2011 Pittsburgh Pirates and Corning China - The Success of Long-Term Investment

Much like the resurgent Pittsburgh Pirates of 2011, Corning China is looking to capitalize on a solid performance.  Corning China announced plans to further expand its clean air products plant in Shanghai, China.  The expansion of the plant, with a price tag of around $170 million, will increase Corning China’s capacity to produce emissions control substrates for passenger automobiles.  This move will almost certainly have a dramatic impact as the Chinese automobile market is now the largest domestic market in the world, and is only expected to grow. 

Corning China has been operating within the second largest economy in the world for more than 25 years.  In 2001 the company took a gamble and made a major investment in the long term prospects of the company; Corning China was the first company to build an emissions control substrate production facility.  Corning, specifically Corning China, is among the world’s leading producers of emissions control substrates.

The expansion of the clean air products plant comes at a time when much stricter emission regulations are being implemented, both globally and within China.   China, the world’s largest emitter of greenhouse gasses, began to enact a sequence of progressively stricter emission regulation policies in 2000.  Though these policies are not only directed at the auto industry, vehicles represent a major component of Chinese emissions.  Thus, emission control substrates are experiencing a massive increase in demand within China.  As Corning China has been operating within the country since the early 1980s, and was the first to specialize in clean air products, the company is in a unique position to capitalize on the higher demand.

The success of Corning’s environmental technologies is reflected in the second quarter sales figures, for 2011.   Though sales are relatively even with the first quarter, they are up 40% from the same time period in 2010.  As a nearly the whole of the worlds top automakers are converging upon China, Corning China is poised to take an even more important role in the industry.   

Adding to the success of Corning China, the company is among the largest producer of the specialized glass that is used in the production of HD TVs and other display products.  One of Corning China’s keystone products is their Gorilla Glass.  Gorilla Glass is used in nearly every 3-d TV on the market. As HDTVs are no longer a niche product for the wealth, Corning’s production of specialized glass is now a key component of the overall business strategy of the company.

In the same fashion as the Pittsburgh Pirates, Corning China has made solid, long-term investments which are now paying off.  Though the Pittsburg Pirates have a long way to go to make the playoffs, their investments in the core group of young talent—McCutchen, Tábata, Paul, Morton, and Hanrahan—have the team poised to become a constant contender in the NL Central.  Starting in the early 1980s, Corning began investing in clean air technology within China and has positioned itself as one of the leading producers of emission reducing products for the Chinese auto market.