Asian Glass AG20-4

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AUTO GLASS IN OVERDRIVE? RES U C E S E ZIPP DEAL D N A G WIE

Inside:

COVID: a pharma boom Container glass corporate changes Beverage packaging trends

PLUS!

news, views, analysis and much, much more!

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Contents: AG 20-4 Regulars

Features

6 Welcome

30 COVID: a pharma glass boom?

The giving side of the glass industry.

8 Headline News

Openings, closures and industry moves from across Asia.

14 Global View

Our eye on the international arena.

20 People and Places Movers and shakers, ups and downs.

24 Batch

Raw material news and updates.

26 Comment & Analysis Cosmetic changes for the environment?

AG looks at how the globe’s leading pharma glass makers are rising to the challenge of ensuring there’s enough borosilicate to go around when seven billion people all start clamouring for a vaccine…

40 Automotive glass in GCC

Yogender Malik looks at how the stop/start nature of the effects of Covid has created a new momentum in the autoglass industries of the GCC….

52 Beverage packaging trends

AG examines whether the unprecedented global circumstances that 2020 has brought to the industry has changed the direction of travel for beverage packaging or if the sector is planning to continue as previously planned…

62 Container glass corporate moves

AG considers that although the changing demands of the Asian container glass industry led to a spate of takeovers, mergers and acquisitions, whether the momentum for such activity has started to wane…

62

Anaylsis 52 Your favourite magazine is now available at the App Store… download today to see your first sample issue!

Asian Glass: now for mobiles, ipads and androids 4

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70 In Focus

Nilanka Mendis, Quality Assurance Manager and Management Representative for ISO of Gurind Accor (Pvt) Ltd, talks to Rohan Gunasekera about the state of play for the Sri Lanka’s glass processors..

76 Window

Analysis and insight into India.

78 Refractory Zone

Free from lockdown, P.Carlo Ratto* picks up the challenge once again, dons the facemask and discusses how carrying out refractory inspections inside glass furnaces is going to change dramatically for some time to come…. www.asianglass.com

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Welcome S

Is this your own copy ? subscribe online at www.asianglas s.com AG20-4

AUTO GLASS IN OVERDRIVE?

ometimes we all get a bit obsessed with “how important” we all are and equally “how busy” that makes us. COVID this year, has, one hopes, for all its dreadful downsides, at least helped everyone focus again on what is truly important and how humanity is far better when it S ZIPPE SECURE L pulls together, rather than concentrating on division WIEGAND DEA Inside: and dispute.

COVID: a pharma boom Container glass corp orate changes Beverage packag The tragic events that followed the explosion in Beirut’s ing trends PLUS! news, views, ana lysis and much, muc harbour in August were another sharp shock to the system h more! in a 2020 that many will be glad to forget. However, perhaps one of the more unknown responses to that crisis has been that of the glass industry, where humanitarian efforts have seen rapid responses to help re-build the area.

For example, a shipment of high-quality glass from Dubai was sent to Beirut, Lebanon, to help repair 700 flats, homes and shops that were destroyed in the blasts.

A charitable initiative by Dubai Investments (DI), the relief included several containers of glass that can replace hundreds of window panels that the massive explosion had shattered as it tore through the city and killed nearly 200 people.

The aid was arranged by the DI’s subsidiaries, Emirates Float Glass and Emirates Glass, and shipped in coordination with the Chamber of Commerce, Industry and Agriculture of Beirut and Mount Lebanon.

Besides glass, 1.4 tonnes of emergency medical supplies were also sent to Beirut by another DI subsidiary, Globalpharma.

The relief package, which included medicines, sanitisers and face masks, aimed to support efforts to fight Covid-19 in Lebanon’s capital, help treat those wounded in the blast, and replenish the supplies that had been depleted because of the tragedy.

Khalid Bin Kalban, vice-chairman and CEO of Dubai Investments, said: “In line with the ‘UAE Volunteers’ campaign and the urgent national humanitarian initiative called ‘From UAE For Lebanon’, we are trying to make the best use of the resources through all our group companies to support and strengthen the Lebanese economy and its people. We shall continue to assess the situation and evaluate what additional assistance we can provide as a group.”

It has not just been the immediate region that has responded either. Throughout September the tragic explosion at the port of Beirut, Bangladesh has been upping its aid for Lebanon’s capital city.

Responding to a request from Lebanon, the South Asian country has sent 3,360 kilograms (over 3 tonnes) of glassware as emergency aid.

According to local media the Lebanese government made a request through the Bangladesh Embassy in Beirut, to send glassware to help recover the damages caused by the explosion, It is good to know that when needed, the glass industry is still able to respond to difficulty. A lesson for us all perhaps?

AG Covers_CURR

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CONTACT DETAILS EDITORIAL Publishing Director Andy Skillen Email: askillen@asianglass.com Direct line: + 44 (0) 208 123 0196

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02/10/2020 11:08

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Paul Russell Email: prussell@asianglass.com Direct line: + 44 (0) 208 638 0619 Production and design Tim Mitchell Email: tim@bowheadmedia.com Direct line: + 44 (0) 208 123 0839

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HEAD OFFICE Bowhead Media Ltd, The Old Casino 28 Fourth Avenue Hove East Sussex, BN3 2PJ

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Asian Glass (ISSN: 1475-6501), is published by Bowhead Media Ltd, registered in the UK no: 6127651

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HEADLINE NEWS ASIA TECGLASS seals deal with ERDEM Turkey

TECGLASS and ERDEM DIS TICARET A.S. Dis seal a new partnership deal with a major project for a Vitro-Jet FS24 digital printing extra-line, which will strengthen the Turkish company’s leadership position in the architectural glass market, making it the only company in Turkey able to supply digitally printed glass in up to 3,210 mm x 8,000 mm size.

A new international agreement for Tecglass once again proves that digital printing on glass is increasingly fundamental in the world of architectural glass, including in Turkey, where Erdem Dis Ticaret AS operates. Part of the Tamcam Oto Cam San AS Group., the company is located in Pendik- Istanbul, well-known for glass processing for architectural use and for its contributions to the most iconic buildings that have transformed the city skyline in recent years. In order to maintain its high production standards to meet the challenges of modern architecture with innovative, state-of-the- art solutions for the most sophisticated projects,

Erdem Dis Ticaret A.S has opted to rely on Tecglass digital printing technology.

“The flexibility and business opportunities in terms of the product portfolio we could offer through digital printing technology was fundamental to expanding our architectural business section.

After a thorough and detailed analysis of the technologies available in the market, making the decision was a simple process for us. As an international big player and leader in the production of architectural glass we had no doubt that the technology that Tecglass proposed to us at the time of the project’s development was the right one for Erem Dis Ticaret A.S” - confirms Mehmet Ali Ozgul, Plant Manager of Erdem Dis Ticaret AS and person in charge of developing the digital printing project.

“Oversize has been a continuous challenge and increasingly in demand. From the beginning, it was clear to us that, as a leading company in the sector, an over-size line would

be a significant differentiating factor in terms of our capabilities to supply digitally printed glass.

Tecglass' exclusive patented Side Kinetix technology is an absolutely impressive technological factor and a key aspect for us. It provides the printer with outstanding printing speeds, moving smoothly on the long side of the glass, a unique Tecglass feature which, considering the size of glass we handle - up to 8 meters , streamlines our process, optimizing production times” – points out Mr. Kusculu, General Manager of Erdem Dis Ticaret A.S. Gustavo Lázara – Tecglass Product Area Manager – along with Esat Suvareriol from Flat Glass International – official Tecglass representative in Turkey – expressed great satisfaction with this new partnership and agreement with Erdem Dis Ticaret A.S , which strengthens the positions of both companies in the glass market.

“We are really satisfied with this new partnership with Erden

Dis Ticaret, they are a reference company in the architectural glass industry and I had no doubt that we had the latest generation digital printing technology suitable for them. We are a company that provides complete digital printing solutions to the customer, including the printer and all auxiliary line equipment as well as the manufacture and development of all ranges of ceramic inks, to guarantee optimal machine. performance. The project with Erdem includes the extra- size loading and unloading conveyors with tilting function and an external dryer, a complete turnkey solution manufactured in-house by Tecglass. The fact that we are able to provide the complete solution to the customer as a single supplier, was also a key factor in Erdem’s decision to partner with Tecglass. The journey we have undertaken with Erdem Dis Ticaret A.S is full of enthusiasm and optimism for the future" – remarked Gustavo Lázara, Tecglass Product Area Manager.

Glaspac aims for capacity increase India Indian glass packaging industry is seeing an increase in demand from the liquor industry, food and beverage sector with the news that India has announced a total ban on plastic products from 2022.

According to Rajesh Khosla, CEO of Indian container glass producer AGI Glasspac, “ The packaging of beverages has become quite important after COVID-19, owing to safety concerns. The glass packaging industry is seeing increased demand from the food and beverage and pharmaceutical sectors as the COVID-19 pandemic has led to higher

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demand for medicine bottles, food jars and beverage bottles. We have major plant investment and upgrade plans.

The expansion plans have been slightly delayed due to the current pandemic. We are hoping to complete them by the end of this year.

“We have plans to invest around INR 700 crore in two phases in a greenfield facility in the eastern part of India and INR 150 crore in expanding the existing facility at Telangana. The expansion is aimed at increasing the total capacity to about 8-8.9 million Bottles Per Day (BPD) by 2022. Glass packaging continues

to face fierce competition from other forms of packaging in India, where, for commercial reasons, the use of alternative materials is increasing.

“Among the reasons for some customers to switch, are loadability, breakages and unit cost. The industry needs to develop more lightweight bottles and improve the durability of its finished products. Counterfeiting is another challenge faced by the industry. In the past, the local glass container industry concentrated its efforts on such objectives as traceability to restrict counterfeiting. Such an initiative would involve the

use of permanent engravings on containers, showing the quarter and year of manufacture.

This system could be helpful to protect consumers from any harmful practices employed by counterfeiters.”ehicle segments,” SIAM President Kenichi Ayukawa said.

Dominated by Asahi India Glass, Indian automotive glass industry has been going through one of its worst phases in last three decades. Most of the leading automotive glass producers and downstream processors have been operating at very low capacity utilisation rates during the last six months.

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Heye swabbing robots commissioned in China China The latest production expansion at one of China’s leading beer bottle producers features three swabbing robots and Press Duration Control PDC equipment sourced from Germany’s Heye International GmbH. The swabbing robots are the first to be installed by Heye in the country.

Shandong Jingyao Glass Group Co Ltd has invested strongly in the high speed production of lightweight bottles in recent years. As well as supplying bottles for China’s iconic Tsingtao beer, the company has emerged as an important source for such global brands as AB InBev, Carlsberg, Heineken and Snow

Beer.

The glassworks in Linyi City, Shandong Province features four melting furnaces and 16 high speed production lines, with a combined nominal capacity of 1000 tons/day.

Some of the world’s most advanced Narrow Neck Press and Blow process glass container production technology is operated at the site, including

a series of advanced Heye International IS machines and associated equipment.

As part of the company’s ongoing investment programme, Shandong Jingyao Glass has worked closely with Heye International to install China’s first automatic swabbing robots and to guarantee that machine operators are properly trained to operate the equipment effectively. The robots deliver zero rejects and avoid section stops during swabbing.

Compared to conventional swabbing methods, lubricant savings of up to 75% are possible.

According to Heye’s Andy Lee, improved operator safety

is assured, with stable and repeatable volume, thickness and location of swabbing provided, making more time available for operators to focus on production optimisation.

“Installation and commissioning of the three robots and associated process controls was successfully realised in close collaboration with the customer” he confirmed.

Separately, the glassmaker has invested in a PlantPilot information technology solution from Heye International and initiated a technical assistance agreement with the production technology specialist to improve and optimise NNPB technology at the site.

Gold Plus completes line refurbishment India Gold Plus Glass has completed a refurbishment exercise at one of its two float glass lines. This refurbishment has positioned Gold Plus as the second largest float glass manufacturing company in the country with an annual capacity of 1,250 tonnes per day (TPD). The company set up its first glass manufacturing line in Januar y 2009 with an annual capacity

of 470 TPD, which got fur ther augmented in 2018 with its second greenfield facility of 700 TPD capacity. Both the units are located in Roorkee (Uttarakhand). It primarily manufacturers clear float glass for architectural applications.

With the recent refubrishment, it has expanded its offerings to include higher value-added glass, such as tinted glass.

Impor ts constitute approximately 20% of India’s total demand for float glass.

The domestic manufacturers face competition from impor ts because they have lower costs. However, the Government has, in the past, taken several initiatives to suppor t local manufacturers, such as anti-dumping duty, which is likely to provide a

level playing field for domestic glass manufacturers.

India has imposed antidumping duty on float glass impor ts from Malaysia in the month of August. In addition to the increased volumes sales by domestic producers, the ADD would also alleviate pricing pressures in the industr y, suppor ting improvement in realisations and margins.

Automotive sector shows improvement India Indian automotive glass industr y got some respite from the positive numbers of automotive sales in the month of August after a hiatus of nine months. Passenger vehicle wholesales in the countr y rose by 14.16 per cent in August to 2,15,916 units driven by pent-up demand, according to the data released by industr y

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body SIAM. According to the latest data by the Society of Indian Automobile Manufacturers (SIAM), passenger vehicles wholesales stood at 1,89,129 units in the same month last year.

Passenger vehicle sales have returned to positive territor y in August after nine consecutive months of

decline. It was in October last year that the segment had posted a marginal growth snapping 11 continuous months of decline in sales.

“We are beginning to obser ve growth which is instilling confidence back into the industr y, especially in the two-wheeler and the passenger vehicle segments,” SIAM President

Kenichi Ayukawa said.

Dominated by Asahi India Glass, Indian automotive glass industr y has been going through one of its worst phases in last three decades. Most of the leading automotive glass producers and downstream processors have been operating at ver y low capacity utilisation rates during the last six months.

AG 20-4 asianglass

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News

Drop in tariffs opens export door Indonesia Indonesian exports of clear and tinted float glass may now enter the Philippine market free from safeguard tariffs, the Trade Ministry has announced.

Philippine's Trade and Industry Department and Tariff Commission issued its decision to drop a safeguard investigation that had been started in February 2019 on imports of clear and tinted float glass from all countries, including Indonesia.

Srie Agustina, the acting director general of international trade at the Indonesian Trade Ministry, said that the Philippines would impose a safeguard tariff only if

it could find evidence that a rise in glass imports caused serious injury or threatened injury to its domestic industry, in line with the rules set by the World Trade Organization (WTO).

“In the case of Indonesian glass, the investigation has not found such evidence,” Srie said in a statement. However, the Philippines had already imposed a temporary safeguard tariff of 2,385 pesos (US$57.43) per ton between October 2019 and May, leading to a severe drop in Indonesian glass exports. The value of Indonesian glass exports fell by 79 percent year-on-year

to $270,400 in the JanuaryApril period overall. Indonesia still managed to book an annual increase in glass exports of 56.8 percent to $635,000 in 2019, the ministry said. The newly issued decision to cancel the tariff is expected to lead to a recovery in Indonesian glass exports, said Indonesian Trade Minister Agus Suparmanto. “This decision will definitely boost Indonesian glass exports to the Philippines again,” said Agus. Prior to the decision, Indonesia had submitted a written argument against the tariff to the Philippines, was represented in hearings and worked with

Philippine importers, said Pradnyawati, the director of trade safeguards at the ministry.

“We should be proud of Indonesia’s successful joint effort against the investigation,” said Pradnyawati. “But we have to remain wary because the Philippines has been actively using safeguard instruments lately, such as a special agricultural safeguard against our instant coffee.” Instant coffee, which is one of the top-four Indonesian exports to the Philippines, saw an export decline of 15.24 percent year on year to $2.07 billion in the January-April period.

KCC to merge with Autoglass Corp South Korea KCC Glass Corp., South Korea's largest manufacturer of architectural glass, will merge with a leading automotive glassmaker to bolster overall competitiveness going for ward, corporate sources said in September.

KCC Glass and Korea Autoglass Corp. said they will hold a general meeting of shareholders on Oct. 29 to get approval for the plan, with the actual tie-up to be completed

by Dec. 1. The merger will make the combined entity a

top player in the domestic glass industr y.

The swap ratio for the merger has been set at one KCC Glass share for ever y 0.4757 Korea Autoglass share. KCC Glass will carr y on the combined businesses with Korea Autoglass to be absorbed into the larger company.

KCC Glass, par t of the larger construction-business focused KCC Group, controls half of the countr y's plate glass, which are used in various buildings

and homes.

Korea Autoglass, already a subsidiar y of KCC Glass, generates 90 percent of its sales from car safety glass. It works closely with carmakers such as Hyundai Motor Co., Kia Motors Corp., and GM Korea, as well as expor ting its products abroad. KCC Glass repor ted sales of 325.6 billion won (US$274.1) in the second quar ter with its size to balloon to 529.5 after the takeover.

Its operating profit is expected to reach 35.3 billion won from

the current 10.4 billion won.

The company's total assets will rise to over 1.67 trillion won from 1.19 trillion won.

Korea Autoglass CEO Woo Jong-chul said that by solidifying the process of producing architectural and automotive glass under a single roof, the merger will bolster efficiency and strengthen overall competitiveness. He added that by working together, more effor t can be made in research and development that can fur ther lead to growth.

Klil looks to capitalise on “the new normal” UAE/Israel In wake of the UAE-Israel normalization deal, Klil, Israel’s leading aluminum windows, blinds and curtains company, is in talks to sell its window-fixing service to firms in Dubai.

Klil has a registered patent, the innovative eGRAF device, to replace broken or cracked glass on curtain walls.

About 85% of the building towers in the UAE are built with glass curtain walls.

The company had made connections with aluminum and infrastructure contractor

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companies in the UAE but, due to the lack of diplomatic relations between the two states, couldn’t realize them.

Klil’s method is to do the work from inside the building, which costs a few thousand dollars, as opposed to the practice today, which is to do the work from outside, using cranes, which costs tens of thousands of dollars.

According to industry experts, almost every building in the UAE has at least one faulty glass window that property

owners avoid replacing because of the costs and the complex operation.

The eGRAF system is being installed for the first time in Israel in the Golf project in Tel Aviv.

Tzur Daboosh, chairman of Klil, said that several years ago the company tried to negotiate with aluminum contractors in Dubai but encountered difficulties due to the political situation.

The business potential is estimated at NIS 100 million per building.

Despite the corona crisis, Klil recently concluded the second quarter of 2020 with revenues of NIS 77.9m. and a net profit of NIS 11.2m.

Klil’s cash flow from operating activities in the first half of 2020 increased to NIS 25.4m., compared with NIS 23.6m. in the corresponding period last year.

Klil is the largest company in Israel in the field of aluminum products and especially in the field of windows and glass curtain walls.

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News

Xinyi rides through COVID storm at full throttle China Crisis? What crisis? Chinese solar glass manufacturer Xinyi has reported another impressive set of first-half figures despite the Covid19-related shock which affected the country during the first three months of the year.

Whilst admitting a national holiday period extended by the pandemic affected processing such as tempering and coating of its products, Xinyi Glass reported its solar furnaces continued to operate uninterrupted during the first six months of the year.

That non-stop production helped drive glass sales worth HK$3.49 billion (US$450 million), up from HK$2.92 billion in the same period of last year, as the company posted total first-half net profits of HK$1.61 billion – up from HK$1.07 billion – and suggested an interim dividend be raised from the HK$0.055 per share handed out in the first six

months of last year to HK$0.085.

