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Pilkington Glass, 50% Price Rise, Then Another 30%

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Britain's leading glass-maker Pilkington is hitting its customers with a second huge price rise of up to 30 per cent just three months after imposing a 50 per cent hike.

Pilkington, which supplies more than a third of the glass used in UK buildings, has written to its customers to inform them of the further increase to its tariffs from September 7.

Demand must be down, but they appear to still have pricing power.

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From Nov 2008

BRUSSELS — The European Commission fined companies controlling the Continent’s auto glass market a record 1.4 billion euros ($1.77 billion), on Wednesday for price-fixing over five years. Two of the companies have been caught engaging in cartel practices before.

A week earlier, investigators raided several big cement makers in Europe, including other repeat offenders. Antitrust specialists said such signs of chronic price fixing raised questions about whether European enforcement efforts could be effective without the threat of jail terms, as are routinely handed down in the United States.

The European Union competition commissioner, Neelie Kroes, insisted that stiff fines should be enough to dissuade executives from fixing prices, restricting supplies and dividing markets in Europe.

“If you cheat, you will get a heavy fine,†Ms. Kroes said at a news conference. The biggest fine, 896 million euros ($1.1 billion), on the French glass maker Saint-Gobain, was set so high — a record for a single company — partly because it was a repeat offender, she said. The other repeat offender, Pilkington, which is the British unit of Nippon Sheet Glass of Japan, was fined 370 million euros ($470 million).



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Joking aside, this does show that inflation and recession can coexist. It is a complete myth that recessions force down prices, as it is far more complex than that.

As you say - it would be very interesting if we saw a raft of price increases across the board of this magnitude - I reckon that the BoE would still sit on its hands and watch from the sidelines as they gently shrug their collective shoulders.

Money is only important if you cannot print it - for all those that can, its just relative.

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The Group’s business lines cover three core product sectors; Building Products, Automotive, and Specialty Glass.   Building Products, representing 48 percent of Group sales, includes the manufacture and sale of flat glass and various interior and exterior glazing products within the commercial and residential markets.  It also includes glass for the growing solar energy sector.Automotive, with 42 percent of Group sales, supplies a wide range of automotive glazing for new vehicles and for replacement markets. Specialty Glass, representing 10 percent of Group sales, comprises a number of discrete businesses, including the manufacture and sale of very thin glass for small displays, lenses and light guides for printers, as well as glass fiber products, such as air filters, battery separators, and glass components for engine timing belts.The table below shows a summary of cumulative results by business line. JPY millions														  Sales			  Operating income																   FY2008	  FY2009	FY2008	FY2009Building Products													 402,468	 347,833	31,338	10,622Automotive															364,818	 299,096	23,939	 1,292Specialty Glass														83,589	  75,397	 9,029	 3,758Other Operations and Eliminations									  14,712	  17,039   (17,844)  (13,764)Total																 865,587	 739,365	46,462	 1,908

So 90% of their business is construction and automotive...... and losing 15% of their turnover has decimated the profit margin. 46,462 down to 1,908 JPY millions. down 96% :blink:

I feel faint!

But they have a cure!

For the NSG Group, FY2010 will be a year of restructuring. On 29 January and 7 April 2009, the Group announced a series of measures designed to address the economic downturn and improve profitability going forward. The total income statement change for the restructuring will be around ¥ 25 billion over the next two years, with an expected annualized payback of ¥ 16 billion.

The above measures will result in a reduction in overall headcount in the Group of approximately 6,700 people by March 2010, representing over 15 percent of the total global headcount compared with 30 June 2008. Around 4,500 of these employees had already left the Group by 31 March 2009.

In addition, the Group has reviewed its investment plans, with the aim to sharpen its focus consistent with the Group's growth strategy. The Group is reducing overall investment in the short term, but will be increasing the share of the reduced total for investment in the solar energy sector, which the Group continues to identify as a key area for expansion. Through such measures, the NSG Group is planning to contain investment across its businesses to below 60 percent of depreciation for the next two financial years.

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