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Asahi Glass to Close Three North American Plants

Japan's Asahi Glass said on Thursday that it will close three North American factories and halt production at two others, battered by a U.S. housing market slump in the wake of the subprime mortgage crisis.

The move, to take place later this year, will reduce its production capacity by 40 percent in North America, where the glass market is dominated by glass for homes.

It will also result in 900 layoffs.

"The U.S. housing market was slowing even before the subprime mortgage loan crisis began, but that certainly worsened the situation, and now there's a tremendous oversupply," an Asahi Glass spokesman said.

The plants set to close include one in California, one in Iowa and one in the Canadian province of Quebec.

The other two, in California and Tennessee, will be halted indefinitely, with business resuming if the market revives, he added.

The company is now shifting resources to concentrate on profitable areas such as glass for solar batteries and cars.

In a statement, the company said it expected to post a special loss of 13.5 billion yen ($133 million) in the second quarter of fiscal 2008 but said this had already been factored into its forecasts for the year and it was not revising those forecasts.

The company in February forecast profits of 100 billion yen ($983 million) in the year ending in December, a rise of 43.6 percent. The consensus estimate of 15 economists polled by Reuters is for a net profit of 107 billion yen.