Although returns were also up in the less important solar project business – from HK$1.02 billion in 1H last year to HK$1.1 billion – and fell in the engineering, procurement and construction services business, from HK$47.6 million to HK$33.8 million, it was the glass division which caught the eye.

A rising proportion of sales of more lucrative thin glass and a rising average selling price were only partially counterbalanced by exchange rate losses from the renminbi and Malaysian ringgit against the U.S. dollar, for a company with production facilities in China and Malaysia. In fact, although Covid-19 saw the selling price of solar glass 17% lower at the end of June than at the start of the year, the six-month average price was still 3-5% higherthan during the same period of

last year. That added up to a remarkable gross profit margin rise of 11.6 percentage points for Xinyi’s solar glass, which offered a 38.9% mark-up during the first half.

Although the manufacturer noted the uncertainties affecting demand in a Covid-19 global market, the company is set to press head with plans to open a second 1,000 ton/day-meltingcapacity solar glass production line in Guangxi autonomous region this month, having debuted a facility of the same scale there at the end of June. Xinyi said it would open a fresh 1,000-ton line in Anhui in each quarter of next year and is also on track to open its first low-iron silicon sand mine in Guangxi in September, helping to further bear down on raw material costs.

The company reported it had acquired 190 MW of solar project

capacity during the first half, with the purchase of three project companies; had developed 270 MW of capacity in China – with 100 MW of it of unsubsidized ‘grid parity’ status; and intends to maintain its generation capacity target of adding 600 MW of projects this year. The company claimed to have 2,920 MW of solar capacity, including 156 MW of PV rooftops, at the end of June.

The investment necessary to surf the global solar wave has seen Xinyi’s cash reserves dwindle from HK$4.35 billion at the end of June last year to HK$2.79 billion at the halfway point this time around, but the balance sheet retains a healthy appearance and that spending included HK$12.1 million donated to combat the spread of the coronavirus, in addition to the raised dividend.

Piramal bids approach moment of decision Sri Lanka/India Potentially four bidders are vying to by India’s Piramal Glass, the parent of publicly traded Piramal Glass Ceylon, according to sources. Blackstone Group Inc. and Partners Group Holding AG are in the running to buy the firm have long been suspected to be involved, but now Apollo Global Management and Multiples Alternate Asset Management have also thought to have entered the race. All four are now in due diligence, in a process being overseen by Bank of America.

Piramal Enterprises is also in pharmaceuticals and financial services.

Indian billionaire Ajay Piramal’s conglomerate is seeking a valuation of $1 billion (Dh3.67bn) for Piramal Glass from the sale, and a winner could be named as soon as October, they said. Negotiations are ongoing and the investment firms can decide not to proceed with offers, according to those with knowledge of the matter.

Other bidders could also emerge, and Mr Piramal could

choose to keep the business, they added.

Piramal Enterprises has been raising funds through debt issues as well as weighing sales of some of its non-core units. In June, the group agreed to sell a 20 per cent stake in its Piramal Pharma arm to private equity firm Carlyle Group for $490 million, giving the business an enterprise value of $2.7bn.

Mr Piramal has also said he intends to exit his investment in the parent of shadow financier

Shriram Capital, while Piramal Enterprises has recently been seeking to introduce new investors to shore up the capital for its own shadow lender, Piramal Capital & Housing Finance.

Piramal Glass makes glass packaging and has factories across the US, India and Sri Lanka with a total capacity of 1,475 tonnes per day, according to its website. The former Gujarat Glass was acquired by Piramal Group in 1984.

Schott India optimistic about pharma glass India Newly appointed Managing Director at German glass major, SCHOTT AG's India arm, Schott's tubing plant in Gujarat, Pawan Kumar Shukla is optimistic about the role of glass packaging in pharmaceutical industry.

With his 25 years of experience in the glass, lighting,

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pipes and electronics industry, Shukla was earlier holding the post of President Operations at Surya Roshni Ltd. According to Pawan Shukla, "India is a frontrunner of the global pharma industry and primary pharma packaging is one of the most vital components in the entire production chain.

While the domestic market is our key focus, our India plant also caters to the Asian market, thereby contributing to the pharmaceutical industry."

SCHOTT is delivering its highly specialised Fiolax glass tubes to leading pharma packaging players in India and abroad for preparing primary packaging

products such as vials, syringes, etc.

Supporting the world’s fight against Covid-19 with vials capable of holding up to 2 billion vaccination doses, the German leader has reached agreements and started supplying to leading pharmaceutical companies including key players in India.

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Global View

Encirc shifts to natural gas UNITED KINGDOM As part of a GBP40m. investment programme taking place over the next three years, Encirc has converted its production facilities in Co Fermanagh to natural gas, a move which will help ensure it is a more sustainable manufacturer for the future.

Encirc, which manufactures containers for some of the world’s most recognised brands, is a key industrial connection to the new SGN Natural Gas network in the western area.

The purpose-built Derrylin plant which opened in 1998 and has been producing highquality container glass ever since, was the first new-build glass manufacturer in the UK and Ireland in over 30 years.

Encirc is part of the Vidrala group and currently employs more than 1,500 people across three European sites in Derrylin, Co Fermanagh; Elton, Cheshire; and Corsico, Italy.

Highlighting the significance of the project, Adrian Curry, Encirc’s Managing Director outlined that the firm aims to play a critical role in creating a more sustainable future from minimising the environmentalimpact of manufacturing to supporting communities.

He continued: “As a manufacturer we play a critical role in creating a more sustainable future for our planet.

This holds true from minimising the environmental impact of our manufacturing, right through to supporting the local communities in which we operate and our employees’ lives. Having access to mains natural gas in Derrylin is enabling Encirc to further reduce its carbon footprint and we see this as a very progressive development for our business.

“It was quite exciting to see the state-of-the-art equipment arriving for installation on site last year. “Switching from heavy fuel oil is integral to Encirc’s strategy to boost efficiency and minimise energy consumption across our facilities.

“These initiatives will further reduce our own environmental impact and support our customers in also shrinking their carbon footprint.”

Danny O’Malley, Director of SGN Natural Gas, welcomed Encirc’s conversion to natural gas in Derrylin as a vote of confidence in the new network which has now been extended to key towns in Counties Tyrone, Fermanagh and Londonderry.

Praising local company’s

innovative and progressive approach to minimising its environmental impact Mr O’Malley said: “Encirc was one of the first major industrial facilities identified by the Gas to the West project to help ensure it is a more sustainable manufacturer for the future.

“The Derrylin plant was successfully converted to natural gas within weeks of the new infrastructure becoming live, wholly supporting this local company’s innovative and progressive approach to minimising its environmental impact.

“A growing portfolio of large manufacturers, food processing companies and commercial users are now operating with natural gas while others are proceeding to connection.

“We are also looking forward to converting many more homes to natural gas in our network area as soon as possible.

“This ongoing major energy infrastructure project representing an investment of more than £250 million is also making a real difference to the local economy.

“The expansion of the natural gas network is great news for consumers in the western region who will benefit from an alternative energy choice for their

Takeover goes under further scrutiny ROMANIA Romania's competition authority said that it is looking into the recent takeover of the local subsidiaries of Moldovabased Glass Container Company and Glass Container Prim by Vetropack Austria Holding.

In order to determine whether the concentration is compatible with a normal competitive environment, the Competition Council will consider the notified transaction under the merger regulation, it said in a press release on Monday.

As AG went to press, the anti-trust body was to take a decision within 45 days.

Under the deal, Vetropack will take over indirectly two Romanian units of Glass

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Container Company and Glass Container Prim, namely Glass Container Company-SP S.R.L. şi Glass Container Prim-SP S.R.L. The main activity of the two local subsidiaries is the sale of glass packaging produced by their parent companies in Moldova.

Glass Container Prim is a producer of a wide range of green, brown and transparent glass packaging solutions. Its sister company Glass Container Company is a supplier of glass solutions which exports its products to over 20 countries worldwide.

Vetropack Austria Holding is a subsidiary of Swiss group Vetropack Holding which is

active in the European glass packaging industry.

At the beginning of August, Western NIS Enterprise Fund (WNISEF) and Bucharest-listed Purcari Wineries said that they had reached an agreement to sell their stakes in Moldovabased Glass Container Company and Glass Container Prim to Vetropack Austria Holding.

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homes and businesses.”

SGN Natural Gas will be delivering natural gas mains, services and meters to nearly 40,000 business and domestic customers over the next 40 years in Artigarvan, Coalisland, Cookstown, Derrylin, Dungannon, Enniskillen, Magherafelt, Omagh, and Strabane.

NEWS IN BRIEF The world-renowned pioneer in glass melting and conditioning successfully rebuilt a furnace at Vetri Speciali’s Ormelle plant, followed by a second project to address issues with defective bottles at their San Vito plant in 2019, where SORG had to reduce stones and inclusions in the glass.

By redesigning the melting furnace with state-of-the-art equipment, SORG allowed the glass more residence time in the hot zones of the tank and as a result inclusions were significantly reduced, the conditioning quality of the glass was improved and lower NOx emissions and energy consumption was achieved.

SORG’s main strength came from the optimized furnace design and stateof-the-art equipment (an EME-NEND® batch charger, combined with SORG gas combustion equipment, working end and forehearths).

Together, they enabled Vetri Speciali to achieve improved glass quality and higher productivity.

Following the successful rebuild of these two furnaces, the SORG Group has been commissioned for its third project with the glass container manufacturer.

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News

“Glass Futures” gets public funding boost UNITED KINGDOM A Merseyside project that will help "transform the world glass industry" and create hundreds of jobs is to receive £9m public funding as part of plans to boost the region's Covid recovery.

Funding is expected to be approved on Friday by the Liverpool City Region combined authority for the Glass Futures project in St Helens, which is set to become a national centre of excellence in glass innovation.

The 90,000sq ft centre will aim to revolutionise and eliminate CO2 from glass production from the traditional centre of the UK glass making industry, St Helens.

Glass Futures is a unique, industry-backed research and technology organisation leading collaboration across some of the largest companies in the global glass industry and its supply chain, together with academia and government.

It will bring together researchers and industry experts, such as British Glass and Glass Technology Institute, O-I Glass, Guardian Glass and

Siemens, together at a hot glass site. The project is set to benefit from an immediate £9m funding boost from the combined authority’s Strategic Investment Fund, to be considered by the authority on Friday.

St Helens Borough Council has agreed to provide up to £900,000 support to help to develop the idea, and is also exploring other ways of supporting the development by taking a lease on the building which would be on land next to St Helens RFC’s Totally Wicked Stadium. Metro Mayor of the Liverpool City Region Steve Rotheram said: “This project is a prime example of how we can build on our strengths as a city region to drive our economic recovery.

“St Helens has always been a global leader in the glass industry and Glass Futures will be a key part of making sure it retains that role in the future of the industry as it decarbonises, whilst being a key driver for jobs and skills.

“Taking Glass Futures

forward is a prime example of the kind of partnership that the Combined Authority, our local authorities, the private sector, and academia can forge to create world class facilities in our city region and Build Back Better from Covid-19.”

The combined authority said the site in St Helens could create around 50 high skilled jobs directly, with hundreds of indirect jobs in total - and will "kick-start" investment into the area. A public consultation on Glass Futures is expected to launch later this year before a planning application is submitted in early 2021.

Glass manufacturing practices are currently responsible for 2m tonnes of CO2 per annum in the UK alone, and the 90,000 square foot facility will be centred around a 30 tonne a day low carbon demonstration furnace.

The project will create the world’s first openly accessible, commercially available, multidisciplinary glass melting facility with provision for research and development

trials to decarbonise the UK glass industry.

The £54m project – which will have the first and only experimental furnace of its kind in the world – has been highlighted as a key project to driving economic recovery in the Liverpool City Region's £1.4bn ‘Building Back Better’ economic recovery plan for the whole city region.

St Helens Borough Council leader, David Baines, said: “St Helens is a borough with a proud industrial heritage. We have a magnificent legacy of industrial innovation, especially in the glass industry.

"While we are proud of our history, Glass Futures is all about innovation and looking to the future, and we want our borough to be at the very heart of this exciting project.

"St Helens Borough Council is committed to helping to make it happen and this latest funding decision from the city region will be very welcome. The Glass Futures project will put St Helens on the regional, national and international stage.”

Kioo goes legal over import duty TANZANIA Tanzanian glass manufacturer Kioo Company Ltd has taken the Kenya Revenue Authority to the East African Court of Justice following the introduction of a 25 per cent excise duty imposed on imported glass.

Based in Dar es Salaam, Kioo is one of the largest manufacturers of container glass used for packaging of soft drinks, beer, alcohol and food in East and Central Africa.

The company exports almost 60 per cent of its products outside Tanzania, after meeting its local requirement.

In the application, Kioo claims Kenya recently enacted the Business Laws (Amendment) Act 2020, which amended Kenya Excise Duty Act 2015 by introducing excise duty on imported glass at a rate of 25 per cent with effect

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from March 18, 2020. They say the introduction of excise duty, excluding glass bottles for packaging pharmaceutical products, is a breach of the Customs protocol.

Kioo is represented by the firm Anjar walla & Khanna, and Kenya’s Attorney General Paul Kihara is the respondent.

They want EACJ to ensure Tanzania’s rights under the EAC Treaty are not violated, the enacted excise duty is removed, and that Kenya is fined for their actions.

Under the Kenyan Excise Duty Act there are no exemptions granted to goods imported from the EAC partner states as the Act defines importation “as bringing or causing goods to be brought into Kenya from a foreign countr y, a special economic zone or an export

processing zone”.

Tanzania accused Kenya of providing “preferential treatment of domestic products vis-à-vis similar products originating from other EAC Partner States” in violation the EAC Customs Union.

Tanzania is concerned that KIOO, is losing its competitive edge by paying duty at a rate of 25 per cent on its imported inputs, which should have ordinarily attracted zero per cent or 10 per cent duty as per the EAC Common External Tariff (CET). CET guarantees zero per cent tax on raw materials, 10 per cent for intermediate goods and 25 per cent for finished goods. Tanzania further claims that the 25 per cent duty on its glass bottles into Kenya is being incurred by her customers in Kenya,

thereby making the business uncompetitive. This likely to squeeze out Tanzania and her neighbours out of the Kenyan market.

“The result is that the price of glass bottles exported into Kenya by Tanzania has become more expensive than locally manufactured glass in Kenya and therefore Kenyan companies have reduced their demands /imports from Tanzania. In the current economic hardship caused

by Covid-19, the Kenyan companies are likely to stop importing glass from Tanzania and any other glass bottle manufacturers within the EAC Partner states,” the lawyers say. The move is also likely to render more than 600 workers at Kioo jobless. Kenya is yet to respond to the application.

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News

Museveni pledges closer bilateral ties with Iran UGANDA President Yoweri Museveni has assured the outgoing Iranian envoy that Uganda will continue to co-operate with Iran in a number of sectors and has put glass at the top of the agenda.

The President made the remarks, during a meeting with Ambassador Seyed Morteza Mortazavi, who had paid a courtesy call on him at State House, Entebbe. The envoy has ended his three-year tour of duty in Uganda.

Museveni emphasised that the two countries have enjoyed mutual relations since

1986 and, therefore, continue to cooperate.

Museveni urged the Iranians to establish manufacturing plants in Uganda, like the Chinese have done at Kapeeka.

This, Museveni said, will promote businesses focused on availability of markets.

Museveni assured the ambassador of future cooperation and wished him well in his next assignment. Under the term of the outgoing envoy, both Uganda and Iran forged closer ties and signed a number of trade agreements.

For instance, in 2017, the Iranian ambassador signed an agreement with the Uganda National Chamber of Commerce and Industry, to attract Iranian investors to Uganda.

The agreement allows Iranian venture capitalists to set up banks, join the mining, transport and agriculture sectors.

In the mining sector, the agreement allows Iranian investors to venture in sand and quarry mining and soft minerals needed for glass production.

In agriculture, the pact encouraged Iranian investors to seek opportunities in value addition and set up a wheat flour processing factory at the Soroti Industrial Park.

The establishment of glass and glassware factories by the Iranian investors would reduce the importation of glass products from the UK, Kenya and China. With several unemployed youth, it had been targeted that the industries set up by the Iranian investors would create an estimated 20,000 jobs.

Fuyao posts “sizeable” loss UNITED STATES President Yoweri Museveni has assured the outgoing Iranian envoy that Uganda will continue to co-operate with Iran in a number of sectors and has put glass at the top of the agenda.

Chinese auto glass supplier Fuyao Glass Industr y Group Co. said its U.S. subsidiar y

posted a net loss of 92.1 million yuan ($13.4 million) in the first half of this year, as opposed to a net profit of 147.6 million yuan a year earlier.

In its mid-2020 financial repor t, Fuyao Glass, a Shanghai-listed company, blamed the loss of its U.S.

subsidiar y on the impact of the COVID-19 pandemic. Other suppliers in the U.S. posted major losses for the second quar ter, par ticularly in April and May when most U.S. auto production was halted.

Affected by the pandemic, operating revenue of the subsidiar y, Fuyao Glass

America, tumbled 30 percent from a year earlier to 1.3 billion yuan in the first six months, according to the repor t.

Fuyao Glass America has plants in Ohio and Michigan that produce glass for vehicles. It also has a factor y in Illinois that makes float glass for other industries.

Zippe concludes Wiegand-Glas deal GERMANY ZIPPE Industrieanlagen has now executed a major order for Wiegand-Glas. This project is about a new batch and cullet plant including batch transport as well as two cullet return systems for the Wiegand glassworks in Schleusingen (Thuringia / Germany). The first line, which feeds the new melting furnace 1, was put into operation successfully at the beginning of June 2020. In Schleusingen, two new production lines are now going to be built next to the existing production site. Company ZIPPE received the order from Wiegand-Glas for the erection of the necessary batch and cullet plant as well as two cullet return systems on a turn-key basis. This new 900tpd batch and cullet plant in Schleusingen is designed for

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feeding two melting furnaces with a capacity of 450 tons per day each. The sand feeding of the silos is executed with a mechanical system. The other raw material silos are fed pneumatically. All silos are weighed in order to measure the exact raw material stock. Eight container scales and two small component scales are employed for weighing the raw materials.

For mixing the batch, three high duty pan mixers are used.

Via a redundant batch transport

the batch is then transported to the corresponding furnace pre-silos.

Furthermore, a very complex cullet dosing system is integrated in the batch house.

Various sorts of external cullet can be dosed with the help of twelve belt scales. The addition of internal cullet is executed via three further belt scales directly inside the furnace building.

Additionally, two cullet return systems are part of the ZIPPE scope of supply. Here, five scraping conveyors as well as the proven ZIPPE crusher technology comes into operation.

The generated internal cullet is transported directly into the cullet silos in the furnace building and fed into the melting process again. The ZIPPE scope of supply also comprises the complete

steel work incl. silos, equipment delivery, control system as well as the complete services such as installation, cabling, pipework, commissioning and training of customer personnel.

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News

People and Places SCHOTT puts new MD in place India SCHOTT AG, a leading international specialty glass and technology group, has announced Pawan Kumar Shukla as the new Managing Director for SCHOTT Glass India.

Shukla brings over 25 years in the glass, lighting, pipes and electronics industry and comes with a strong background in techno-commercials.

Prior to this role, he was the President Operations at Surya Roshni Ltd, an Indian multinational manufacturer for specialty glass tubing and lighting.

An alumnus of the prestigious Indian Institute of Technology, Kanpur, in ceramic engineering as well as material science and metallurgy, Shukla has also worked with Corning JV in the CRT Division as a manufacturing head for twelve years. Commenting on his new role, he said, “India is a frontrunner of the global pharma industry and primary pharma packaging is one of the most vital components in the entire production chain. I am proud to be associated with SCHOTT, being one of the oldest and most trusted manufacturers of tubular glass worldwide.

