.

Editor: Ben Armour

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Keywords:   Fuyao Glass,American Factory,automotive,earnings report