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The Next 100 Years
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 USGlass 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.

USG: Can you tell me a little bit about where you grew up?
MI: I was born in Nagoya, the fourth largest city in Japan. My mother’s house is around 20 miles from Nagoya. I graduated from Yokahama National University in 1982, where I had specialized in chemical engineering. After graduating, I joined AGC the same year—30 years ago. I first worked as an engineer for the automotive glass division in Japan. I supported the new technology process and advanced process and quality improvement group. I moved to Europe in 1991. AGC was constructing a new automotive glass plant in Belgium, and I was the chief engineer over this project. We stayed in Belgium for five years where I continued to supervise production, technology and operations. I then returned to Japan in 1996 and in 2000, I moved to the AGC headquarters in Tokyo as director of our Japan/Asia-Pacific automotive business. In 2007, I became the regional president of automotive business in Japan/Asia-Pacific. Just three years ago, I moved to the flat glass division. And in the middle of 2009, I took over both auto and flat glass when I became the regional president of the glass business in Japan/Asia-Pacific. In 2010, I came here to the United States and I became president and CEO of AGC Glass Company North America. I also serve as a senior executive for the global AGC Group. I have a long, long history at AGC from 1982 to now, so this is my career [chuckles].

USG: What differences have you seen since moving from automotive to flat glass?
MI: In automotive, the customer is very demanding. The demands of the automakers in Japan [Honda, Nissan and Toyota] are very exact. They want quality, they want service—they want everything. The challenge to meet or exceed these demands also provides great opportunity.

USG: Did you always want to work in the glass industry? How did you end up at AGC?
MI: I was highly specialized in the field of chemical engineering. When I discussed the future with my professor, AGC was a company that was highly recommended, which is the reason I chose to work for AGC. USG: Is there anything you’ve found that we in North America can learn from the other regions? MI: Each division is different. Europe is in a very tough position today, as an economic crisis is happening there, and our market is shrinking. It’s a very difficult situation. In the U.S., the worst is over. We had an economic crisis in 2008, 2009 and 2010 also. Last year, in Japan, we had a very big earthquake and tsunami, and customer demand will increase for the next year or two, but this market is limited. In China, Thailand and Indonesia, now construction is booming. Of course, China is slower but still very big, so we can grow the market.

USG: You took over in the midst of an economic downturn in the United States. Has this affected the way you lead the company?
MI: I understand the economic situation in the United States is very tough but we can see the market recovery. I expect further growth in the U.S.market. The population of America is around 300 million people. The population increases by approximately 3 million people every year and three million people is a huge number, yes? … The biggest city in Japan is Tokyo and the second is Yokahama, which is around 3 million, so every year a [new] Yokahama city appears in the U.S. This is a very big opportunity for us. That’s the reason why I expect very big growth and faster growth of the market in the U.S. in the coming years. This is my expectation and, at the same time, we have to meet our customers’ requirements—capacity, quality and also products. For the past five or six years we’ve had the same strategy in order to meet the market situation and customer requirements. The peak of glass consumption was 2007. After that, we had to shrink our operations in order to match market demands. In 2007, we had eight float furnaces in North America. Now, just three furnaces remain in North America. It is expected that the market will grow, so we have to expand capacity and we have to upgrade our equipment in order to meet customers’ requirements. We have changed our strategy completely toward growth. This is now our challenge for North America.

USG: 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.

USG: The primary manufacturers typically have each been known by a particular person or face in the North American market. AGC has not always had this—is there a reason?
MI: AGC is a public company governed by a board of directors; therefore, one person does not control the company. We are a global company. Providing good quality, good services and good technology does not depend on the visibility of one person. It depends on the corporate strategy and corporate division. We have a very good corporate strategy all over the world. We work based on this strategy. Our goal is to work together as a team and to remain focused on the needs of our customers.