While the domestic market is our key focus, our India plant also caters to the Asian

market, thereby contributing to the pharmaceutical industry and the Indian government’s vision of becoming a global pharmaceutical hub.”

virus. We remain committed in our support to the country’s pharmaceutical value chains, by providing high-quality glass products for pharma packaging

“SCHOTT’s Jambusar plant is one of our most advanced tubing plants worldwide."

At the Jambusar facility, Shukla’s main aim would be to achieve the full potential of his team by empowering them with responsibility, trust and acknowledgement.

Further talking about the company’s overall commitment to support the Indian pharma industry, he added, “SCHOTT also takes awareness of the Indian Health Ministry’s initiative to provide affordable and accessible healthcare to its citizens.

Moreover, this year has brought many challenges due to the Coronavirus pandemic. But we are proud to be a contributor in a sector, where everyone has stepped up to fight the novel

while ensuring the highest global safety standards.”

Patrick Markschlaeger, Executive Vice-President, SCHOTT AG, Business Unit Tubing noted, “SCHOTT’s Jambusar plant is one of our most advanced tubing plants worldwide. The quality of glass produced here is at par with any other production site, including Germany.” “We are pleased that the manufacturing site is under the capable leadership of Mr. Shukla, who is an industry stalwart himself.

He brings with him decades of technical and managerial expertise in the glass manufacturing space. We look forward to seeing SCHOTT

India achieve even higher standards and success under his guidance”, he said.

Presently, SCHOTT is delivering its highly specialised Fiolax® glass tubes to leading pharma packaging players in India and abroad for preparing primary packaging products such as vials, syringes, etc.

Supporting the world’s fight against COVID-19 with vials capable of holding up to 2 billion vaccination doses, the German leader has reached agreements and started supplying to leading pharmaceutical companies including key players in India.

Given the exponential rise in demand for quality glass for pharma packaging, SCHOTT had inaugurated a new tank facility in its Jambusar plant, following an investment of €21 million in 2018. Even before the Coronavirus pandemic, the company had forecasted a rapid growth trend, and had thus committed additional investments of €26 million for yet another tank facility last year. With a combined investment of €47 million and two new plants, SCHOTT’s India plant is well on track to double its production capacity, enabling supply of its FIOLAX® glass tubing for both domestic and export demands.

Horn expands its local networks Brazil With a new subsidiary in Brazil, the German glass plant manufacturer HORN Glass Industries AG is expanding its local availability in South America. The new subsidiar y HORN Glass Brazil Ltda. with office in São Paulo, expands the HORN Group and is now the contact for the glass industr y throughout South America.

The new company is managed by an experienced specialist in the glass industr y, Mr. Thiago Metti, who was able to represent the company in

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his previous job. Thanks to his many years of experience, he is the ideal contact for the glass industr y throughout South America for all matters relating to glass melting furnaces and glass production plants.

The Brazilian subsidiar y is supported by specialists from Germany, which means that the glass industr y can enjoy the usual high quality. But in addition, thanks to the new location in South America, the parent company from Germany can ser ve the glass industr y

even more effectively in sales, project management and ser vices.

The new subsidiar y is located in São Paulo and can be reached via: HORN Glass Brazil Ltda.

Av. Anita Franchini, 853 - Apto 83 Santa Terezinha / São Bernardo do Campo São Paulo / Brazil CEP: 09780-050 Mail: thiago.metti@hornglass. com.br Mobile: +55 11 9 8916-6580

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Fenzi secures new logistics base Italy Even during these difficult times – complicated by the impact the Covid-19 pandemic is having on the global economy, with repercussions in one of the more solid sectors, like the glass industry – the Fenzi Group is investing in the future, upgrading its Tribiano (Milan) facility, strategic headquarters and hub of operations around the world for the global leader in chemicals for secondary glass processing.

Engaged in the production and development of the most advanced solutions for all its business units – from sealants for high-performance insulating glass, to decorative paints for all

kinds of applications, to protective paints and chemical solutions for mirror manufacturing – the Italian facility is expanding with a new integrated logistics center to optimize efficiency in warehouse management and shipping.

With a surface area of more than 15,000 m2, the new plant is highly automated and designed to make best use of the company’s innovative logistics management techniques. It is equipped with the most cuttingedge structural technologies to optimally digitize the flow of raw materials and shipping, thereby improving traceability while having a decidedly positive

impact on the overall quality of the Fenzi Group products.

This key investment in the new logistics center will drive faster and more effective client services, with the utmost optimization of time and greater efficiency of processes. It also fits into a broader framework of upgrades to projects, services and sales initiatives with which the company aims to strengthen its leadership position in the world of glass.

The project is also informed by future needs, aimed at managing greater volume and, above all, new products.

“The Covid-19 crisis has not stopped our determination to

continue to improve – remarked Matteo Padovan, General Manager of Fenzi Italia – Our enthusiasm is intact and we continue to invest in the development of new services to maximize our connection with our clients, becoming even more efficient and continuing the Group’s growth process begun almost 80 years ago. At this juncture, it is naturally about making judicious, well thought-out choices to maintain balanced development and renewed optimism in the future. Special thanks go to all of our partners and Fenzi employees whose commitment and passion are clear, allowing us to obtain these results.”

OBITUARY: Helmut Sorg On 16th July 2020 Helmut Sorg, the long-serving managing partner of Beteiligungen Sorg GmbH, died unexpectedly at the age of 80. Helmut, a member of the fourth generation of the family, was still at the helm of the family business, working together with his son Alexander and his brother Karl-Heinz.

As a consequence of post war difficulties in East Germany Helmut left the family home in Breitenbach in the state of Thuringia at the age of 14 and moved to the west to live with his uncle in Speyer. After graduating from high school, he went to the renowned technical university at Aachen to study industrial furnace and heating technology. His passion for and commitment to glass furnace technology was already evident in his early years. Helmut spent most of his school and semester holidays working in the family business.

He graduated from Aachen at the age of 24 and began working full-time for Nikolaus Sorg in 1964. The company had moved to West Germany in 1950 following the second world war and was still re-establishing itself.

In 1978 he initiated the creation of a single technical department within the Company and assumed responsibility for, amongst other things, all technological and development matters. This move formed the basis for the subsequent and lasting success of Sorg as one of the leading suppliers to the glass industry worldwide.

Initially he focussed on the end-fired regenerative furnace and pushed for the development of increasingly larger furnaces of this type. At the same time, he was able to find customers who were ready to accept the technical challenges. This led to the industry-wide replacement of antiquated cross-fired furnaces by the modern end-fired technology.

During this period Helmut also promoted the development of the VSM® all-electric furnace design and the vertical U-flame furnace, which was of great significance for the automatic production of stemware. At the time this was an important area of business for the Company. At the beginning of the 1980s he formed a company destined to produce tableware, the American Stemware Corp. in Greensville, PA. USA. One reason for this step was to demonstrate the suitability of the VSM® all-electric furnace for the production of highest quality lead crystal glass. He was also responsible for the development of the LoNOx® Melter, designed to give a significant reduction in NOx emissions.

Towards the end of the 1990s Helmut gained the contract from an important customer to build the largest Oxy-fuel Melter in Europe.

Such projects exemplified Sorg’s leading role in the development and

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design of innovative energy-efficient and low emission glass melting furnaces. Many of his ideas were the basis of other developments that subsequently resulted in patents that bore his name.

At his instigation the company took over EME in Erkelenz in 1987. Under his management this company has become a renowned supplier to the glass industry Helmut was also closely involved in the development of the installation and service operation. He was able to assist Sorg Feuerungsbau und Service, founded in 1974, in the acquisition of contracts in various parts of the world. One year after the fall of the Berlin wall he was able to re-form Glasofenbau Leipzig, a small service company with its roots in the Sorg family business prior to the second world war. Long before the opening of the EU internal market Helmut established co-operative arrangements with companies in eastern Europe for the supply of steelwork and the provision of services.

The development of the EU internal market led him to form SKS GmbH to combine all service activities of the Sorg Group. He also instigated the recent formation of Siam Furnace Construction in Thailand, thus completing the arrangements for the provision of furnace building services outside of the EU. Helmut initiated Sorg’s successful entry into the flat glass sector trough a co-operation which led to the acquisition of ghs GmbH, a specialist consultant to the float industry. The Company’s competence in the float industry is demonstrated by the excellent results achieved.

In recent years Helmut focussed on the development of forwardlooking, low emission melting concepts. In 2012 the first batch preheater was commissioned as part of the new “Batch3” concept.

Under his aegis the Company has developed an innovative, heavily electrically heated, horizontal furnace, now being introduced into the market under the name CLEAN Melter®.

Helmut Sorg’s successes were the result of his purposefulness, his vision and his competence. However, of equal importance were his amenable personal qualities that allowed him to establish excellent social contact with many customers. He was highly respected by the staff of the SORG Group companies, who valued his straightforwardness, fairness and generosity.

His legacy as a person and as a Managing Partner of the Sorg Group is shown by his close relationship with employees and a company wellplaced for the future.

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Batch

Trona mines consider post COVID World CHINA // Soda Ash Price rises falter on cargo availability China’s soda ash market extended gains as producers stood firm on higher offers in a bid to recover margins on the back of production cost pressures. But the availability of competitive deep-sea cargoes amongst other factors, may continue to weigh on sentiment. Other than squeezed margins, supply constraints amid a spate of soda ash plant turnarounds in China

bolstered the sentiment of suppliers as they targeted offers at $175-185/tonne free on board (FOB) China for the dense grade soda ash. In contrast to China’s domestic demand which is enjoying a boost from the downstream glass sector amid a recovery in the housing market - southeast Asia’s buying sentiment weakened due to a resurgence in the coronavirus outbreak in countries such as Vietnam. Downstream buyers

in Asia indicated that price was less of an issue compared to the loss in demand and uncertainties due to the coronavirus outbreak resurgence. Across Asia, the combination of a slowdown in the downstream construction industries and the availability of deep-sea cargoes at lower prices kept buyers on the sidelines. Underpinning the poor market conditions, selling indications for Turkey origin bulk cargoes surfaced at a steady-to-

soft $160-180/tonne cost and freight (CFR) NE/SE Asia level, depending on the volume. Selling indications in the last couple of months averaged $170-180/ tonne CFR NE/SE Asia. This contrasted with China origin offers at up to $200/tonne on a CFR NE/SE Asia basis, which elicited muted buyers' response. Some buyers opted for a wait-andsee stance for an anticipated inventory build-up in China due to poor export sales.

CIECH hit by COVID, but keeps aiming high POLAND // Soda Ash Ciech, the second largest European soda ash producer, posted a net loss of zloty (Zl) 5m ($1.3m) in the second quarter on the back of coronavirus pandemicinduced lockdowns across the region.

The company said it expects a recovery in the “shape of an elongated U” for most of its businesses.

The volume of soda ash sold by the company in Q2 fell by 14%, although Ciech said this compared favourably to the overall 37% second-quarter soda ash export decrease calculated for US producers and more of 20% decline for Turkish producers.

“We carefully judge that in the case of the soda, salt and silicate business, the recovery will take the shape of an elongated U letter, and in the case of foams, we see a strong V-shape reflection. The remaining businesses do not feel any significant effects of the pandemic at the moment,” said Ciech’s CEO Dawid Jakubowicz.

“At the same time, as a result of turbulence caused by the lockdown and economic slowdown, we are dealing with a delay in the implementation of the investment program, but its extension in the period of market uncertainty does not affect the goals set out in the Group's strategy, but only the timing of their implementation.”

Over the last 1.5 years, the CIECH Group has mplemented a series of improvements in the production of soda ash in the

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Group's Polish plants, which account for the annual production of soda of nearly 1.5 million tons.

The activities resulted in smoother production, a more efficient exploitation of raw materials in technological processes and a reduced rate of CO2 emissions per ton of soda ash produced.

The Group will continue its activities aimed at reducing CO2 emissions by around 30 percent in the period of the next five years vs year 2019, which in the face of rising CO2 certificate prices remains the main challenge for soda manufacturers. Combined with the growing CAPEX aimed at reducing emissions, this may lead to pressure on increasing soda prices on the European market.

Soda ash production is energyconsuming – in both Polish plants of the Group there are dedicated heat and power plants supplying process steam necessary for soda ash production. Energy efficiency is one of the key determinants in terms of production expenses and the competitiveness of soda production.

"Coherently with our strategy, over the last 1.5 years we have been working intensively to improve the efficiency of soda production.

The discernible reduction of unscheduled production outages, the increase of the actual levels of soda production and the decrease of CO2 per ton of soda ash produced are amongst the results of our work, which translate into real savings," says Dawid Jakubowicz, President of

the Management Board of CIECH S.A. Over the last year, the CO2 emission rate per ton of soda in the Polish plants has seen a reduction by approx. 2%, which enables savings of several million zlotys a year, while the effective production capacity[1] has already increased by approx. 1.5%. CIECH is taking advantage of the growing competitiveness achieved as a result of the activities in the Sales & Operations Planning area. This allowed CIECH to use the production capacity and simultaneously optimize the amount of raw materials in the soda production process. The result is a smooth production process and an appropriate level of stocks.

"This is just the beginning, as we are in the process of implementing a plan to increase the efficiency of soda production.

We plan further initiatives, including significant ventures such as the partial transition to gas in our Inowrocław plant, as well as the development of 150 initiatives related to increasing the efficiency of our heat and power plants. These efforts have an ample impact on the level of our competitiveness and reflect our determination to emphasize our position on the CEE soda ash market," says Dawid Jakubowicz.

After stopping the plant in Romania, which produced over 500,000 tonnes of soda per year, CIECH focuses on the maximum use of the potential of the plants in Poland and Germany and supplying

customers in Europe with soda ash. The possible scenario of a further increases in the prices of CO2 certificates (which have tripled since the beginning of 2018), raw materials or capital expenditures for the "green energy transformation" may translate into an increase in soda prices on the European market.

"The entire soda production industry based in Europe operates under the same conditions and everyone is aware of the obligation to meet the ambitious objectives defined by the European Union.

However, higher CO2 certificates and raw material prices, combined with investments related with decarbonization, and a limited supply of soda, especially in Central and Eastern Europe, may be reflected in the prices this resource in Europe," emphasises Dawid Jakubowicz.

In order to reduce the level of CO2 emissions, the CIECH Group is implementing a multi-faceted decarbonisation strategy which assumes, among others, partial transition to gas, modernisation of combined heat and power plants in Poland, as well as the use of photovoltaics as a source of electricity and heat in the Group's plants. In total, in the next five years, CO2 emissions could be reduced by 30 per cent vs year 2019. "Although these initiatives differ in scale and implementation horizon, they have one common denominator - reducing CO2 emissions.

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News Anaylsis

News

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Cosmetic changes for the environment?

T

he perfume sector is indeed suffering but seems less impacted by the crisis than make-up. Recent launches at L’Oréal are recording “fine performances”, and maintaining a “strong momentum” at Dior Parfums (LVMH).

L’Oréal Luxe even claims to have “outperformed its market, particularly in perfumes” during the first half of the year. Meanwhile, Interparfums has preferred to postpone to next year the launch of a new Jimmy Choo women’s line, a launch that will also be accompanied by a new women’s line at Rochas and Lanvin. If the general trend “is to the rescheduling of launches to 2021” observe Stoelzle Masnières Parfumerie and Heinz Glas, “most of the launches planned for the end of 2020 are maintained” at Verescence.

Even if classics are playing their cards right, and even if China is perfuming itself again, and Europe is finding its way back to the shops, the situation is far from back to normal for glassmakers and even worse in Travel Retail, which has still not found its second wind. Stoelzle runs at 50% of its capacity, the same goes for Heinz Glas but “occasionally” explains the Company. On average, the French sites of Verescence are operating at 75% of their normal activity.

At the Mers-les-Bains plant, two out of three furnaces are running. In Spain and the United States, the bottling activity is around 60% and 75% respectively.

In this uneasy economic environment, producers are banking on their agility. For Heinz “it is even a permanent concern”, and the same is true for Stoelzle who also boasts “its level of service”. Verescence is reviewing its operating methods, accelerating its digital transformation and testing new tools. “As an international Group with strong local roots, the crisis has reinforced our strategy,” explains Jean-Luc Leblond, Sales and Marketing Director. “Being more agile means further improving our flows by reducing the complexity of the supply chain.”

Another avenue for growth is to adapt the offer to changes in demand. Like other categories, the perfume sector is also

asianglass AG 20-4

recruiting more on the internet. “Visibility is indeed very limited in this segment, but it is an important area of development for our customers,” confirms Verescence, who is already working on improving the resistance of the glass, with an innovative coating “making it more resistant to shocks” But the attention of glassmakers is mostly focused on circular economy and sustainable development. And this on several levels. Following the Citeo recommendations, they offer designs with a lower impact on the environment and that facilitate the recycling of bottles. A concern that has existed for more than twenty years at Heinz Glas. “With a water-soluble lacquering, we can claim to have been a pioneer in the use of eco-friendly decorative raw materials,” says Rudolf Wurm, Sales Director.

Last year, Verescencedelivered on its commitment to eliminate 100% of solventbased solutions on its finishing lines.

Beyond VOC emissions, the glassmaker who is studying - together with some of his customers - more eco-responsible decorative processes, has developed a tool to take into account the impact of finishing operations on the recyclability of a glass container. Stoelzle has been working for several years on the Quali Glass Coat 2.0, a new powder coating decoration process that reduces the CO2 impact by nearly 77%.

“We have also furthered this technology with the Tigital process (in partnership with the Tiger Company), which allows a photo-quality screen printing with a CO2 reduction of 85% while maintaining the possibility of recycling the glass,” specifies Étienne Gruyez, CEO of Stoelzle Masnières Parfumerie.

More globally, as furnaces remain the main sources of CO2 emissions linked to glass production, manufacturers have announced several investments to reduce their environmental impact. For instance, at the beginning of 2021 Stoelzle will rebuild a furnace which “will use the latest technologies”. Heinz Glashas opted since 2016 for a green hydroelectric source to supply its German sites, like with the new furnace at the Kleintettau site. To date, most of Verescence furnaces are new. “They have, on average, gained

15% energy efficiency compared to the previous generations. Reducing the carbon footprint will inevitably be gradual and part of a long-term strategy, a furnace having a lifespan of around ten years,” explains Jean-Luc Leblond.

As for the circular economy component, all glassmakers have set up plans for the refilling of their bottles. Concerning their bottles and an increase in the cullet rate, all glassmakers have optimization projects in their sleeves. The German glassmaker, who proposes a glass with a PCR rate of between 10 and 20%, has decided to build a next-generation furnace “allowing greater ambitions,” reveals Rudolf Wurm.

After the Infinite Glass launched in 2008, and then the NEO Infinite Glass in 2014 with 25% PCR, Verescence will very soon dedicate its main furnace in Mers-les-Bains to the production of glass with a 10% PCR content. While Stoelzle Masnières has significantly increased its cullet rate while maintaining glass quality, Etienne Gruyez considers “it is more important to look at the overall impact of the bottle”.

Despite their commitment to meet the perfume market’s new requirements, glassmakers will not post a positive balance sheet for 2020. “Our financial results will have deteriorated and we expect a year down by around 20% compared to 2019. To protect our cash flow, we have implemented significant savings plans and postponed some investments, with the will to preserve those linked to priority areas like CSR, quality and continuous improvement,” explains Jean-Luc Leblond. Heinz Glas has taken a series of measures to cut down costs and minimize the economic impact.

