Glass Industry In India - Dazzling With Rising Demand

The strong growth in automobile production and the boom in the construction business have acted as a demand driver for the glass segment.

"India is growing at a "fantastic speed", creating fantastic demand for high quality, value-added glass products," stated Jean Louis Beffa, chairman and CEO of Saint-Gobain sometime back while he visited the country. "We have an extraordinary growth platform and a unique opportunity here", he said.

He said India was already the single largest investment destination of his company and it would continue to invest to support the plans of Saint-Gobain India management to have 36% share of the Indian glass and glass products market in the coming years. Saint Gobain glass is establishing a plant in Chennai with a huge investment.

This firm isn't alone in investing glass sector in India. Korean glass maker DM Wall System Co Ltd is pumping in an additional fund to establish another unit in Chennai. Europe's leading glass processor Gloverbel of Belgium will set up its first glass processing plant in Taloja near Mumbai. It goes without say that the glass industry attracts substantial initial investment as it is opening up its shackles to the Indian market.

Traditionally dominated by local players, the industry is seeing a slew of global players planning to set up new units in India. To match this, intense competition domestic glass industry has been forced to expand its capacities and diversify into newer areas.

This glass revolution is now also within the construction industry. Most of the modern buildings in India's prime commercial complexes sport the same kind of exterior - glass. Besides the demand to build interior facades, the changing architecture and aesthetic sense has created a strong market for reflective and thick glasses.

Almost 80 million square feet of land in India is earmarked for shopping malls and nowadays taking in to consideration the aspects like climate, safety and aesthetics the builders are opting for more glass in their constructions as it is more reliable than any other materials when it comes to protection against natural and man made disasters.

India's IT and ITES boom is clearly pushing up demand for glass, along with the proliferation in malls, and the construction boom in other cities, and of course, the boom in automobiles.

Though there is a great demand for glass, which is growing at around 12 percent, analysts say, "As far as the glass industry is concerned, the supply will far exceed demand at least till 2009.

The glassware industry is witnessing a boom producing a variety of products ranging from unbreakable to blended ones and doing a business worth $334 million annually. Harnessing the latest technologies, the industry offers a wide range of products from toughened, unbreakable, laminated safety glass, solar control glass to insulating glass which can be used in interiors as well as exteriors of buildings, say industry sources. Besides buildings, the industry, has expanded its base to other areas including jewellery, crystal show pieces and ornaments.

Though the glass is mostly imported from countries like China, Germany, Belgium and America, with very few Indian companies involved in the processing business, the industry, with $478 million in investments in the next five years in the processing segment, is likely to witness a three-fold increase by 2009, say players in the industry. In the next five years, the industry will offer a $1 billion market for architectural glassware.

Till recently, the glass segment had been a low involvement commodity as far as the end consumers are concerned and the knowledge levels are very low in the consumer's mind space. The sudden advertising spree has given this industry a new customer face and there is also an enhanced initiative by the companies to create awareness of the new technologies and innovative products and services.

In addition, growing quality consciousness has led to a rapid growth in the float glass segment, in a market which was pre-dominantly a sheet glass market till six years back. Float glass currently has 70 percent market share and is driving the growth in the sector. As per industry estimates, the sector has been growing at 8 percent for the last couple of years and is expected to grow at 10-15 percent in the coming years.

The exports market is also looking up for the glass industry. Average growth of exports is around 37% in glass fiber with 80% of its produce being exported. Given the cheaper cost of production, India could soon emerge as a major export base for these glass makers, as in the case of small car manufacturers like Hyundai. For example, Saint Gobain's plant at Sriperambadur (Chennai) has become the third lowest cost manufacturer among the French multinational's 29 plants across the world, after Poland and Spain. The engineering cost under expansion is pegged at half of what it had cost at the time of original investment. This is because the company now uses Indian engineers, while it had to enlist the services of expatriate engineers earlier.

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600450 Glass Industry In India - Dazzling With Rising Demand
Date: 12 December 2006

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