USG: There’s been a large debate about what a primary manufacturer’s role should be—whether it should create value-added glass or whether that should be the fabricator’s role. Where does AGC fit in?
MI: We are strongly convinced the role comes from both primary and fabrication and from proper synergies between the two, whether it’s through our internal fabrication group, or our network of external fabricators. We really think our strengths in primary and fabrication are complementary. We don’t think there should be any conflict between primary [manufacturers] and fabricators …

USG: 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 …

USG: 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 we’ve worked with 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, it can be in terms of a collaborative sales effort —to support our loyal and strategic customers in those difficult times. It’s trying more to make them healthy and sustainable, because credit only goes so far as it can go. It’s been a concern for all glassmakers, and it’s a concern for AGC. I suspect we’ll see the end of it during this winter and after that we should not see any major shakeout in the market, at least at the customer level.

USG: Where do you see the architectural glass industry ten years from now? What changes do you expect?
MI: I think the markets will continue to grow and also value-added product requirements will be bigger and bigger, especially with Energy Star under evaluation. The [criteria] is going to be more restrictive. I think the trend will be continued and the demand will increase. We also are going to see a continued shift in terms of quality … We definitely are going to see a shift toward a product with a longer and better life expectancy (see related story on page 34) and better quality right from the moment of delivery. This is a place where the North American industry can catch up. It’s an opportunity for those who will get on board first, but definitely in the next ten years this is something we should see happening more widely in the industry.

USG: One challenge we hear a lot about is the impact of codes and regulations on the glass industry. Do you see this as a problem for the industry? What do you think is the solution?
MI: If those codes and regulations and programs are based on good science they will be beneficial to the industry and the end user. They need to be based on good science and fair to all the players in the country. If they are on a fair basis, it can only lead to progress. But it has to be demonstrated that they are cost-effective and environmentally effective. They cannot come out of the blue from some target numbers that don’t rely on good science. We’re not challenging the need or opportunity of such codes and regulations, we’re just saying they need to be well designed. Then they will be a real asset to the glass industry.

USG: What do you think the industry most needs now?
MI: I don’t think the industry needs anything to come from the outside. It’s more up to the industry to be bold enough to reinvent itself, to get out of the whole paradigm of how the industry was just driven by volume and capacity. It’s more of a change of mindset in the industry and focusing on the value that can be created in the industry. \

USG: What are your thoughts on the economic recovery in terms of both the commercial and residential markets? 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. And, as we have seen, automotive has recovered to a certain degree already in terms of volume. We clearly see that there are signs of improvements on the residential side with housing starts. Right now, commercial, and I’d say at the fabrication level, is more of an unsettled market more due to the dynamics of the players than a result of demand. We see the demand in the market as reasonably stable and somewhat flat for now. 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. Some segments such as institutional, especially in an election year, are not doing too well …

USG: Product-wise, where do you expect the industry to head in the future? What do you think will be the next big trend?
MI: Clearly, the current step is the next generation of high-performance coatings. AGC will be introducing these coatings very soon, and that’s also driven and relating to the codes as we were discussing before. That’s a very straightforward one and we should see [this] across the industry soon. Then there are surface 4 products and trends are moving more toward triple-glazing or other technologies with lower U-values and better insulating units. Vacuum insulating glazing (VIG) will take more time to be mature, but that trend will continue. Another growing trend we consider to have good potential is dynamic glazing, but before it becomes a mass product it’s going to take a certain amount of time. Maybe there we’re talking about two or three code revisions before it really gets support or traction in the market. Certainly daylighting is a trend that is also playing a role in all this. It’s again more of a question of system and architectural design than specifically about primary or even fabricated glass product. It’s how you put together your building design, so that has to go through the entire cycle of architect awareness, training in new façade designs, and [be] implemented in buildings. We must make sure that we do not force an architect into having to comply with a limited set of numbers such as a U-value, visible light transmission and solar heat gain because that can limit them into just picking one product and staying with the same design. We like the approach LEED has taken to look at a more overall design of the building. This can drive toward the use of more glass in the building and better uses of glass …

USG: Is there anything else you’d like to tell our readers?
MI: We are changing now. We are committed to North America—including [bringing] value-added products to the market; [and] to continue providing quality products and services. And we are sure we can contribute to our customers and to society in the U.S.

USG: Thank you for your time.
MI: Thank you.

Penny Stacey is the editor of USGlass magazine. She can be reached at pstacey@glass.com. Read her blog at http://penny.usglassmag.com, follow her on Twitter @USGlass, and like USGlass Magazine on Facebook to receive the latest updates.

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