“We are paying particular attention to the Company’s cash flow, and to this end, we have engaged very precise management of our stock levels,” notes Rudolf Wurm.

For their part, Stoelzle officials believe it is still too early to have a clear vision of the 2020 balance sheet. “Things are changing constantly and very quickly,” confirms Etienne Gruyez. “We have imagined different scenarios with up to 25 to 30% drops in sales. We will have to be as responsive as possible so as not to lose the few opportunities that will arise”.

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ANALYSIS: Pharma Glass

A vial busi COVID sparks a race in production

AG looks at how the globe’s leading pharma glass makers are rising to the challenge of ensuring there’s enough borosilicate to go around when seven billion people all start clamouring for a vaccine…

A

s scientists race to test coronavirus vaccines in humans, a parallel scramble is underway to produce billions of medicalgrade vials and syringes that will be needed to inoculate the world’s population.

The job of delivering a vaccine to a majority of humans is so vast that global production of pharmaceutical vials needs to be ramped up by 5 to 10 percent within two years, a job the industry says requires immediate preparation and increases in production but is not an insurmountable challenge.

Governments and drug companies around the world are placing huge orders worth hundreds of millions of dollars and pushing the makers of vials and syringes to add manufacturing capacity.

Compared with the rush of laboratory studies and clinical trials needed to produce vaccines that can safely and effectively block the virus, the work of producing vials is prosaic stuff — but just as important.

“Vials and stoppers are only trivial if you have them. If you don’t have them, they cease to be trivial,” said Awi Federgruen, a professor of logistics and supply chain management at Columbia University. “A shortage of any one of those will act as a bottleneck.”

For coronavirus, the industry is settling on 10-milliliter vials, capable of holding eight to 15 doses, as the most common standard. A big part of the reason for multi-dose vials is to conserve glass supply; for many common vaccines, single-dose vials and single-dose, pre-filled syringes have become commonplace, although multi-dose vials are available as well, according to the CDC. Corning, the U.S. glassmaker based in New York, is tapping a $204 million government contract to help accelerate construction of a 2,000-degree furnace in New Jersey that will extrude molten glass into lengths of medical-grade tubing hundreds of feet long. The tubes will be divided into vials and shipped out to be filled with vaccine.

“No one wants to see glass be the reason the world can’t get access,” said Brendan Mosher, vice president and general manager of Corning Pharmaceutical Technologies. “Everyone is working together and has a

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common goal to make sure there are plenty of vials.”

The U.S. government also is seeking to ramp up domestic supply of syringes. BD, a global medical supply company based in New Jersey that is the largest supplier of syringes in the world, announced last week it is upgrading a factory in Nebraska with help from a $42 million contract with the government. BD already has a contract to sell 50 million syringes to the government. The company said the upgrade will allow it to produce hundreds of millions more syringes for “priority access” by the U.S. government “to support current and future pandemic efforts.”

Stevanato Group, a global medical glassmaker based in Italy, and other manufacturers have estimated that worldwide demand will rise by 1 billion to 2 billion new glass vials, each capable of holding multiple vaccine doses, over the next two years. Stevanato has received an order from the global nonprofit Coalition for Epidemic Preparedness Innovations (CEPI) for 100 million vials that can contain enough vaccine for 20 doses each, enough for 2 billion shots. CEPI has said it is working with nine different companies in the hunt for an effective vaccine. It is investing millions of dollars in manufacturing upgrades for some of those companies to help them prepare ahead of time in the event their vaccines are effective.

To get to “herd immunity,” the threshold where the coronavirus is no longer able to easily spread, as many as 5.6 billion of the world’s 8 billion people will need to receive a vaccine. To be effective, a second booster shot a month or so later is likely to be needed for many of the vaccines under development. That means more than 11 billion individual doses may be needed to defeat the virus.

Stronger…better?

It was all smiles at the White House in 2017 when executives from Corning Incorporated visited President Trump’s administration to unveil an innovative new pharmaceutical vial. As part of the White House’s “Made in America” initiative, Corning brought a sample of its Valor Glass container, which was developed with Pfizer and Merck, and had become

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ANALYSIS: Pharma Glass

iness…

NO ONE WANTS TO SEE GLASS AS THE REASON WE CAN’T GET VACCINE ACCESS the first new pharma glass composition approved by the U.S. Food and Drug Administration in over 100 years.

To demonstrate Valor Glass’ durability — one of its prime advantages over traditional borosilicate glass — Corning’s CEO, Wendell Weeks, asked the president to break a conventional vial by pressing down on it with a lever. In one quick pop, the borosilicate vial was shattered.

“I’m pretty strong,” the president quipped with a smile.

“You ain’t seen strong yet, brother,” Weeks responded to a room full of laughter.

When Trump pushed his weight onto the lever pressing down on the Valor Glass, the vial didn’t budge.

At the time, it was touted as another example of ingenuity by an American company. Now, a few years later, glass vials — including Valor Glass — have become a critical linchpin in the White House’s efforts to bring an end to the coronavirus outbreak. And the strength, not just of vials, but of the pharmaceutical glass industry as a whole, will be a determining factor in whether or not America — and the rest of the world — can finally bounce back from the pandemic.

In fact, it wasn’t long after drug developers kicked off their mad dash to create a vaccine earlier this year that the world wised up to the additional concern of having enough vials. For the past few months, headlines have blared that there may be a vial shortage coming and the worries have thrust packaging — part of the pharma industry that’s normally behind the scenes — into the public’s glare.

Meanwhile, the glass packaging market has launched into a fervent sprint of its own to ensure that when a vaccine is approved, pharma companies will have a way to deliver it to patients. Like pharma companies developing a vaccine, the

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U.S. government has also been helping the packaging industry along, pumping millions of dollars into the efforts to quickly ramp up capacity for glass vials.

But as the industry races to produce the needed vials for SARS-CoV-2 vaccines, small- and mid-sized pharma companies looking to package other therapies could be left behind.

While some glass companies are optimistic that they will be able to meet the demand being generated by the coronavirus while keeping up with existing commitments, others admit that the market for glass vials could be in shortage for many months to come.

How can the glass industry keep its supply lines from cracking under the weight of COVID-19?

Glass or no glass?

There’s a kind of confidence your company can emit only when it’s successfully been in business for over a century. In the tight-knit community of glass vial producers, that self-assuredness is well on display.

“Schott is one of the oldest companies in pharma history and is working closely with the top pharma companies globally,” Stefan Marc Schmidt, vice president of global sales and marketing at Schott AG says. “Right from the start of this COVID crisis, we have been in close contact with customers and have been working on scenarios and different ways to be prepared. That’s what we do.”

When asked about whether or not Schott — one of the industry’s leading glass manufacturers— would be able to produce enough vials to meet the surging demand for a coronavirus vaccine, Fabian Stöcker, Schotts’ vice president of strategy and innovation, echoed Schmidt’s sentiment that the company is poised and ready.

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ANALYSIS: Pharma Glass

“We have been surprised that this is an issue in the press,” Stöcker says.

The combined experience of the top titans in glass manufacturing should make the industry well suited to the task of meeting the unprecedented packaging demands for a SARS-CoV-2 vaccine.

Three companies — Schott, Corning and Nipro Pharma Corporation — control the lion’s share of the market for pharmaceutical glass tubing, which is the primary component used to make containers such as vials and syringes.

The top two glass tubing manufacturers have been in business for over 100 years each, and difficult barriers to entry, such as the high complexity and cost of manufacturing type 1 borosilicate glass (the most common type of glass on the pharma packaging market), have kept the tubing industry small. Underneath the glass behemoths, there is also a bustling market of converters — companies who turn glass tubing into vials or syringes.

“There are hundreds of converters who turn tubing into vials,” explains Brendan Mosher, vice president and general manager at Corning. “So you have a very consolidated tubing market and then a very fractured converting industry.”

Despite the combined experience of glass manufacturers, with so few of them, it also stands to reason that there could be concerns about the industry being nimble enough to handle a sudden surge in demand.

Stevanato Group, an Italian manufacturer of vials, estimates that global demand for vials will rise by 1-2 billion over the next two years. Even before the coronavirus pandemic, the industry faced worries that there could be a type 1 borosilicate glass vial shortage. Part of the problem is that glass manufacturing facilities are expensive to build. Then, there can be challenges with obtaining the needed key raw material — a particular kind of angular sand found in riverbeds and beaches that’s in high demand around the world for a number of products.

Earlier this year, John Bell, a professor at University of Oxford (where one of the leading SARS-CoV-2 vaccine candidates is being developed) sounded the alarm over a potential glass shortage, claiming that there are just 200 million vials left in the world.

But Stöcker waves those concerns away. Based on Schott’s internal auditing of the market, Stöcker says that the current capacity for glass containers for injectable drugs is 50 billion, including cartridges, syringes and other containers. Of that 50 billion, Stöcker says that the current global supply for vials alone is 16-18 billion.

The market was also already on the upswing. Due to rising demand for vials from developing countries, Schmidt says that the glass container market has been expanding 3-5 percent each year, and Schott had already planned a $1 billion investment in building out its existing capacity for both glass tubing production and converting.

“For the last few years…there have been drug shortages in the U.S.,” Stöcker says. “But that has nothing to do with packaging.”

Mosher, however, describes the market for glass tubing as “extremely tight.”

“Corning is the second biggest borosilicate tubing producer behind Schott,” Mosher says. “We make enough tubing for approximately six billion vials a year. But we have been in a sold-out condition for the past 18 months.”

Assurance from the top…

Pharmaceutical packaging companies Gerresheimer, Stevanato Group and Schott have reaffirmed their commitment to supplying containers for any Covid-19 vaccine and treatment that is developed.

The CEOs of the companies wanted to make the statement to provide confidence to the global pharmaceutical supply chain in times of uncertainty. Each of the three companies manufactures type-1 borosilicate glass vials, used to store and deliver vaccines around the world.

“We stand ready to support the pharmaceutical companies in the fight against the pandemic,” said Dr Frank Heinricht, chairman of Schott’s management board. “We will do our utmost to provide the required containers in the best quality. The fact that 50 billion borosilicate glass containers are already deployed each year for a wide variety of vaccines and treatments, and that we have made significant investments to expand capacity makes us optimistic this can be achieved.”

“Since the outbreak of the coronavirus pandemic, we implemented all safety measures to protect our employees and deployed all available assets to secure our supplies to pharma companies,” said Franco Stevanato, CEO of the Stevanato Group. “To support the mass vaccination campaign and the ramp-up industrialization needs, we invested in increasing the manufacturing capacity of vials from borosilicate glass. Conscious of the role we play, we are committed to ensuring all patients around the world have access to the vaccines and treatments.”

“Facing the very challenging situation of a global pandemic, we will do everything to support any upcoming Covid-19 vaccine campaigns in close cooperation with our customers. In 2019 and 2020 we are investing more than ever to deliver the highest quality products with additional capacity. We are fully prepared to support the global market demand for potential Covid-19 vaccines with our vials and syringes being produced in our large production facilities in the US, Mexico, Europe and Asia“, added Dietmar Siemssen, CEO Gerresheimer AG.

The hunt for glass

Lawrence Ganti, chief business officer at SiO2, a company that has innovated an alternative vial to borosilicate glass, agrees that some pharma companies are having a hard time securing glass packaging from the leading suppliers.

“We have been told by many customers that when they call asking for glass, they are turned away, or asked to pay ridiculous upfronts to obtain it,” he says.

Given the challenging market conditions and the fact that glass manufacturers want to make sure they have enough supplies ready to fill orders for a coronavirus vaccine once one is approved, Ganti says that the top players in “Big Glass” are prioritizing who they can make commitments to — and it’s often only Big Pharma companies.

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Currently, Schott says it is not turning down orders or requests from customers.

“We openly discuss the business case, negotiate and make a competitive offer to our customers,” Schmidt says.

But Mosher admits that Corning is sometimes “turning away customers because we have already committed capacity.”

“Big Pharma companies that already have contracts in place should be fine,” Mosher says. “I think for small- to mid-sized companies, it is going to be much more difficult [to secure vials] if they don’t have existing supply agreements.”

How can the glass industry juggle the sudden need for more vials and keep smaller pharma companies stocked up?

Borosilicate alternatives

When SiO2 launched, the goal was to develop a new pharma container that was as stable and safer than glass but as durable as plastic to reduce breakage during manufacturing. After about 10 years and $500 million in R&D, the company released a plastic vial containing a microscopic inner glass lining that’s 50 times thinner than a human hair.

“What we’ve managed is to advance a new material which takes all the durability of plastic and marries that to all of the stability properties of glass so that you have none of the negatives of either but the positives of both,” Ganti says.

Interest in the SiO2 vials has trickled in from pharma companies since the product was commercially released about a year ago — but many customers were reluctant to to take the leap.

“People said it was cool tech but they didn’t want to change because they didn’t want to be the first,” Ganti says.

Now, since a number of Big Pharma companies have converted to the SiO2 platform and there’s more focus on supplying vials for a coronavirus vaccine, Ganti says that the number of companies looking for an alternative vial has shot up.

“About 60 to 70 percent [of pharma companies] are coming to us now because of concerns with glass,” Ganti says. “Before, the time between meetings with companies was months — now it’s days.”

Before 2019, Ganti says that there were seven drug products being

Bormioli expands reach

Recent investments will allow Bormioli Pharma to better support pharmaceutical industry demand, especially during such unprecedented, challenging times.

The global Covid-19 pandemic emergency has not weakened Bormioli Pharma’s determination to keep on investing and supporting its customers. After the acquisition of the German company Remy & Geiser in October 2019, the company is now announcing the completion of the refurbishment of its glass furnace in San Vito al Tagliamento, where cutting-edge technological solutions and Industry 4.0 concepts have been implemented in order to increase production efficiency, reduce the carbon footprint and improve quality control standards and product finishing.

This molded glass furnace refurbishment completes the revamping project of the entire plant initiated in 2019. The new equipment allows an increase in the glass melting power, thus improving the quality of the final product. Thanks to a proprietary this furnace ensures an excellent glass distribution, as well as the production of both transparent and amber type I glass bottles, responding in a more effective way to the increased demand for glass vials used for complex drug formulations such as vaccines and several life-saving medicines. The flexibility on the control of the energy consumption and the real-time monitoring emissions will also

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tested in clinical trials with SiO2 containers — now there are 41. Given the sudden interest in securing vials, SiO2 has also doubled its sales forecast for this year, from a 200 percent increase over 2019 to a 400-500 percent jump.

Ganti admits that the SiO2 vials are still a bit more expensive (about 5-10 percent more) than traditional borosilicate containers, but stresses the many benefits, such as eliminating breakage, faster time to market and increased patient safety. And because the glass material is made by chemically applying the inner layer — made from SiO2 and vapor — by using plasma energy, there are no raw materials concerns.

Mosher says that Corning is also steering customers in the direction of Valor Glass if the company is unable to fulfill a request for borosilicate containers.

When developing Valor Glass, Corning’s goal was to eliminate delamination from vials, which contributes to glass flaking and subsequent recalls. After conducting a root-cause analysis, Corning discovered that boron — a mineral in borosilicate glass — can become unstable at high temperatures and contribute to delamination. Eventually Corning innovated a new composition that eliminates boron but keeps the glass’ other needed elements: silica and alumina.

The aluminosilicate formulation in Valor Glass not only addresses delamination, it is also more mechanically resistant to temperature swings and is less prone to breaks and damage, which improves efficiency and speed on the filling line.

Mosher says Corning is working with customers every day on adopting Valor Glass for new drugs, but because of the investment associated with revalidating manufacturing lines for new containers, it’s a tougher sell for existing drugs.

“It’s a no-brainer for new drugs,” Mosher says. “But there are time and conversion costs for existing drugs. For that reason, we are working closely with global regulatory authorities to streamline the adoption process for innovative technologies like Valor Glass.”

Even with alternative packaging options on the market, the pharma glass industry is going to have to ramp up capacity for all vials if it’s going avoid being pummeled by rising demand. reduce the environmental impact of the plant anticipating the new EU sustainability protection policies.

These investments take place few weeks after the acquisition of GCL Pharma - a company based in Central Italy specialized in the production of plastic, rubber stoppers and aluminum closures for pharmaceutical applications. As a result of this investments, Bormioli Pharma is strengthening its ability to support the pharmaceutical industry by offering premium one-stop-shop solutions for parenteral applications.

“Thanks to these new investments, we have consistently increased our industrial capacity on glass pharma packaging production, whilst strengthening our capability to provide a complete packaging solution for injectable drugs” commented Andrea Lodetti, CEO at Bormioli Pharma. “ We are proud to be able to support more and better our partners in the pharma industry, helping to bring essential drugs and therapies where they’re needed the most, especially during these challenging times.”

Bormioli Pharma, one of the world leaders in the production of pharmaceutical packaging in glass and plastic, is based in Parma, Italy has been acquired by international investment firm Triton in November 2017, and since then supporting the company’s growth strategy sharing the commitment for business excellence, environmental sustainability and social responsibility.

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ANALYSIS: Pharma Glass

A capacity cure?

Just as the Biomedical Advanced Research and Development Authority (BARDA) has been injecting the pharma industry will hundreds of millions of dollars to support the development of a vaccine, government agencies have also been throwing money at the vial problem.

In June, BARDA announced two major investments to expand vial manufacturing — one is a $143 million contract with SiO2 to scale its permonth capacity to 10 million containers (which can hold up to 10 doses of a vaccine each) by November. Ganti says the contract will add 200 employees to its manufacturing site in Alabama. In addition to supplying Moderna with vials for its vaccine candidate, the company is also working with six other coronavirus vaccine developers, who are testing their products in SiO2 containers.

Corning also secured a $204 million grant from BARDA to increase capacity for its Valor Glass products at facilities in New York, New Jersey and North Carolina. Because Corning has agreed to grant priority access to drugmakers designated by BARDA who are developing a vaccine, Mosher says the company could sell out its capacity of Valor Glass to BARDA through 2021.

The Coalition for Epidemic Preparedness Innovations (CEPI) has also invested in securing a supply of vials across the Atlantic. In June, CEPI announced a supply agreement with Stevanato to procure 100 million containers that will be able to hold up to 2 billion doses of a vaccine.

Andrea Zambon, marketing and product management director at Stevanato says that the company has already secured an ample supply of glass containers and is fast-tracking access to four of its converting lines in Italy and Mexico.

“This preferred access [for CEPI] will remain in place through the end of 2021, by which time we will mostly like have a vaccine approved and distributed worldwide,” Zambon says. When asked if the CEPI deal could impact Stevanato’s ability to keep up with other commitments, Zambon says “not at all.”

“We’ve proactively increased our capacity worldwide, and are committed to maintaining exemplary service to our standing customer base as well as the approximately 30 additional programs in which we’re involved pertaining to COVID-19,” Zambon explains.

The widespread ramp-up mode of pharma is also trickling down to purchases for packaging equipment, according to the Association for Packaging and Process Technologies (PMMI).

“As researchers and scientists actively pursue development of a safe and effective vaccine for the coronavirus, PMMI’s June 2020 Purchasing Index indicates that investments in packaging machinery for the pharmaceutical and medical device sector are vastly exceeding figures for other sectors

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asianglass AG 20-4

such as food, beverage and personal care,” says Jorge Izquierdo, vice president, Market Development, PMMI. Despite the capacity increases, many companies are preparing for a rocky market in the short term.

David Enloe, president and CEO, Aji BioPharma Services, a global integrated drug product contract manufacturer, says his company is now experiencing extended lead times on glass vials that are up to 12 months in some cases — and the situation is likely to get worse before it gets better.

