2000 Results
The
unit’s 2000 sales volume grew 6% versus a year ago. Approximately 30%
of these sales were domestic, 26% exports and 44% through its foreign
subsidiaries. The market composition of these sales was construction
25%, automotive (including OEM and replacement glass) 33% and VVP America
42%.
Flat
Glass accounted for 35% and 36% of Vitro’s consolidated revenue and
EBITDA in 2000, respectively. For the year, revenue was US$999 million,
a 14% improvement in dollar terms, and a 6% year-over-year increase
in constant pesos. This top-line growth was due in large part to the
incorporation of Harding Glass.
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EBITDA amounted
to US$198 million, a 3% decrease in dollars, and a 12% drop in constant
pesos. Costs from the Harding Glass acquisition, increases in natural gas
prices and a strong peso pressured margins. The Flat Glass unit continues
to implement cost reduction and productivity improvements and is capitalizing
on synergies and practices at VVP America to expand Harding Glass’ margins.
Exports were US$257 million, a 2% decline
versus 1999. This minor drop was primarily due to a stronger peso.
Review
Vitro’s
Flat Glass unit focuses on the fabrication and distribution of flat glass
for the construction and automotive industries. It is the largest flat glass
producer in Mexico; the second-largest manufacturer in Latin America; and
among the United States leading distributors.
The
business unit’s strategy is driven by its ability to tap domestic and
international market opportunities and to expand the business to its full
potential. Specifically, Flat Glass aims to consolidate its leading share
of the growing Mexican flat glass market and leverage its international
alliances and trading network to grow internationally.
Flat
Glass benefits from long-standing alliances with the world’s second largest
float glass producer, Pilkington of the United Kingdom, Ford, and Solutia,
as well as strong relationships with other top OEMs, such as Daimler Chrysler,
GM, Nissan and Volkswagen. It also enjoys an important export base and
a healthy balance sheet.
Business
Outlook
Construction Glass
Flat
Glass produces architectural, tempered and safety glass, insulated glass
units and mirror glass for the construction industry. This unit is one
of only two flat glass producers in Mexico with two float glass furnaces
in Mexico City and one near Monterrey.
The unit’s domestic construction sales correlate to Mexico’s GDP, averaging
more than two times the country’s GDP over the past 10 years. To consolidate
its leadership position and grow with market demand, Flat Glass is capitalizing
on its distinct production capability to offer customers a more profitable
mix of high-end products; leveraging its nationwide distribution network
to enhance customer service and fulfillment; and aggressively reducing
costs. As a result of these ongoing initiatives, in 2000 Flat Glass increased
market share and maintained margins, despite a strong peso and a considerable
increase in natural gas prices.
The unit aims to build on its leading domestic position, export base,
multinational presence and distribution channels to capitalize on international
growth opportunities. Flat Glass is using its multinational trading network
to actively explore profitable product and geographic market segments
in South America, the United States, Europe and Asia.
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Automotive
Glass
Flat
Glass produces safety glass products that are transformed into automotive
windshields, tempered glass products and complex curvature glass for the
OEM and replacement markets. Flat Glass operates five plants that serve
both of these markets.
The unit enjoys strong relationships with the world’s top OEMs, including
Daimler Chrysler, Ford, General Motors, Nissan and Volkswagen. Flat Glass
continues to address OEM consolidation through ongoing expense and cost
reductions, improving productivity, maintaining domestic market share
and growing value-added market segments such as bulletproof glass, laminated
glass, and more sophisticated windshields and side windows.
Increasingly, Flat Glass is focusing its efforts on the growing replacement
market. The unit is leveraging its national installation network of more
than 60 owned and franchised operations to consolidate its domestic position
and meet market demand. Currently, Flat Glass is expanding its product
portfolio (through internal and outsourced suppliers) to capture a greater
share of this promising market.
Aside from flat glass products, through Química M, its joint venture with
Solutia, Flat Glass produces PVB film that is used in the production of
clear and shaded windshields. Solutia is the global leader in this product
line and supplies the venture with ongoing technical assistance and support.
VVP America
Through
its VVP America subsidiary, Vitro has a significant presence in the U.S.
flat glass market. VVP America increased its U.S. distribution and installation
capacity with its acquisition of Harding Glass in April 2000. Including
Harding Glass, VVP America operates more than 200 fabrication, distribution,
retail and contract glazing facilities in 30 states, primarily located
in the northwestern, western, southwestern, southern and eastern parts
of the country.
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