Both Gimav President Cinzia Schiatti (above and Vitrum President Dino Fenzi (below), outline a fundamentally weak market situation, showing some optimism when thinking about the vitality of emerging markets.
The drop in orders for glass processing machinery became apparent in July and this trend seems set to continue with no end in sight. The downturn is affecting the entire Western world, while emerging markets have remained on the upswing, albeit with a smaller-than-expected growth rate. Over the last few months, China’s growth rate has fallen short of initial expectations, but is still considerable if gauged against our standards. Brazil, the strong partner in South America, is instead struggling with dwindling exports and had to devalue its currency to cope with competition from neighboring countries. These markets, however, are still a precious outlet for the Italian companies affiliated with Gimav, as this is where they have been generating approximately 80% of their exports for a number of years now.
Cinzia Schiatti, President of Gimav, provides a true picture of the current state of affairs: "We are experiencing an uncertain, fluctuating situation. The gloomiest times of 2009 and early 2010 are behind us, we got off to a great start in 2011, there is still a lot of effervescence but not many deals are being cut. There is no long-range planning because it's difficult to make investment decisions. There's a credit crunch in eastern Europe, while Brazil is still offering very satisfactory results. The Old Continent has ground to a halt, although Great Britain is showing its first signs of recovery".
The President of Gimav’s Hollow Glass Group, Michele Gusti was optimistic instead, after the success of the vials and pharmaceutical sector.
A more optimistic view for the pharmaceutical glass is offered by Michele Gusti, President of the Hollow Glass Group: "The vial and pharmaceutical markets are expanding at an interesting pace, and this is particularly true of India, China and eastern Europe, as well as Russia. Brazil is ailing but interesting prospects are opening up in other South American countries, such as Chile, although they are too small to have a significant impact. Our group should close 2011 with a growth rate of approximately 10%".
If this downturn cannot be described as a new crisis, it is undoubtedly a moment of stagnation that will be confirmed in the next few months, during the winter, when the already ailing construction industry in the Western world s traditionally lows down even further and investment propensity drops. As already mentioned, the situation is different for the emerging markets, although the picture is not as rosy as it appeared at the beginning of the year. However, there is still room for some optimism: "Orders and growth rates for the general economy are actually shrinking -- concludes Dino Fenzi, President of Vitrum and Honorary President of Gimav – but we should also consider that by the end of the year the world as a whole will have grown by 4%, and will in all likelihood perform equally well again by the end of next year. Who stands to benefit from this, however, remains to be seen”.