“There is a concern that once effective vaccines become available, lead times may increase even further, despite commitments from glass manufacturers to increase tubing and converting capacity. This will be an added strain on CDMOs and their ability to meet clients’ timelines for nonCOVID-19 products,” Enloe says.

To help mitigate the risks, Enloe says Aji BioPharma Services is working with its partners to select vials and stoppers that may be less impacted by the push for a coronavirus vaccine vial.

“For vaccines it appears that a 10mL vial and 20mm serum stopper are most popular, which would provide more than ten doses per vial. There is also interest in 20mL vials with a greater number of doses, which may help cut the vial demand by half,” he says, adding: “It’s important to remember that CDMOs, drug innovators and glass suppliers need to communicate and collaborate now more than ever to address these supply chain challenges in order to successfully address the upcoming COVID-19 vaccine demand as well as continue to support all of the other patient needs.”

How long before the market levels out? The predictions vary.

“In late 2019, it had been predicted that the supply of glass tubing would stabilize by the end of 2020,” says Kazunori Ashida, president of Namicos Corporation, a Japanese manufacturer of ampoule vials. “However, now due to the sudden increase in demand for vials in anticipation of a COVID-19 vaccine rollout, we expect the shortage to continue. For this reason, even though ampoule and vial makers are putting forth strong efforts to ramp up their production capacity, we anticipate that it will take several years to stabilize.”

Mosher says that given the fact that all of the major suppliers have announced capacity expansions, the situation could start to resolve itself “in the next 12 to 18 months.” Mosher adds that the increase in capacity could even eventually lead to an excess in the supply of vials.

One thing glass manufacturers all agree on is that — just like drugmakers — the industry is banding together to make sure there will be enough supply to effectively distribute a coronavirus vaccine around the world.

“The industry is putting aside the competitive spirit,” Mosher says. “It feels like more than ever, that everyone is in this fight together.”

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ANALYSIS: Automotive

Drivers for change… automotive glass in the Middle East Yogender Malik looks at how the stop/start nature of the effects of Covid has created a new momentum in the autoglass industries of the GCC…

T

he Middle East Asia region is one of the highest per capita automotive glass users globally. High per capita income of the vast section of population, lack of public transport in some regions and one of the most affordable prices of diesel and petrol has led to surge in use of automobiles in the region, which has translated into huge gains for automotive glass producers and suppliers.

For example, according to the Roads and Transport Authority in Dubai, the city has one of the highest vehicle densities in the world, with one car for every two residents. Although public transport in Dubai has become easily accessible and figures show an increase in their ridership, the numbers of cars in the city is increasing. Official figures show that there are 540 cars per 1,000 Dubai residents, a stark difference from cities like New York with 305 vehicles, London with 213, Singapore with 101, and Hong Kong with 63 vehicles per 1,000 residents.

However, despite the strong sales of automobiles in the region, automotive glass production in the region has suffered as most of the automobiles are imported into the region.

GCC automotive glass is expected to receive a huge boost in coming years due to efforts of various governments of the region, who are seeking to develop domestic automotive industries. GCC countries have encouraged global vehicle manufacturers to establish local operations, in an effort to create jobs for the region’s growing youth population and facilitate the transfer of technology and skills.

For example, Saudi Arabia is currently developing a car manufacturing city and working to incentivize investors to inject money into the industry. The Kingdom will also provide the required raw materials including automotive glass, aluminum, rubber, plastics and others at competitive prices. The Auto Cluster aims to attract Saudi and foreign investment, increase exports, provide job opportunities, and contribute to economic diversification as part of its 2030 Vision reform plan. Moreover, the addition of 3 million women drivers in Saudi Arabia has opened a host of incremental opportunities for automotive producers and indirectly for automotive glass consumption. The

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Huge potential for automotive glass industry

Despite the current small size of the Middle Eastern automotive glass industry, the region holds huge potential for automotive glass production and consumption in the coming years on account of a number of factors.

With vehicle sales on the rise and multiple free trade zones under development, the Middle East is attracting greater attention from the automotive industry than ever before. In 2019 the Middle East’s automotive count exceeded 22.4 m vehicles, with new passenger car sales amounting to more than 1m units and commercial vehicle sales hitting 270,000. Moreover, further growth is expected with around 27m vehicles forecast to be on the region’s roads by 2023, including 18m cars and 9m commercial vehicles.

The region boasts access to over 400 million consumers in the Middle East and North Africa (MENA), a vast region where annual car sales are currently only around 2.3 million. Another benefit for region’s automotive glass producers is the vast area is the Greater Arab Free Trade Agreement (known as Gafta) which permits duty-free access to 17 countries in MENA if local value added is 40% or above. In addition to the 400 million consumers, region’s automotive glass producer can serve an even bigger area, taking advantage of its location between Europe, Africa and Asia and its access to 2 billion consumers within a three-hour flight time.

Low energy costs, comparatively cheap labour and ample availability of automotive grade float glass in the region makes the Middle East region as one of the lowest cost automotive glass producing regions. In addition to meeting the regional demand, the Middle East can become an export hub for automotive glass to European countries, where production cost is almost 35- 40 % higher than the Middle East region.

With the benchmark international oil price rebounding to an average $66 in 2019, overall automotive sector investments in the Middle East region are expected to rise, leading to an increase in demand for cars, trucks as well as buses used for the transport of labour. Factors such as reduced disposable income on account of the 2015-2017 decline in oil prices, plus the global economic slowdown, contributed to a double-digit, year-on-year decline in

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ANALYSIS: Automotive

vehicle sales volumes in the region during the 2016-2018 period.

With an anticipated increase in global oil prices in the future, it is expected that vehicle sales in the region will grow at a CAGR of 3.6% until 2023.

UAE bouncing back?

Car sales in the UAE plummeted and screeched to a halt in April due to a lockdown and restrictions on the movement of residents due to coronavirus.

However, there are positive signs of normalcy in the local auto market after the reopening of commercial outlets in the post-sterilisation programme, but the 2019 growth level is set to be achieved in late-2021.

In addition, pre-owned vehicles are also giving increased competition to new cars as residents become more price-sensitive due to ongoing the economic situation.

Dr Julia E. Saini, associate partner for mobility at Frost & Sullivan, said vehicle brands have seen a drop in sales of new and pre-owned cars between 50 to 80 per cent in March 2020 and zero sales in April owing to the lockdown.

“Overall, we expect 10 to 15 per cent of consumers will defer vehicle purchase by six to 12 months. Among the consumers who continue to pursue vehicle purchase, we expect the average spend to drop by 10 to 15 per cent due to the job loss as well as negative sentiment and uncertainty.

Overall, we expect a drop in sales of 24 per cent in 2020,” said Dr Saini.

Axel Dreyer, CEO of the automotive division at Galadari Brothers, the distributor of Mazda vehicles in the UAE, says there is an increase in demand over the last one week after the lockdown, which is very positive.

“Although the current economic impact is heavy, the people in the UAE have faith in government leadership to steer the UAE economy towards stable waters. Due to fear of infection, people are avoiding public transport and considering car sharing or cheaper used car option to serve their transportation requirements. This will also give a stimulus to the automotive industry. Many residents might also not travel this summer season so instead, they might look for a new or used car,” he said.

Starting from late March, Dubai and other emirates remained under strict lockdown during most of April as part of the 24-hour sterilisation programme. UAE residents were allowed to step out only to buy essentials - such as food and medicines or visit hospitals. In addition, commercial outlets remained closed during the sterilisation period, which lasted most of the last month. As a result of decline in sales, dealers are trying to stimulate demand with offers on insurance, registration and maintenance contract, fuel, cash back offers and down payment support, which typically translated to Dh3,000 worth of savings.

Driving in 2021 While replying to a comment on recovery, Dreyer said: “That depends on the interpretation of recovery. If recovery means back to 2019 level, I’m not expecting that this will happen before the fourth quarter of 2021. But there are so many variables that are uncertain for the moment. It is difficult to provide a prediction but for sure the coming 12 months will be tough for the automotive market.”

Dr Saini expects the market will have a relatively short-term impact on

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new vehicles sales and moderate growth is expected already in 2021. “We expect to a see a growth of 4 per cent in 2021.” She expects that the used car market to be less impacted by the Covid-19 slowdown than new car sales in 2020 as customers will remain price-sensitive. “We expect the used car sales to drop by 14 per cent in 2020. Around eight out of 10 consumers who are considering a car purchase are eyeing used cars. Accelerating growth in online platforms and increased transparency of used car dealers’ offers [valuation and vehicle history] are driving customers’ shift to organised used car market in the UAE,” she added.

Huge automotive imports in the region

On per capita basis, the Middle East region is one of the highest consumers of cars and commercial vehicles. However, a major proportion of the cars and commercial vehicles is imported into the region , thus depriving the region’s flat and processed glass producers from the lucrative automotive glass opportunities.

For example in Qatar, currently there are 17 glass processors, all of which operate in the architectural glass processing segment. These companies have developed substantial capabilities and currently offer a range of innovative products to the construction sector in Qatar. The cumulative gross value added (total production less the cost of raw materials) by these companies was QAR 94 million (up from QAR 11 million in 2009) in 2019.

However, there is no single automotive glass processor in the country. All the automotive glass requirements are met through imports from other countries of the region and Europe.

Much like Qatar, other GCC countries - Bahrain, Oman and Kuwait too lack automotive glass processing.

Most of the demand is met through distributors of automotive glass based in these countries.

Auto glass makers The GCC has a total of five float glass producers. Saudi Arabia basedGuardian Glass ( Zoujaj Glass), Obeikan Glass and Arabian Float Glassand United Arab Emirates based RAK Guardian Glass and Emirates Glass are capable of producing automotive grade float glass for the regional automotive glass processors.

Emirates Float Glass, one of the two float glass producers in United Arab Emirates is a major producer of automotive grade float glass in the UAR. The company commissioned a new facility in 2014 aiming to enhance its production capabilities to cater to the automotive glass sector. The offline facility, encompassing investments of over AED 10 million, is equipped with the most modern machinery from Europe, with completely automated programming and production line, with limited human intervention, in order to ensure consistent quality parameters vital for the automotive glass industry.

According to Ghassan Mashal, General Manager of EFG, “The investment of over AED 10 million offline facility is in line with the company’s ambitious growth plans to enhance our already-existing automotive industry customer base. The production line is capable of supplying windshields and side lights to any shape and size required by automotive industry.”

AG 20-4 asianglass

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ANALYSIS: Automotive

Emirates Float Glass, established in 2009, is an integrated float glass facility in the UAE, located on a 320,000 square meters plot at the Abu Dhabi Industrial City. The company supplies regional and international glass processors with premium quality float glass products used in the architectural and automotive industry segments. The products are exported to more than 61 countries spanning South America, Europe, Australia, Far East Asia and Africa, in addition to the GCC states.

Saudi Arabia based Arabian United Float Glass entered into automotive market segment in the year 2011 with ARALUX automotive light green tinted glass.

COVID impacts

The world is currently in the midst of one of the biggest periods of uncertainty the modern world has ever witnessed. Other crises of the past century have often had some basis in history in which to model and predict follow-on effects, but the current situation has presented the world with an entirely new challenge.

The magnitude of this challenge for the automotive (and resultantly automotive glass) industry in particular is still being assessed with levels of disruption not seen since perhaps the great wars of the 20th century.

Ongoing Covid 19 pandemic has started to show its impact on the already struggling Middle Eastern automotive glass industry. With regional auto sales declining as a result of the nationwide shutdown due to the coronavirus disease 2019 (COVID-19) outbreak, the automotive glass industry is set to be substantially impacted on levels unseen since the 2008 recession. Nationwide retail closures have already led to an unprecedented drop in sales volume while future production has come to a near standstill.

Industry overview

Hugely dependent on imports, the Middle East automotive industry has been undergoing through one of the worst periods in recent history. Economic slowdown and sharp drop in crude oil prices has had a very deep negative impact on regional automotive consumption in last few years.

Saudi Arabia Kingdom of Saudi Arabia is the largest automotive glass market in the Middle East region. The country is the largest car market in the Gulf Cooperation Council (GCC) which includes Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates.

Demand for cars in Saudi Arabia has fallen by some 50% over three years to about 450,000 cars in 2018, as a drop in oil prices and departure of expatriates hit consumption. Though, in 2019, automobile market in Saudi Arabia grew 29% compared to 2018 volume. Volume in 2019 came out strong ~533,000 units. Toyota is the sales leader with around 29% of the total sales followed by Hyundai-Kia around 27%, General Motors, and Nissan-Renault.

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SAUDI ARABIA IS CURRENTLY DEVELOPING A CAR MANUFACTURING CITY Lumiglass

Location: Al Quoz Industrial Area, Dubai, United Arab Emirates Markets: Domestic and export Other: A subsidiary of Dubai Investments, Lumiglass Industries is the leading processor of safety and security laminated glass in the region, with wide automotive and architectural applications throughout the defence, security and construction sectors.

Lumiglass is also the leader in production of bullet-resistant glass. It was first company in the region to gain ECE 43R certification, the European standard for automobile glass safety and equivalent US Department of Transportation number DOT 806 for its automotive glass.

National Finland Safety Glass Company

Location: Umm Al Quwain Industrial Area, United Arab Emirates Markets: Domestic and export Other: Established in 2002, National Finland Safety Glass Company; NFC is among the leading automotive glass suppliers in UAE. Based at industrial area of Umm Al Quwain, the company supplies automotive glass to major automobile majors in the region.

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ANALYSIS: Automotive

There are four commercial truck manufacturers producing commercial Vehicles in Saudi Arabia. In the Eastern Region, Isuzu Motors started operations in late 2012 and has been successfully manufacturing trucks. Three other major global OEMs producing Heavy Duty Commercial Vehicles are operating in the Western Region. They are Mercedes, Volvo and MAN. Arabian Vehicles & Trucks Industry (AVI), a joint venture between Zahid Tractor & Heavy Machinery Company and Volvo Truck Corporation, which is located in the industrial valley of King Abdullah Economic City. Designed by a joint Volvo-Renault project team – and one of the first production hubs in the world to produce both Volvo and Renault trucks on the same line – the joint venture manufactured its first Volvo truck in June 2015.

Saudi government has embarked on an array of industrial, social and entertainment projects under its ‘Vision 2030’ initiative to diversify the economy away from its decades-long reliance on the petrochemical industry. Social policy will certainly have an impact on the automotive industry, including the removal of the longstanding ban on female drivers in June 2018, which has now liberated half the population to drive.

Saudi Arabian government has been trying hard to develop automotive industry in the country, which could bring huge opportunities for automotive glass industry in the country. Saudi Arabia began courting Toyota two years ago to build a large car plant as part of Crown Prince Mohammed bin Salman’s grand plan to wean the kingdom off oil revenues and create jobs for young Saudis. But the Japanese carmaker has been delaying Riyadh’s overtures following talks that dragged on without tangible results because high labor costs, a small domestic market and a lack of local supplies gave Toyota pause for thought.

Securing a deal with a major automaker by 2020 for a car plant is a key target in the Gulf state’s national industrial strategy, part of a broader agenda to diversify the economy of the world’s largest oil exporter.

As part of measures designed to create 1.6 million manufacturing and logistics jobs by 2030, Prince Mohammed wants to localize half the production of imported vehicles and weapons - which are expected to account for up to $100 billion in spending by Saudi government entities and consumers by 2030.

For cars, the National Industrial Development and Logistics Program (NIDLP) wants half the roughly 400,000 vehicles bought each year in Saudi Arabia to be made there by 2030.

In addition to the growing and strong local market demands of Saudi and GCC, Saudi Arabia offers access to over 400 million consumers in Middle EastNorth Africa. MENA has total annual car sales of around 2.3 million, mostly imported from outside the region. Greater Arab Free Trade Agreement (GAFTA) gives duty free access to 17 countries in Middle East and Africa if local value add is 40% or greater.

For auto parts makers (such as glass) KSA could serve an even wider area due to its central location between Europe, Africa and Asia covering more than 2 billion consumers are within three hours by air. Saudi Arabia’s population is above 33.4mn (2019)- - is increasing by 2.3% a year. The number of households is rising by 3.7% a year. KSA’s consumers are relatively affluent, having an GDP per capita of $21,057 (2017).

United Arab Emirates

United Arab Emirates (UAE) is the second largest automotive glass market in the GCC after Saudi Arabia. However, like most of the other countries in the region, UAE relies heavily on imports with virtually the entire supply of cars and light vehicles being imported. The market is broadly divided between 80% for passenger cars and 20% for commercial vehicles (trucks, vans and buses).

Japanese manufacturers dominate the UAE automotive market with a significant market share, with Toyota maintaining its dominance in the market.

Apart from a few units assembling truck and bus components and some armored vehicle factories, there is no significant automotive manufacturing activity taking place in the UAE. UAE’s automotive market has struggled in the first six months of the year by the fall of oil sector revenues and by the widespread of covid 19 within the

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RAK Guardian Glass

Location: Ras Al Khaimah, United Arab Emirates Markets: Domestic and export.

Other: A JV between RAK Investment Authority and Guardian Glass, RAK Guardian Glass has been producing float glass since 2007. RAK Guardian was the first float glass manufacturing Plant in UAE and the second one in the GCC at the time of commencement of its operations. Located at Jazirah Al Hamra, Ras Al Khaemah, United Arab Emirates. Guardian RAK produces float glass for automotive and agricultural segments with an installed capacity of 700 tonnes per day.

Zoujaj Guardian

Location: Al Jubail Industrial City Markets: Domestic and export Other: Gulf Guard, as the company is popularly known was the first float glass manufacturing plant in GCC. The company commenced commercial production of float glass in 1996 with an installed capacity of 450 tonnes per day. Gulf Guard is located at Al-Jubail Industrial city’s secondary province in the kingdom of Saudi Arabia.

Gulf Guard is primarily engaged in the manufacture of float glass for construction and automotive applications.

Obeikan Glass

Location: Yanbu Markets: Domestic and export Other: Obeikan Float Glass Co., a subsidiary of the Obeikan Investment Group has been producing float glass since 2011 in Kingdom of Saudi Arabia. With an installed capacity of 800 tonnes per day, Obeikan Glass is largest float glass producer in the GCC region. Obeikan is capable to produce clear & tinted float glass, to international quality standards, in a range of thickness from 3mm to 19mm. Obeikan Glass Co. produces an extensive range of sizes to accommodate the international demands for standard panel size as well as providing service to supply customer specific request.

Major automotive glass producers in the GCC Company

Location

Country

Obeikan Glass Company

Yanbu

Saudi Arabia

Guardian Glass ( Zoujaj)

Al Jubail Industrial city

Saudi Arabia

Arabian United Float Glass

Yanbu

Saudi Arabia

RAK Guardian Float Glass

Ras Al Khaimah ( RAK)

United Arab Emirates

Emirates Float Glass

Abu Dhabi

United Arab Emirates

Al Aman Auto Glass

Jeddah

Saudi Arabia

Al Salahmah Auto Glass

Sharjah

UAE

Jabel Ali Free Zone

UAE

Umm Al Quwain

UAE

Saudi Lamino Glass

Riyadh

Saudi Arabia

Techno Glass

Jeddah

Saudi Arabia

BBG Safety Glass National Finland safety Glass Company

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ANALYSIS: Automotive

Table 1 Saudi Arabia UAE Oman Kuwait Qatar Bahrain

49.70% 18.90% 13.40% 9.70% 5.60% 2.70%

Total market share of automotive market in GCC Saudi Arabia

UAE

Oman

Kuwait

Qatar

Bahrain

country. New vehicles sales have dipped to 84.491, the lowest level in the last 15 years, down 30.6%. The UAE saw a record year of automobile sales in 2015 with around 420,000 cars and commercial vehicles sold. Since then sales have been falling consistently, to a low of 240,000 in 2018 with largely flat growth in 2019.

