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The Japanese owner of a specialist glass factory in the UK supplying cars and wind turbines has threatened to shut down the site if a buyer or partner cannot be found within two months, putting 250 jobs at risk.
Nippon Electric Glass has put its composites subsidiary based in Wigan, Greater Manchester, under a two-month strategic review to consider options such as selling the company or forming strategic partnerships.
“If no optimal option is found, we may have to consider the potential cessation of EGFU’s operations,” it said in a stock market announcement released late on Thursday, referring to Electric Glass Fiber UK.
The plant closure would deal a blow to the industrial strategy launched in November by Sir Keir Starmer’s Labour government that seeks to promote eight areas, including advanced manufacturing and clean energy.
British industrial businesses have been under severe pressure from high energy costs, driven by a surge in gas prices connected to Russia’s invasion of Ukraine in 2022.
The Japanese owner cited “sluggish sales” that had been caused by “high prices for raw materials, energy and logistics”.
The factory produces fibre glass, which reinforce plastic to make lightweight composites used in wind turbine blades and electric cars.
In accounts for the year ending in December 2023, the UK unit recorded a post-tax loss of £3.5mn, down from a profit of £7.4mn the year before, on sales that dropped 17 per cent to £56mn. The unit had 250 employees, according to the report.
Profit margins for glass producers in Europe have been depressed over the past decade by intense competition from cheap Chinese imports, despite the UK following the EU in introducing tariffs against imports from China.
Takuya Maeda, analyst at SMBC Nikko, said that he had a “positive impression” of the move to restructure the Japanese group’s composite business that has “struggled against low-priced offensives by Chinese makers over the past few years”.
Nippon Electric Glass, which also makes glass for TV and smartphone displays, agreed to buy the European fibre glass business of US paint maker PPG in 2016 for $545mn.
Japanese investment into the UK has become tougher because of Brexit and suffered a big blow when Honda closed its Swindon plant in 2021, although geopolitics are pushing the two countries to explore more defence collaboration and clean energy investments.
