Volume 13, Issue 8 - October 2012

feature

AGC The Next 100 Years
AGC North America’s Leader Discusses
the U.S. Market, the Future and More

by Penny Stacey


Marehisa “Mark” Ishiko was named president and CEO of AGC Glass Company North America in June 2010. Now, just two years later, he has an optimistic outlook for the future—and major growth plans for the Alpharetta, Ga.-based company. A native of Japan, Ishiko has been with parent company Asahi Glass for 30 years and has worked all over the world, including Japan, Europe and now North America. Ishiko recently took the time to sit down for an exclusive interview with DWM magazine about his history, his hopes for the future and the North American architectural glass market. Serge Martin, vice president of building products, was also present and contributed to the interview. (For the full version of the interview, see the online September issue of DWM’s sister publication, USGlass magazine at www.usglassmag.com/digital/September.)

DWM: What are your specific goals for AGC in the North American market?
MI: We are changing to become a solution provider, by not only providing glass but also by providing solutions for customers. This is a very big change for us and this is the basis of our “Beyond Glass” approach. We have very advanced integration for environmental issues, C02, emission reductions and energy savings so we can provide a solution to the customer. This will be our focus for our future business.

DWM:What do you see as the biggest problems facing your customers?
MI: Clearly the economy and where the market is heading is a challenge for customers across the industry. Even though we see the market recovering, if the economy stalls it’s a concern that is very visible to our customers. There is a big opportunity in the North American market to focus on more value-added products. This includes selling the value of the glass in the building and comparing to the other construction materials how glass brings value. I think it applies to the primary side and all of our customers as well.

In terms of creativity and approach to the market, there is an opportunity for the industry to reinvent itself and part of that can be quality. There is still room to open the eyes of the final customer to the quality of the glass product and to differentiate more on quality …

DWM: There are a number of companies that have closed or filed for bankruptcy in recent months and years. How do you deal with that when those are your customers that unfortunately are closing their doors?
MI: On the one hand, we need to protect AGC in terms of credit risk like any company does and we do that in a way that is fair to the customer and fair to the market. So far we’ve proven to have a very good track record in making the right decisions. We do our due diligence there and work with our customers to identify problems before they become too severe. That’s one piece.

The other piece is that we have customers with whom we’ve worked for years and, within the framework of what we can do within our credit policy, we’ve tried to help them and support them as much as we can. We understand that market situations are temporary as well. We try everything we can, and not just in terms of credit—it can be in terms of marketing support, it can be in terms of new products …

DWM: What are your thoughts on the economic recovery in terms of the residential market? What do you think is ahead for 2013?
MI: If you look at previous cycles of recession and recovery, it follows the same order. That’s what we are seeing today as well. The recovery in automotive comes first, residential second and commercial third. Our take is that residential has begun to improve—slowly, but it’s starting to take off and commercial should follow a few months later. We clearly see that there are signs of improvements on the residential side with housing starts.

We think residential is starting to see the light at the end of the tunnel and we think commercial is seeing the bottom of the market

DWM: On the residential side we have heard a lot of discussion concerning the use of a coating on surface four of the glass. There seems to be some disagreement as some window companies says they won’t use a coating on surface four as it could cause condensation resistance. Do you have any thoughts on this and are you doing any education to your customers regarding this option and why it may or may not be a viable one?
MI: It’s a very interesting topic and, whether it’s been well-known or not, AGC was at the front of this when we launched our U4 Technology, more than two years ago, promoting the use of fourth surface low-E on IG units specifically for residential. We launched it because of our confidence that it works. We’ve marketed it and customers have provided excellent market feedback.

We see a misconception from people who do not use it, but customers who are using that solution are very happy with it. I think what we are seeing is [some] people not willing to change the way they approach things versus others who will embrace the change and see positive results. I think that it’s more resistance to change, rather than technical problems.

Basically, the type of product and coating we use for surface four at AGC is extremely durable. In fact, the type of coating ismore durable and tougher than the uncoated glass surface. Companies are not as much concerned with the durability–but more with the risk of condensation, but practical experience in the field shows us that it is a non-issue. (Center of glass temperature is approximately 4 degrees fahrenheit warmer than clear on clear… which has been installed in the industry for more than 25 years without any problems.)

DWM: Do you have any growth plans related to the residential side of the business?
MI: First, we are seeing signs of improvement on residential a little more than commercial right now; residential is coming out of the tunnel. AGC is committed to all segments with specific solutions to all segments. For years the market has been approached from a one-size-fits-all kind of thing, and people want to use the same windows in all the regions, all the climates, etc. We strongly believe, and AGC has been advocating, the use of a climate-based solution. You shouldn’t have the same windows in Wisconsin and Florida.

The industry, because they’re resistant to change or reluctant to change, try to push that, but we really believe it when we say that programs and codes have to be based on good science. This is a trend that people won’t be able to push back on forever so we’re going to see less standardization and more customization.

There are two major aspects of potential in the North American residential market which may be related. These are sound insulation and acoustics and security and prevention. Those are two aspects on which windows in the residential market are too weak today.

It starts with a good airtight window, of course, but then after that the glass can do a lot to improve those two aspects, especially in terms of acoustics. If we were to look at the acoustic performance of a window made of two pieces of single-strength glass, it’s really not a good performer in terms of sound insulation. It’s not that bad and it’s not a problem in rural areas, but real progress could be made in condominiums or urban environments where those technical solutions exist. I think it’s one of the features people have not insisted on enough.

But there’s a first step, which is let’s address the energy and environment piece. Once we’ve made significant breakthroughs there, addressing those additional needs that matter to people in terms of comfort and/or security will come to the forefront as well. This could be a second wave of improvement in the residential segment from a product standpoint. It probably will have as much appeal, if not more, to the remodeling market as opposed to new housing. Typically in the remodeling the owner or end user is buying his own windows and he’s more sensitive to the product he’s getting instead as opposed to buying a turnkey house from a builder. So that’s probably the segment where we will see that starting to happen first.


DWM

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