Lumiglass Industries

A subsidiary of Dubai Investments, Lumiglass Industries is one of the largest automotive glass factory in the GCC. It has a dedicated laminating facilities specially designed for vehicle windscreens, including specialized equipment that caters to extra large windscreens for trucks and buses. Lumiglass is also fully equipped to design and develop production tooling for the manufacture of windscreens as original equipment or as replacement glass for any type of road transport system anywhere in the world.

It also holds the distinction of being the largest producer of bullet-resistant glass in the GCC. Lumiglass is the first company in Dubai to attain the 2017 ASI 2018e (Accreditation Services International) and ANSI (American National Standards Institute) accreditations, as well as the first company to attain the ECE R-432019f and 2020f DOT 80 certifications for automotive glass safety.

2021f Lumiglass sources automotive grade float glass from one of its sister 2022f 2023f companies, Emirates Float Glass, which is one of the two float glass producers in United Arab Emirates. Company’s parent company, Glass LLC comprises of five different glass companies namely Emirates Glass, EG, Lumi Glass, LG, Saudi American Glass, SAG, Emirates Insolaire and Emirates Float Glass, EFG. According to Abdulaziz Bin Yagub Al Serkal, CEO, Industrial Platform, Dubai Investments, “Combining extensive experience with an ambitious vision, Glass LLC has adopted sustainable growth strategies and aims to accelerate the overall demand for various glass products in the UAE and extended region.”

Table 1 537,226 419,665 433,895 449,332 465,097 483,244 497,016

Saudi Arabian auto market (units) Vehicle sales

1

Saudi Lamino Glass Company

Established in 1987 in technical collaboration with leading European technology suppliers for automotive glass production, Saudi Lamino Glass is among the leading automotive glass suppliers in Saudi Arabia and other GCC countries.

The company has recently completed the third phase of expansion which has increased the production capacity up to 500,000 units of windshields and 300,000 units of tempered backlites and sidelites.

According to Sayeed Sohail, General Manager with Saudi Lamino Company, “We have heavily invested in most advanced production technology from European technology suppliers. This has enabled us to produce global standard automotive glass products at our production plant. We are proud of being one of the leading suppliers of automotive glass in the region. Besides Saudi Arabia, we have been able to gain market share in other GCC and neighboring countries. In addition to our success in the automotive glass, Saudi Lamino the main supplier for laminated flat glass (with PVB), laminated curved glass, bullet resistant glass, tempered glass, stained glass and other types of glasses.”

Table 1 2017 2018e 2019f 2020f 2021f 2022f 2023f

-22.1 -21.9 3.4 3.6 3.5 3.9 2.8

Saudi Arabian auto sales growth ( % change)

National Finland Safety Glass Company

Established in 2002, National Finland Safety Glass Company; NFC is among the leading automotive glass suppliers in UAE. Based at industrial area of Umm Al Quwain, the company supplies automotive glass to major automobile majors in the region.

According to Abdul Khaleq Abood, General Manager of National Finland Safety Glass Company, “ We have a market experience of more than 18 yaers in automotive glass market. State of the art production equipment from Tam Glass Finland, Bavelloni , Bottero and from other leading technology suppliers has enabled us to produce high quality automotive glass for regional automotive producers. We import automotive grade float glass from Asahi, Guardian and other quality suppliers. PVB for lamination is supplied by Japanese company Sekisui and USA’s Dupont.”

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asianglass AG 20-4

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TOP HANDLING SOLUTIONS SINCE 1962

ANALYSIS: Automotive

Replacement Market

Globally, demand from the automotive and transport sectors accounts for 13% to 16% of the float glass market across different continents. Of this, nearly 95% of the glass goes to the automotive industry, including buses and coaches, trucks, and off-road mobile machinery and the rest is for the other transport sectors: trains, metros, trams, ships, boats and all types of aircraft. However, in the Middle East region automotive sector accounts for a meager 4 % of the

View from the road: Nissan Middl East

The current COVID-19 pandemic has brought forth unprecedented times for the automotive industry both globally and regionally. Car brands have had to quickly learn how to address global disruptions in supply chains, and during extended periods of lockdowns and restrictions. However, this pause in activity gives automotive brands the opportunity to reflect on the way we communicate and engage with existing and prospective consumers, partners and dealerships – and how this needs to evolve as we step into a post-COVID-19 world. With a surge in online consumption habits and engagement, there is a growing consumer expectation for brands to be socially responsible while remaining relevant. We need to strike the right balance between driving the right level and type of engagement, and nurturing brand loyalty. This directly translates into dialing down product and sales-led communications and ensuring all approaches are responsible, transparent and consumer-centric. We identified three groups that needed swift and effective communication as the pandemic hit – customers, employees and partners – each requiring a different approach. For customers, we highlighted precautionary measures put in place and alternate channels for vehicle support; for employees, we facilitated a remote-working process to prioritize their health and well-being; and engaged in discussions with our partners to address their immediate concerns and plan for the future. Many car manufacturers, including Nissan, have also pivoted logistics and production experts to ‘crisis engineering’, stepping up to manufacture and deliver specialist medical equipment to hospitals around the world. We have seen the production of Q-Vent respirators in our Barcelona plant, sorting and packing of protective face visors for the NHS in our Sunderland plant in London, and face shields being manufactured in Japan. We need to keep in mind that priorities can shift overnight and as such, keeping the finger on the pulse is key. Whilst Nissan Middle East launched a video called ‘Ode to Empty Roads’ echoing the authorities’ direction to stay home at the very beginning of the crisis, the easing of restrictions over the last few weeks signals a need to reconsider the impact on consumer behavior and needs. We can already see trends that have been emerging and will continue to shape the automotive sector in a postCOVID-19 era. Digital takeover: For years, experts have highlighted the growing importance of online and social media for consumer engagement; however, the current pandemic has kicked this into high gear. Online is not just a preference, it is now a way of life – and audiences beyond digital natives are getting on board.

The post-COVID-19 customer journey will have a longer online

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total flat glass output as a major proportion of automobiles are imported into the region.

In comparison to original equipment manufacturers ( OEM) automotive glass market, replacement market for automotive glass is quite vibrant in the Middle East region. The searing temperatures and challenging desert conditions in GCC states certainly put additional stresses and strains on vehicles; as such, demand for replacement of automotive glass is higher than in more temperate climates. phase – making it paramount for car brands to accelerate their digital footprint and provide multiple touchpoints for audiences – right from the discovery phase to sales and beyond. More brands will need to look at refreshing the typical car launch program and explore technology-driven solutions to connect with customers more directly. Value for money: As countries continue to tackle the longterm effects of COVID-19 on economies, consumers are bracing themselves for a long recovery period, which will in turn effect their spending patterns over the coming months. While cars are already viewed as a sizeable investment, existing and prospective buyers will be even more keen to derive the maximum value for their purchase.

While car brands have already started rolling out flexible financing options during this time, we will also need to look at other valueadded services to attract and serve customers, including extended warranty and service contracts, which can also potentially boost car resale value.

Heightened health and safety consideration: Although mobility is expected to pick back up when the pandemic eventually abates, most consumers will apply a lens of caution when it comes to health and safety. While safety has always been a key purchase driver, we expect an increased demand for features such as air purifying systems and filters – particularly for family cars.

The safety element has already understandably trickled into the aftersales segment with strict disinfection measures in place for all vehicles being delivered to customers, and we expect this to surely continue in the coming months. Convenience is king: As the current situation progresses, people are looking at brands to provide solutions that can ease their lives, as well as support their future plans– and car brands are no exception. There is a need to broaden the range of aftersales services for customers, as well as bring these online for ease of access and use. Many vehicle dealers in the region have already begun offering door-to-door vehicle maintenance and test drives, and we see this trend staying for a prolonged time even after COVID-19, with the most convenient options edging out the competition.

While the above are some of the trends we anticipate from a consumer perspective, the biggest imperative for car brands in a post COVID-19 era will be to remain agile. As restrictions look to ease up in the coming weeks, the automotive industry needs to adopt a more hands-on approach to gathering and analyzing customer sentiment, in order to build capabilities in real-time and provide effective solutions that will not only drive awareness and consideration for their products and services, but also garner brand loyalty in the longer run.

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HEGLA app: Close digitalisation gaps, improve processes

The glass maintenance and production of service tasks. Whether the future will be it’s a glass machine, fully networked stacker, roll-up gate, and digitalized. or indoor crane, Alongside digital all documents and support for maintenance jobs employees, it will can be filed in the provide quick app, which reduces insight into machine handling time and capacity and even means the information the current position is available anywhere of a specific pane. via smartphone, tablet, Thanks to central or an AR headset. For databases and example, if a machine The Shop-Floor Assistant app was designed to be an stand-alone, manufacturer-independent system. open interfaces, has a QR code, Depending on the configuration, access to data is possible from any location at any time. many of these one scan provides concepts would be immediate access to its possible today, but they are not easy to realise in practice. documentation. “Earlier, staff would have to leave the floor to Often, different production areas, software and systems search for the required documents, but now the app provides from a variety of manufacturers must be combined into one not only a time-saving alternative, but a user-friendly one, digital concept. With the Shop-Floor Assistant app, HEGLA too,” described Dr Schoisswohl. If a malfunction occurs, the New Technology has closed these gaps, providing operating machine operator, foreman, or in-house technician can take personnel with key information and helping to reduce note of this in the integrated ticket system and even add a process times. photo. The app informs the service staff immediately, providing

an initial impression of the measures to be taken. In this way, “To a great extent, productivity depends on machine the head of production or service always has an overview of performance and they way they are embedded in the the work to be carried out, can prioritise, delegate, and even production chain,” emphasised Dr Markus Schoisswohl, have its completion process documented.

Managing Director of HEGLA New Technology. “Beyond

that, sideline activities often have a significant impact on the overall process – and such activities can often be simplified Support in production and accelerated by means of digital tools.” Searching for Missing production documents, glass set down in the wrong racks, transporting them, fetching tools, gathering documents location, and the search for a rack are among the most frequent and organising maintenance and service work are all typical difficulties and delays that plague a smoothly dovetailed production tasks that can slow down production. “We asked ourselves chain. HELGA New Technology developed the “PanePro” section how we can support glass processors with such tasks using of Shop-Floor Assistant especially for such everyday tasks. If a simple digital means – irrespective of the manufacturer,” pane is laser-marked or has labels, one scan via smartphone is said Dr Schoisswohl. The answer: Shop-Floor Assistant in enough to pinpoint it at any position in the production chain, query smartphone and tablet versions. its progress, or request a replacement in the event of damage. It is also possible to identify a rack and its load via scan, or configure Support for maintenance and service a repair ticket if necessary. When the integrated rack tracking The “Maintenance” section of Shop-Floor Assistant offers function is used, the rack only needs to be selected from the comprehensive options for simplifying and centralising display and its current location information will be output.

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The app’s various functions map subsections and functions of the value chain, simplify processes, structure workflows, and make it possible to request the further transport of a piece of glass, report breakage, identify a pane, determine a rack position, organise maintenance process, and more.

PanePro is the section of the app designed specifically for glass.

It is used to identify glass, report breakage, track production data, and conveniently re-order right on the construction site with a simple scan.

Digital support for employees “Our aim is to design simple, practical mobile digitalisation for operators,” said HEGLA Managing Director Bernhard Hötger. All the more reason to design an app that can intuitively provide information without requiring access to a machine terminal. “The competitive pressure is increasing, and it is becoming ever more important to support people with digitalisation, ensuring that their work and expertise can make an optimal contribution to value creation,” added Mr Hötger. In his opinion, reducing the time it takes to carry Scanning a QR code or barcode on the machine provides direct access to its documentation. out sideline activities is an important step toward increasing productivity.

HEGLA GmbH & Co. KG

37688 Beverungen, Germany Shop-Floor Assistant has a modular structure and can be Carsten Koch implemented in stages, whether it’s to call up machine data or Phone: +49 (0) 52 73 / 9 05-121 for rack and glass logistics, on-site pane identification or specific Email: carsten.koch@hegla.de sets of tasks that need to be digitised.

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ANALYSIS: Container glass

Planning ahead… the unchanging course of beveraage packaging

AG examines whether the unprecedented global circumstances that 2020 has brought to the industry has changed the direction of travel for beverage packaging or if the sector is planning to continue as previously planned…

A

lthough there has been a sharp slump in consumption of many types of beverages, especially alcohol, this year, and with it, container glass sales, a recovery is already underway.

The situation is still fluid, with the Covid-19 pandemic still raging in major Asian markets and showing signs of reviving even in those countries which had initially controlled its spread. The uncertainty created by the pandemic is compounded by the economic recession it triggered, a recession forecast by economists before the pandemic struck, as part of a longer economic cycle. The mass layoffs and bankruptcies generated by these twin health and economic crises inevitably will dampen consumer demand, given lower disposable incomes, whose effects will be felt by both the alcoholic and non-alcoholic beverage and container glass industries. Demand will also remain weak from those sectors that will take longer to recover, like hotels and airlines, while cancellation of scheduled shipping services, owing to the global slump in trade, affects the ability of container glass manufacturers to ship to export markets even when orders emerge, However, those container glass majors who had already announced expansion plans are going ahead with them, albeit with some delay. They are optimistic of continuing growth given Asia’s demographic trends – huge and growing populations despite fertility levels falling in some regions, people living longer, more urbanisation, more women working, and higher economic growth leading to higher disposable incomes.

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A drop in demand

Demand for alcoholic drinks and non-alcoholic drinks has been affected differently by the Covid-19 pandemic, according to Brice Dunlop, Consumer & Retail Analyst, Fitch Solutions, part of the rating agency group. “Both alcoholic drinks spending and consumption will be depressed in the short term (2020 and 2021),” he told Asian Glass magazine. “Firstly, as a non-essential budget item for households, consumers will cut back on alcoholic drinks spending and focus their spending on essential items. Secondly, as part of Covid-19 related restrictions, restaurants, hotels and bars were shuttered for a significant part of the 2020 year. This is a significant consumption channel for alcohol, especially wines and spirits. While in many countries’ consumers could still purchase alcohol through the Mass Grocery Retail (MGR) channel, these products are generally cheaper, thereby depressing spending levels. While most restrictions have been eased, this segment is heavily exposed to several demand-side risks, such as the economic crisis depressing spending levels and consumers avoiding crowded areas like bars and restaurants.”

For the Asia region, Dunlop said Fitch forecasts total alcoholic drinks consumption (in million litres) to contract by -1.0% over the 2020 year.

“This is from our pre-Covid-19 forecast of 2.9% y-o-y growth. However, we do forecast alcohol consumption returning to positive growth over the medium term (2021-2024), where we forecast average growth of 3.1% a year.”

With essential items prioritized during a pandemic, the sale of non-

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ANALYSIS: Container glass

alcoholic drinks will perform well during 2020, Dunlop said. “Initially, consumers and households stockpiled these items, like bottled water and juices, via the MGR channel. This was further emphasized during the lockdown and restriction periods, as MGR, being essential services, were some of the only retailers not to shutter. As such, for the Asian region, we forecast spending on non-alcoholic drinks over 2020 to grow by 7.0% yearon-year in US dollar terms. This is from the pre-Covid-19 forecast of 6.1% y-o-y. We project demand for non-alcoholic drinks to remain strong, with spending growing by an average of 7.3% a year, over the next five years.”

Bottled water will be the best performing non-alcoholic drinks category over 2020, with spending on this item forecast to grow by 7.3% y-o-y, followed by fruit & vegetable juices, which will see spending grow by 6.7% y-o-y, with spending on carbonated drinks growing by 5.3% y-o-y, Dunlop said. “The Asian soft drink industry is currently facing a major challenge, as governments across the region are introducing or have just introduced various restrictions from excise taxes on sugar to other forms of restrictions in marketing, advertising and distribution. This will weigh on carbonated drinks spending.”

Expansive tendencies

Indian container glass majors are going ahead with expansion plans, looking beyond the impact of the pandemic, with India set to overtake mainland China by 2030 as the most populous country.

India’s Piramal Glass Private Ltd. in February, 2020 it announced a INR

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300 crores (US$42 million) investment to expand its Jambusar Plant in Gujarat, adding one new furnace of 250 tonnes per day (TPD) with 7 new manufacturing lines catering to high-end specialty spirits, food & beverage and pharmaceutical industries. This capacity will enable its foray from India into high-end specialty spirits catering to markets in Asia, Europe and the US, the company said. There is a growing need for high-end water bottles, spirits bottles and food packaging.

“Post-Covid-19, we are planning to expand our product mix into premium liquor and premium water both for commercial and household requirements,” Piramal Glass Vice Chairman Vijay Shah has said. “We will also expand in to household jars in the premium category.”

Indian rating agency ICRA, which in August, 2020 confirmed Piramal Glass’ BBB rating on long-term loans and raised its outlook to Positive from Negative, believes increased sales of specialty food and beverage (SF&B) containers and pharmaceutical glass will offset a slowdown in the firm’s cosmetics and perfumery (C&P) packaging business owing to the slowdown in the discretionary spends on account of the pandemic. C&P drove around 42% of its revenues in FY2020, followed by the SF&B (~36%) and pharmaceutical (~22%) segments. “While the company has deferred all of its non-critical capex in FY2021, in a bid to conserve cash, it is expected to resume the same from FY2022 onwards upon normalisation of the current situation,” ICRA Ratings said.

Piramal’s Sri Lankan unit, Piramal Glass Ceylon (PGC) is seeing a ‘V’

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ANALYSIS: Container glass

shaped recovery but is not sure how long it will last, given uncertainty caused by the pandemic and economic recession. Production resumed after a shut down in the initial lockdown with a statement on the June 2020 quarter, in which domestic sales fell 19%, saying in April – May 2020 customers making only essential products were functioning and that too at 50% capacity. From June 2020 domestic market demand stabilised and international markets opened up for business. “Non-availability of ships for India, USA and East Africa impacted exports but at the same time a spurt in demand for food jars from Australia and NZ helped to compensate lost sales,” PGC said. But it was unable to cater to a similar demand from the 2020f USA as shipping connections were not available.

2021f Management believes that with the New Product Development and202f2 inroads into new markets such as Mexico, Angola and Indonesia as well2023f as the increased demand from Australia, PGC will be able to sustain the2024f ongoing operations profitably. “We are witnessing a global surge in demand for glass containers in the Food & Pharmaceutical category; due to which PGC is poised to retain the volumes in domestic and international markets and continue the growth trajectory,” the statement said.

PGC Executive Director & COO Sanjay Jain said: “As COVID 19 pandemic situation is still evolving, it is difficult to quantify the future business impact on the company. However, we believe that demand would gradually get back to normal during the coming financial year. The company has restarted manufacturing site with 100% capacity utilization from the second half of May,2020.”

Lockdown disruption

Haldyn Glass Limited said production was disrupted for the first two weeks of lockdown, with labour shortages affecting work, but restarted in a phased manner with lower capacities that impacted volumes for the last week of 2020f March, 2020 and period up to June, 2020, when full production was resumed. 2021f While the liquor industry forms the largest customer segment, the company 202f2 is in the process of diversifying to other industry segments. The company’s 2023f products have also made inroads into the export market and its efforts to 2024f increase export have started showing good results.

“Covid-19 pandemic and resultant lockdown has hit hard the end consumers with resultant impact on the glass container industry,” the company said. “Reduced availability of labour force due to migration of workers to their respective native places affected the logistic activities of raw material and finished goods during first quarter of the current calendar year. Imposition of Covid tax / cess on liquor by various States will pose a challenge to glass container industries. Competitive environment and available surplus capacity in glass industry will continue to balance the demand/ supply scenario.”

However, Haldyn Glass, which last year packed and dispatched 1 lakh tonnes of bottles, said that on the positive side, container glass remains a “preferred choice for packaging” as it has long shelf life and doesn’t affect the taste and quality of the contents. With the increase in public awareness towards the environment and sustainability, glass bottles will continue to the favoured packaging choice for most consumers and companies. “All major hotel chains and food & beverage brands have started looking to minimise use of plastic based packaging. Liquor companies saw a revival in

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BOTTLED WATER WILL BE THE BEST PERFORMING NON-ALCOHOLIC DRINKS CATEGORY OVER 2020 Table 1

Asia wine consumption (m. litres)

2017

60,950.3

2018

61,457.3

2019

62,470.7 62,005.1 62,769.1 63,424.8 64,100.1 64,792.7

Asia wine consumption (m. litres)

Table 1 2017

3,376.10

2018

3,535.00

2019

3,679.80

Asia wine consumption (m. litres)

3,650.30 3,822.60 4,015.30 4,230.60 4472.6

Asia wine consumption (m. litres)

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ADVERTISER FEATURE

Pennine scales the heights with new patent Pennine Industrial Equipment Ltd has been granted a European Patent (EP 3348497) for its Swiftlink™ head protector link, this follows on from our US patent which has already been granted (US 10,358,293 B2).

The Swiftlink™ was designed to provide a new style of head protector that not only creates an uninterrupted transfer surface but also provides the ability to rapidly connect a chain when combined with our Pennlock system.

This type of chain is well designed to deal with the ware handling requirements of all types of glass containers and allows for reductions in maintenance time due to the rapid connection system.

Single pin operation • Continuous running surface for transfer and wear (even on a joint in the chain) • Fastest connection system for silent chain requiring no proprietary tools • Available in chains of all widths, guides and assembly types • Compatible with ground top and stainless steel chains

FURTHER INFORMATION: For more on this and other Pennine products contact the company directly at: Email: sales@pennine.org Telephone: +44 1484 864733

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ANALYSIS: Container glass

consumer demand during second quarter of the current calendar year after the adverse impact of Covid-19. Thus, management is of the view that new possibilities for use of glass would emerge and demand for glass containers is likely to increase in time to come.”

AGI Glaspac, the packaging products business of HSIL Ltd, is also going ahead with expansion plans, whose launch the pandemic has only delayed.

“We are aiming to increase our total capacity to 8-8.9 million bottles per day by 2022,” Rajesh Khosla, President & CEO, AGI Glaspac has said. “The packaging of beverages has become quite important after COVID-19, owing to safety concerns. The glass packaging industry is seeing increased demand from the food and beverage and pharmaceutical sectors as the COVID-19 pandemic has led to higher demand for medicine bottles, food jars and beverage bottles. About 90 per cent of the glass containers are used for food and beverage packaging.” The company sees new markets opening up globally due to an anti-China sentiment.

AGI Glaspac is adapting to the disruption caused by the pandemic 2020f by stockpiling a few months’ supply of Soda Ash, a primary raw material, 2021f to 202f2 cater to the demand while its sand manufacturing plant is running only partially due to the lockdown, which reduces the frequent movement 2023f of 2024f goods in and out of the factories.

Khosla said AGI Glaspac’s expansion plans have been slightly delayed due to the current pandemic. “We are hoping to complete them by the end of this year. We have plans to invest around INR 700 crore in two phases in a greenfield facility in the eastern part of India and INR 150 crore in expanding the existing facility at Telangana. The expansion is aimed at increasing the total capacity to about 8-8.9 million Bottles Per Day (BPD) by 2022.”

Hindusthan National Glass & Industries Limited, which has been in the red since 2012-2013, said sales fell by half in the June 2020 quarter from a year ago owing to the pandemic. Production was curtailed during the lockdown period as transport, labour and supply chains were disrupted, but was being ramped up in a phased manner.

Silver linings

Kinjal Shah, Vice President, Corporate Sector Ratings, ICRA Limited, said demand 2020f for glass packaging for essential services segments like food and beverages has 2021f spiked during the pandemic in India and is expected to remain stable over 202f2 the 2023f medium term. “This is on account of healthy demand for food and beverages 2024f during the pandemic,” she told Asian Glass. “Demand for glass packaging from alcoholic beverages is expected to decline in India due to expected decline in overall alcohol consumption in FY2021, given the closures of restaurants and reduced footfalls post their resumption of operations.”

Given the huge detrimental impact of plastic on the environment, increasing usage of glass bottles for the food and beverage segment is being witnessed, Shah said. “This trend is driven more by the greater awareness of adverse impact of plastic on the environment.”

Shah said demand prospects for glass packaging in India remain healthy, aided by its recyclable and reusable nature, low cost and inert nature. “Glass packaging is witnessing healthy demand from perfumery, pharmaceutical and food containers as well as the liquor segment. With greater awareness of the environmental impact of plastic, greater usage of glass packaging for beverages, like soft drinks and milk is foreseen.”

In the Asian region, the recovery in alcoholic drinks consumption will follow the wider easing of restrictions, as well as consumers adapting to a new normal, said Brice Dunlop of Fitch Solutions. “While consumers may not visit bars, restaurants and taverns as often as before the pandemic, we highlight both consumer and alcohol majors are adapting. The Direct-

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Table 1 2017

24683

2018

25907

2019

27261.5

Asia spirits consumption (m. litres)

26867.9 28530 30438.9 32651.8 35199.4

Asia spirits consumption (m. litres)

Table 1 2017

13735.3

2018

15102.8

2019

15815.1

Asia mineral/spring water sales (US$m.)

16970.8 18221.5 19614 21195.8 22947.3

Asia mineral/spring water sales (US$m.)

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ADVERTISER FEATURE

SORG is fully equipped to deliver Near infrared (NIR) camera Our advanced camera offers visualization and thermography at the same time. Available with two aperture angles, almost the entire furnace chamber can be monitored, including the flame burn-out on side-fired furnaces.

Example for side fired furnace

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Double-winged furnace pressure regulating flap

Reversal system - double deck slides Proven technology without separate combustion air flap with pneumatic or electric actuator Double-winged furnace pressure regulating flap This double-winged flap regulates the exact pressure in the furnace.

Stabilizing the melting process and saving energy, both wings feature different cross sections, positively influencing the control behavior.

Burner holder You can easily adjust the burner without changing the checkpoint on the nozzle. A cast plate connected to the holder, seals the burner brick to avoid an air inlet, which is crucial to reducing NOx emissions.

One place for every part Whether you require parts for a back-up system or general furnace equipment, we have everything you need to facilitate the changes quickly and easily, saving your plant valuable time and money.

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ANALYSIS: Container glass

To-Consumer trend is rapidly evolving and should support volumes growth over the short term. Over the medium term, Asia has both a favourable demographics profile, as well as a good disposable income growth. Both will support sustainable growth into the future.”

Asian consumers are not generally big beer drinkers, consuming some of the lowest amounts of beer, per capita, at an average of 19.4 litres,” Dunlop said. “Only Sub-Saharan Africa is lower, at 18.0 litres. On a regional basis, the per capita figure is being weighed down by significant population growth and the stagnation on actual consumption growth. In terms of total beer consumed, we forecast it will reach pre-Covid-19 levels over 2021. Spirits, Baijiuin particularly, will witness significant growth over the medium term, mostly from China, as consumers see their disposable incomes grow and baijiu is a seen as a more sophisticated product. Demand for wine will follow a similar trajectory.”

In China, as an essential spend segment, Fitch believes that consumer spending on non-alcoholic drinks will be shielded from the negative impact on overall consumer spending. “In the mid-term, we expect beer consumption to contract over the medium term but forecast that wines and spirits will experience moderate to high growth of between 6-9% as Chinese consumers get increasingly sophisticated in their tastes for Western alcohol products,” Dunlop said. “For non-alcoholic drinks, coffee is expected to outperform as it becomes perceived a premium beverage, especially with the hipster cafe trend catching on in China.”

Non-alcoholic drinks spending growth in India will strengthen in 2020 as consumers increase their focus on priority purchases, particularly on grocery products due to the high levels of uncertainty stemming from the negative impact of the Covid-19 pandemic on the employment and wage prospects of consumers in the country, Dunlop said. “Alcoholic drinks consumption and spending is projected to contract due to restrictions on trade and mobility in response to the Covid-19 pandemic as well as shifting consumer purchasing patterns. Our medium-term outlook for India’s drinks sector is positive with non-alcoholic drinks spending projected to grow at an average annual growth rate of 9.0% y-o-y over 2020-2024. In addition, we forecast the alcoholic drinks segment to begin to recover from 2021.”

Table 1 2017

31532.4

2018

33446.7

2019

34388.7

2020f

36200.7

2021f

37992.5

202f2

40366.1

2023f

42944.2

2024f

45866.8

Asia carbonated drinks sales (US$m.)

Asia carbonated drinks sales (US$m.)

2017

150578.5

2018

160017.7

2019

162873.3

2020f

174603.1

2021f

183559.2

202f2

195599.8

2023f

209128.4

2024f

223939.2

Asia non-alcoholic drinks sales (US$m.)

Asia non-alcoholic drinks sales (US$m.)

Positive signs

In Malaysia, Fitch Solutions’ outlook for non-alcoholic drinks spending growth in 2020 is positive due to the shift in consumer purchasing patterns towards essentials amid growing levels of uncertainty due to the Covid-19 pandemic.

“Alcoholic drinks consumption growth is projected to contract in 2020,” Dunlop said. “With most restaurants, hotels and bars closed for a significant portion of the year, consumers are not going to spend as much on alcoholic drinks. Our medium-term (2020-2024) outlook for drinks spending growth in Malaysia is positive with both the non-alcoholic drinks and alcoholic drinks spending segments posting positive growth. The spending power and size of the Malaysian middle class will continue to grow, and this will have a positive effect on the domestic alcoholic drinks sector. The tourism sector will remain a major driver of industry growth throughout our forecast period. While tourists

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1

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ANALYSIS: Container glass

provide a boost to consumer goods sales across the board, their impact is especially notable in terms of sales of high-end premium products.”

Fitch forecasts for growth in non-alcoholic drinks in Pakistan, where alcohol production and consumption is restricted, have been revised slightly downwards for both 2020 and 2021, given the spread of the pandemic. “The sales tax on sugar was increased from 8% to 17% in June 2019, making the overall tax rate for carbonated soft drinks in Pakistan one of the highest in the region. This could start to adversely impact the sector going forward,” Dunlop said.

Beverage companies are reporting a recovery in sales and appear optimistic the worst is over, although they warn that a prolonged pandemic and recession could delay the upturn. The Confederation of Indian Alcoholic Beverage Companies has said Indian liquor sales are likely to fall by 35-40 % in the current year in volume terms due to the Covid cess and the ban on on-premise sales in bars and restaurants. There will be some recovery as economic activities pick up, but unless there is a correction in price, overall sales of liquor will be sharply lower. India is considered the third-largest liquor market in the world, and the largest in whiskey.

Varun Beverages Limited, the largest franchisee for PepsiCo in India and sole franchisee in Nepal, Sri Lanka, Morocco, Zambia, and Zimbabwe, said sales volumes are picking up gradually as lockdown restrictions ease.

“While constraints continue due to restriction in several parts of the country and near term demand outlook remains uncertain, the decline in out-of-home consumption of beverages was partially offset by increase in in-home demand,” said Ravi Jaipuria, Chairman, Varun Beverages Limited. “With new phases of Unlock announcements, we are taking measures to scale up the capacity utilisation to pre COVID 19 levels.

Consumers, especially in urban markets, are banking on online channels to buy groceries and essential products, and as recovery in rural demand surges, we should once again see encouraging growth, going forward.

With overall macro economic environment expected to normalize by the end of this calendar year, we remain confident of a strong demand revival in our product category in the coming fiscal.”

Total sales volumes of Varun Beverages were down 46.4% YoY at 104.8 million cases in Q 2 2020 as compared to 195.5 million cases in Q 2 2019.

Sales volumes in India were down 48.2% YoY at 88.8 million cases in Q 2 2020 as compared to 171.5 million cases in Q 2 2019. Carbonated soft drinks (CSD) constituted 85%, juice 7% and packaged drinking water 8% of total sales volumes in Q 2 2020.

Jaipuria said Varun Beverages production lines are all flexible. “They

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can produce smaller bottles as well as bigger bottles. As in-home consumption has increased, our medium and large bottles are selling much more than our single serve. Internationally, we are reasonably in good shape now. The COVID effect is pretty well behind us. Internationally, we expect doing better than last year, going forward starting from this quarter.”

Mixed messages

Diageo, one of the world’s largest alcoholic beverages producers, does not anticipate that its global on-trade business recovers to volumes experienced in the year ending 30 June 2019 within the next 18 month period. In India, Diageo said following lockdown, several states have allowed home delivery for the first time. “The opening up of this new channel offers an exciting opportunity to increase the accessibility of alcohol in India,” it said. “While still a very nascent channel, our effort as an industry is to help establish this as a long-term model. Despite the current challenges in the market, we remain optimistic about the longterm market opportunity.”

AB InBev has said the pandemic resulted in a sharp contraction of sales during the second quarter of 2020 in many countries in which the company operates but a recovery was underway. The highest fall in volumes in the half-year to June 2020 was in the Asia-Pacific region at 22.2%. “As the quarter progressed, however, we saw considerable improvement in performance from month to month. We came out of the quarter with reinforced confidence in the resilience of our business and the global beer category.”

Coca-Cola said that in Asia Pacific in the June 2020 quarter, unit case volume declined 18 percent, which included a 13 percent decline in sparkling soft drinks, a 28 percent decline in water, enhanced water and sports drinks, a 31 percent decline in juice, dairy and plant-based beverages and a 15 percent decline in tea and coffee. “Our current estimates reflect our belief that the second quarter of 2020 will be the most severely impacted quarter for the full year 2020; however, we still estimate that the various shelter-in-place orders, reopening plans and social distancing practices will have a negative impact on our business in the second half of 2020.”

Coca-Cola Co. Chairman & CEO James Quincey said sales will recover as stores re-open as lockdown measures ease. “We are social creatures as humans and we like experiences. People will want to go out. There will be habits that will have changed, but we will go out and experience the world and these channels will bounce back.”

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ANALYSIS: Container Glass

LANDSCAPING packagers aim for bulk

AG considers that although the changing demands of the Asian container glass industry led to a spate of takeovers, mergers and acquisitions, whether the momentum for such activity has started to wane…

C

omprising of some of the largest container glass producing countries, including China, India, Thailand, Japan and the Middle East region, Asian container glass industry has its ups and downs in last few years. The industry has registered healthy growth demand in some of the key markets on account of rising disposable incomes and more inclination towards consumption of packaged food & beverages. However, on the other hand, muted growth has been seen in a number of Asian markets due to decline in alcohol consumption ( largest subsegment for container glass industry), challenges from other forms of packaging such as PET ( in non-alcoholic beverage sub-segment) and metal cans ( most noticeable in beer packaging).

Consolidations, merger and acquisitions and joint-ventures have gained some speed in Asian container glass industry, but the pace of these corporate actions have been slower that what was anticipated a decade back. In comparison, European and American container glass industry has undergone consolidation and acquisition at a much greater speed. Container glass industry in most of the Asian countries continue to be dominated by domestic companies.

Multinational corporations have failed to make a big dent in the market share of major domestic producers.

On the demand side, vast untapped market coupled with increasing millennial population would be the key driver for the growth of the Asian container glass market.

Globalisation impacts

Globalisation has had a very profound impact on most of the industries in last two decades. In case of glass industry, the impact of globalization is markedly different in both the major sub-segments and across different continents. While, the globalization is more evident in case of flat glass industry across all the regions, in case of container glass industry the impact of globalization is not as pronounced as in the case of flat glass industry. As mentioned at the outset of this article, American and European container glass industry has undergone consolidation at a much greater pace compared to Asian container glass industry.

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A case in point is Owens Illinois, largest global container glass producer, which entered into Asian market with much expectations at the start of the last decade.

Year 2010 was a very significant year for OI in China. The company made three acquisitions (Sichuan province, Guangdong province and Hebei provinces) and during that year to more than double its installed capacity (more than one million tonnes, up from 440,000 tonnes), making the company China’s second largest glass container manufacturer.

Speaking at that time, OI Chairman and CEO of the day, Al Stroucken had said, “This acquisition supports our strategy of expanding in emerging markets with strong growth and long-term earnings potential. Our operations in China now include eight glass manufacturing plants, as well as a plant in Tianjin that produces moulds for glass manufacturing. The newly acquired plants have lower cost profiles than our existing operations in China, thereby enabling us to expand our reach beyond the premium markets and into the rapidly growing mass beer market.”

However, ten years later, OI is not that sanguine about its Asia pacific glass business. The company has recently sold its Australian and New Zealand (ANZ) business to Australian company Visy Packaging in July 2020.

O-I ANZ is the largest manufacturer of glass bottles and containers in Australia and New Zealand, with five manufacturing facilities located in Adelaide, Brisbane, Melbourne, Sydney and Auckland and a recycled glass processing plant in Brisbane. Headquartered in Melbourne, the business generated sales of approximately AUD $754 million in 2019.

“The sale of our ANZ operations is consistent with our strategy to properly align our business with the interests of our global customer base, improve financial flexibility and maximize shareholder value. O-I will continue to develop its leading market positions across Europe and the Americas as well as the company’s interests in Asia. The sale of ANZ follows an in-depth strategic review of our global business portfolio and operating structure which is now substantially complete following this transaction. We received a full and fair price for ANZ, and this sale represents a significant milestone in our business

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ANALYSIS: Container Glass

G THE FUTURE

transformation as we optimize our structure and prioritize debt reduction,” said Andres Lopez, CEO of O-I at the time of this announcement.

In January 2020, the company was contemplating to sell its entire Asia Pacific business, which included two production bases in China and one each in Indonesia and New Zealand. OI also has joint venture operations in Vietnam, Malaysia and China.

Pharma-action

Pharmaceutical and cosmetics glass sub-segments are expected to see a number of corporate shake ups and rearrangement in Asian container glass industry in coming years. While, the current Covid endemic is expected to hasten the process the process in the pharmaceutical sub-segment, increased spending on cosmetics & perfumery will drive these actions in Asian container glass industry in coming years.

Declining shares of container glass in alcoholic beverage and non-alcoholic beverage is estimated to be counterpoised by these two sub-segments. Over the counter products (OTC) and specialty products are the key segment driving the pharmaceutical and cosmetic industry, respectively. Furthermore, ampoules and vials require glass packaging to maintain its inertness as per strict guidelines from pharmaceutical regulatory authorities. These are some of the products

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driving the demand of glass containers within the pharmaceutical industry.

Global pharmaceutical glass packaging market is estimated to grow at a CAGR of nearly 5 percent to exceed a market size of $20 billion by 2023.

India

Indian container glass industry continues to be an enigma. Despite the low per capita use of container glass, vast population, rising disposable income and size of middle- class, it has been almost more than six years, when the country’s container glass industry witnessed major capacity expansion. Even the existing container glass producers are running at low capacity utilisation levels.

However, in specialty glass and pharmaceutical glass sub-segments, Indian container glass industry has seen some realignments and capacity additions in last few year.

Piramal Glass, India’s third largest container glass producer in terms of installed capacity and one of the largest producers of specialty container glass products has been soliciting offers for sale of its container glass business, which has production plants at four locations in India, Sri- Lanka and USA. Piramal Glass, which has an installed capacity of nearly 1,500 tonnes per day of glass containers from its four production plants has appointed Bank of America (BoA) to carry out the sale proceedings on its behalf.

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ANALYSIS: Container Glass

Piramal Glass is expecting to realise nearly USD 1 billion from the sale of its entire container glass business. An executive from Piramal Glass told AG on the condition of anonymity, “German container glass producer Gerresheimer and French groups Saverglass and Verescence are in contention to buy our container glass business.”

Piramal Glass is a global specialist in design, production and decoration of niche glass packaging solutions for high-end cosmetics & perfumery, specialty food & beverage and pharmaceutical industries. In February 2020, the company had announced an investment of INR 3000 million (US$42 million) in a greenfield project in Jambusar, Gujarat, India. The expansion plan includes 1 new furnace with 7 new manufacturing lines across ~300,000 square feet plant, catering primarily to high-end specialty spirit, food & beverage and pharmaceutical markets primarily for exports to countries in Asia, Europe and the US. Commenting on the investment, Vijay Shah, Vice Chairman, Piramal Glass said, “We are delighted to announce the expansion of our Jambusar plant in Gujarat, India. This will enable us to offer our premium customers in Asia, Europe and the US, innovative value-added glass packaging across high-end Specialty Spirits and Food & Beverage Industries. This world-class plant equipped with cutting-edge technology rooted in the principles of digital manufacturing will also create job opportunities in the region.”

Another important development in Indian container glass industry has been the entry of German specialty container glass producer, Heinz Glass.

The German company entered into a joint venture with Indian container glass producer Haldyn Glass in 2015 to produce glass containers for premium packaging products by setting up a new production facility in the state of Gujarat.

German company, Heinz has over 400 years of experience in manufacturing perfume and cosmetic glass bottles for international markets, and is regarded as one of the world’s leading manufacturers and finishers of glass flacons and caps. With presence in 16 locations worldwide, Heinz’s core competencies lie in the in-house development division and mold construction unit as well as state of the art production and refining technology Haldyn Glass has an experience of over five decades in creating innovative bottle shapes and sophisticated designs, giving a cutting-edge advantage to its clients. Due to the expertise of its glass technologists and other technical and management resources and long established world class manufacturing and management.

German pharmaceutical glass producer Gerresheimer entered into Indian container glass market by acquiring an existing pharma glass producer in the state of Gujarat in 2011. In India, the company produces glass vials and ampoules for local and international customers across two sites. The Neutral Glass plant in Kosamba makes pharmaceutical primary packaging from moulded glass, while the Gerresheimer Kosamba factory next door produces vials and ampoules from tubular glass.

Another European pharmaceutical glass producer, SGD Pharma, a world leader in glass pharmaceutical packaging for healthcare industry entered Indian pharmaceutical glass market by acquiring an existing container glass producer, Cogent Glass, a moulded and tubular Type I glass manufacturing facility in 2013.

The SGD Pharma India glass plant is strategically located on the Hyderabad-Bangalore highway, approximately 120km away from Hyderabad and spread across 36 acres. The new corporate office is located in Hyderabad, which is an important pharmaceutical hub in the country.

The company produces more than 9000 tonnes of moulded Type I pharmaceutical glass containers and 4000 tonnes of tubular vials and ampoules (corresponding to more than 700 million pieces) are produced annually at its Indian facility.

India’s National Green Tribunal’s efforts to curb use of plastic packaging will increase the opportunities for the container glass producers in the

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Corporate actions in India Company Piramal Glass

Description One of the largest speciality glass producers in Asia Haldyn Henz Glass The JV between Haldyn Glass and Heinz glass operates a container glass plant in the state of Gujarat Gerresheimer Two glass plants in India

SGD Pharma

Pragati Glass

Remarks Looking to sell its container glass business First JV between a premium European container glass producer and Indian container glass company

Entered Indian pharma container glass market by acquiring an existing Indian container glass producer One production Entered Indian pharma plant container glass market by acquiring an existing Indian container glass producer Pragati Glass Oman Set up a container glass LLC unit in Oman in the GCC region. One of the two Indian container glass producers to have an overseas container glass plant.

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ANALYSIS: Container Glass

coming years. The ban on the use of single use plastic by various state governments across the country is gaining momentum, pushing users to shift to alternative [non-plastic] packaging. The concept of non-plastic packaging is also picking up in major hotel chains and food and beverage brands including in mineral water. Due to public awareness on effect of use of plastics on the ecology, environment and the weather, glass is gaining momentum, as the preferred packaging option for environmental well-being. Container glass producers are expecting that the use of glass containers and bottles is likely to surge in times to come.

According to Rajesh Khosla of AGI Glasspac, “Ban on usage of single use plastics will open a host of opportunities for container glass producers.

We are gearing up to support India’s vision to replace plastic with green and environmentally friendly product. We have expanded our capacity to meet the rising demand. Since plastic is lighter in weight and easier to use, glass uses new technology to match the characteristics of plastics. NNPB can produce the best glass bottles, and the current trend is tempering, using appealing colours and other value additions. We are also tailoring our supply chain to cater to the market.”

The Middle East

PIRAMAL IS EXPECTING TO REALISE US$1BN FROM THE SALE OF ITS CONTAINER GLASS BUSINESS

Comprising of a dozen container glass producer, the Middle East region has seen a few changes in the container glass industry in the last few years. While the glass bottles market is relatively small in these countries because of alcohol laws, but, low energy prices and access to readily available raw materials have encouraged the production and export of lowcost glass containers. This opportunity has attracted four new container glass producers to commence production in the region in the course of last decade.

United Arab Emirates

Though, second largest in terms of volume of production in the Middle East region, container glass industry in the United Aram Emirates has seen most of the actions during last decade.

Jabel Ali Container Glass, which is the largest container glass producer in the country has once again seen the change of ownership. In 2018, African container glass producer Frigoglass SAIC sold its container glass subsidiary Frigoglass Jebel Ali FZE to ATG Investments Limited.

Spread over an area of 68,000 square meters, Jabel Ali Container glass production facility features state of the art production equipment was commissioned in 2009 and is highly energy efficient with a capacity exceeding 360 tons per day of container glass.

Earlier, in 2011, Jabel Ali Container Glass was acquired by South African company Frigoglass. Frigoglass glass operations are Container glass producers in the GCC Company Location based in Nigeria through its container glass company Beta Glass PLC. With three furnaces Jabel Ali Container Glass Jabel Ali and capacity exceeding 600 tons per day, RAK Ghani Glass LLC Ras Al Khaimah Frigoglass is the largest manufacturer of glass Saverglass LLC Ras Al Khaimah bottles in West Africa.

Beta Glass was established in 1974 and Kuwait City produces varieties of glass containers for Gulf Glass Manufacturing Nigerian market and markets in other countries Company Sohar in the West Africa region. Beta Glass has Majan Glass the largest glass container capacity in West Pragati Glass LLC Nizwa Africa with two plants and three furnaces Mahmood Saeed Glass Jeddah with capacity to produce more than 600 tons Industry Company of glass containers per day. The company is National Company for Glass Riyadh currently planning to increase capacity to over Industries 700 tons per day.

Jeddah One of the most significant development Saudi Arabian Glass Company Limited of UAE container glass industry in the recent

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Country UAE UAE UAE

Installed Capacity

Kuwait

360 tons per day 110 tons per day 150 million containers per year 310 tons per day

Oman Oman Saudi Arabia

250 tons per day 140 tons per day 360 tons per day

Saudi Arabia

240 tons per day

Saudi Arabia

1,000 tons per day

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RATH: technology that’s breath of fresh air…

Removing dust from particulate-contaminated industrial flue gases at high temperatures early enough is a requirement that makes sense not only from an economic point of view, but also from an ecological point of view. However, where synthetic fiber filters reach their limits at around 250°C, with ceramic filter elements flue gases up to 1,000°C can be filtered: The microporous filter material made of high temperature wool boasts its strengths. RATH has been developing innovative hot gas filter elements for many years, because those who are familiar with refractory technology are also predestined for hot gas filtration.

Be it fine dust, sulfur dioxide emissions or nitrogen emissions caused by high melting temperatures, for example; they all cause poor air quality. As a result, the glass, cement and metal industries, chemicals and petrochemicals as well as waste incineration and recycling plants - like many other industrial sectors - face the same challenge: Filtering and dedusting flue gases and pollutants as efficiently as possible and reducing their emissions.

For many decades, synthetic fabric filters and bag filters have been used as standard for filtering and dedusting. However, these reach their limits when dedusting and filtering industrial flue gases in the high temperature range: They cannot withstand high temperatures and pollutants can no longer be filtered appropriately. It is different with ceramic filter elements: These can be used to filter hot gases up to 1,000°C. Cooling the gases for the purpose of filtering becomes obsolete, saving companies money and energy.

With FILTRATH®, RATH has developed a highly efficient hot gas filter cartridge system for the filtration of hot gases. “The hot gas filter cartridges we have developed have consistently stable filter properties over the entire temperature range of 250° - 1,000°C. Therefore, they can be used in existing flue gas processes without temperature adjustment”, explains Manfred Salinger, Managing Director of RATH Filtration GmbH. The excellent quality of these products is based on decades of manufacturing expertise in the refractory industry, especially in the field of high temperature insulation wool: The FILTRATH® ceramic filter elements consist of vacuum-formed, inhouse high temperature wool, they are light, highly porous and have a very low pressure drop. Companies benefit from this on various levels: By using these filter elements, not only are the strictest emission requirements met, but downstream systems and processes are also protected and high-quality, dust-like substances are recovered.

The FILTRATH®CAT catalytic filter elements were developed for multi-pollutant emission control: These rigid, yet highly porous and catalytically-coated ceramic filter elements are used for multi-pollutant control of (fine) dust, acidic gases, dioxins and nitrogen oxides used in hot gas flows (at temperatures of 250° - 420°C). “RATH delivers

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tailor-made solutions to ensure optimal catalytic performance”, says Manfred Salinger.

Saving energy AND money…

Hot gas filtration with ceramic filter elements saves industrial companies energy and money - and brings many other advantages.

Companies that rely on RATH’s innovative hot gas filter cartridges also benefit from this.

Thanks to hot gas filtration with ceramic filter elements, particulatecontaminated industrial flue gases can be filtered early at high temperatures. In contrast to synthetic fabric filters – in which the performance limit is reached at around 250°C – the flue gases don’t have to be cooled separately, but can be filtered up to 1,000°C. This not only saves energy, but also pays off financially for companies.

But this type of filtration has other advantages: The dry particulate separation enables the preservation of process gas and dust properties. Another positive: the cost-effective protection of catalysts.

Another big positive: thanks to ceramic hot gas filtration, downstream systems are also protected by avoiding corrosion and deposits. In addition, this type of filtration benefits the environment: As no water is required for this type of filtration, the problem of wastewater is also eliminated.

“Based on decades of extensive refractory expertise, RATH has developed a highly efficient and robust hot gas filter cartridge system that replaces conventional textile filters for a flue gas temperature of 250°C or higher”, explains Manfred Salinger, Managing Director of RATH Filtration GmbH. The FILTRATH® ceramic filter elements are made of high temperature wool, they are light, highly porous and have a very low pressure drop. Due to their excellent separation performance, they meet the most stringent emission requirements. These filter elements can be used at temperatures of 250° - 1,000°C. They are made from our in-house high temperature wool, which brings valuable synergy effects and additional scope for the new and further development of innovative filter elements.

The FILTRATH®CAT catalytic filter elements are the perfect 3-in-1 solution and have been developed multi-pollutant emission control.

These rigid, yet highly porous and catalytically-coated ceramic filter elements are used for multi-pollutant control of (fine) dust, nitrogen oxides, acidic gases and dioxins in hot gas flows of 250° - 420°C. “In short: They remove dust and nitrogen oxides from flue gases in a single step”, says Manfred Salinger. There are also advantages on the cost side: There is no need for separate electrical or bag filters or SCR systems so the investments are lower.

FURTHER INFORMATION: To learn more, please contact: E: manfred.salinger@rath-group.com www.rath-group.com/filtration

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ANALYSIS: Container Glass

years has been the entry of French luxury container glass producer Saverglass in the country. French company entered into UAE in 2013 by setting up a new manufacturing plant. UAE was the first location outside Europe for Saverglass. Company’s state of the art production facility based at Ras Al Khaimah has an installed capacity to produce 150 million bottles annually.

Saverglass is world’s leading manufacturer specializing in the production and decoration of luxury and high-end glass bottles for the wine and spirits industry. Proximity to South Africa, Asia and South America and low production cost in the Middle East region was the major reason behind Saverglass’s move to United Arab Emirates.

Saverglass has three glassmaking sites and three decoration sites in France, a glassmaking site in the United Arab Emirates and a glassmaking and decoration site in Mexico. During the closing days of 2019, Saverglass finalized the acquisition of the Belgian company MD Verre, a subsidiary of the Spanish group Vidrala. Located on an 84-acre site, MD Verre produces some 160,000 tons of glass per year, mainly entry-level wine bottles at its Wallon production facility in Ghlin.

Saudi Arabia Largest container glass producer and consumer in the Middle East region, Saudi Arabia’s container glass industry has remained a play among domestic container glass producers.

Saudi Arabian Glass Company, National Company for Glass Industries and tableware & container glass producer Mahmood Saeed Glass Industry Company continue to dominate the country’s container glass production.

Rest of the GCC

Dominated by Oman’s two container glass producers- Majan Glass and Pragati Glass and Kuwait’s Gulf Glass Manufacturing Company, container glass industry has seen steady growth rates in the last few years.

The region saw the entry of a new container glass producer at the start of the last decade. Pragati Glass Gulf LLC set up in April 2009, where its parent company India based Pragati Glass has a 55% stake with 15% held by another Indian partner and balance being held by a local partner. It was set up to take advantage of the lower input cost, mainly gas, a primary input for manufacturing. The company is mainly into the mass food & beverages segment and also caters partly (30%) to the cosmetics and perfumes industry.

Hitherto dependent on import of its entire container glass demand, Qatar will see addition of a new container glass factory by the end of 2021. Qatar Industrial Manufacturing Company (QIMC) is putting up a new container glass factory ( Gulf Glass Factory (GGF) project for the production of glass containers. The cost of the project is estimated to be about QR230 million.

QIMC holds a 50 percent share in the Gulf Glass Factory project. Four other investors from Qatar, Lebanon and Australia share the remaining 50 percent of the project capital.

The design capacity of the project is 200 tonnes per day and it’s designed to add a second line of production with the same capacity to bring the total capacity to 400 tonnes per day in the future.

The products will be marketed in the Qatari and in neighboring markets (especially Lebanon, Jordan and Iraq) as well as international markets. Italian company Falorni Gianfranco will supply the production equipments for the project.

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AG 20-4 asianglass

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SPECIAL REPORT

In focus

GURIND ACCOR: A BEACON OF HOPE

Nilanka Mendis, Quality Assurance Manager and Management Representative for ISO of Gurind Accor (Pvt) Ltd, talks to Rohan Gunasekera about the state of play for the Sri Lanka’s glass processors.

Glass processors in Sri Lanka should be salivating at the prospects created by the island’s post-war building boom, especially a massive, Chinese-funded reclamation project that will create an entirely new city next to Colombo port on which many glass-walled high-rises are envisaged. But the six processor in the island are still fighting for business that will fill processing capacity given the reliance on imported glass, especially Chinese, by project developers entitled to duty-free imports.

Sri Lanka’s Browns Group now owns Gurind Accor, having bought an 85 percent stake in the company for a consideration of Rs. 53.8 million. Gurind Accor is licensed to use India’s Gurind glass trade name. Being a part of the Browns Group, Gurind Accor benefits from synergies with its sister group company, Ajax Engineers (Pvt) Ltd, a subsidiary of Browns, and a big player in installing aluminium curtain walls, doors, windows and glass facades.

Ajax does the aluminium part of contracts and the glass part of the business goes to Gurind Accor.

are on hold for the time being given the external shocks we have experienced in recent months that have slowed down market growth.

Our existing plant is about 10 years old with a bed size of 5100mm x 2050mm (16 feet x 6.75 feet). We had planned to expand the factory with a new tempering plant with a capacity of 1,000-1,200 sq m a day capable of processing bigger sized glass to be supplied by China’s North Glass. But this is on hold for the moment.

We did do some renovations at the factory recently which has improved capacity and we are also getting a new washing plant for coated glass washing.

AG: How do you assess the current state of the market?

GURIND: The economy had been recovering after the slowdown caused by the Easter Sunday terrorist bombings in April 2019. And after the government changed following the presidential election in November 2019 the uncertainty that till then had affected business was removed and business sentiment improved. Unfortunately the Covid-19 pandemic this year again disrupted economic AG: What is the current status and activity and brought the construction capacity of your factory and how are sector to a halt. you equipped?

The market has now begun recover after GURIND: We started the factory the shutdown imposed by government expansion after 2015 and now have to control the spread of the coronavirus. a tempering capacity of 600 square There had been delays in making metres a day or 14,000 sq m a month, payment for construction projects which depending on the thickness of the glass resulted in cash flow problems which we process at any given time. Our plant however the government has now begun has European and Chinese equipment addressing. With the pandemic under Nilanka Mendis-Gurind Accor (Pvt) Ltd with certain Chinese suppliers using control we see a gradual recovery in the European technology. Gurind Accor is a Bureau Veritas market. But recovery in the construction sector is still very certified company with a modern tempering and insulated slow, although work on projects has resumed, given the glass facility which caters to specialized needs in tempered need to observe strict health guidelines such as the need to glass and double glazed glass under the brand name of maintain minimum physical distancing rules. This will slow Gurind Tuff. down work on construction sites which say, employed 4-500 The main equipment at our factory currently consists of a labourers at a time earlier, but now can’t given the need to fully automated cutting machine from LiSEC, Austria, a fully maintain social distancing. computerized process tempering plant from China with AG: Glass processors had been complaining of imports technology from Siemens of Germany and an advanced fully taking away market share. What is the position now? automatic double glazing facility from South Korea. We also GURIND: The biggest problem is the threat of cheap have a fully automatic grinding machine from China which imports from China which is causing disruption in several can grind and polish 2.5-15mm glass with assured high sectors, especially in the construction industry and glass quality edging and high processing speed, a fully automated processors are badly affected. Everything is coming from CNC water jet cutting machine from China and an Artcut China, even nuts and bolts, which is a big threat to any Sri CNC Co. automated sand blasting machine from China.

Lankan industry. With so much glass coming from China at AG: How do you plan to expand capacity and upgrade very cheap prices it is very difficult for us glass processors to your plant?manufacturing equipment? maintain our position in the Sri Lankan construction market.

GURIND: We do have plans to expand further but these Many construction projects go to Chinese contractors

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SPECIAL REPORT

There is also a new ‘Green’ building code but it is voluntary…

leaving not enough business for Sri Lankan construction companies for whom we process glass. When Chinese companies get contracts they get an agreement that allows them to bring everything, including glass, from China. Shipping costs are not a barrier as freight rates are low enough.

There are also quality issues with imported glass such as glass coming from China. Gurind Accor gets its raw glass from word class manufacturers, mainly based in India. But unfortunately Sri Lanka does not have standards to prevent low quality glass imports.

Furthermore, there are several advantage for customers in buying from a local processor like Gurind Accor. We give a five-year warranty, a big advantage. And being present locally, we are in a position to immediately replace any glass that gets broken. But for a contractor relying on imports, if there are breakages, they would have to import again, increasing costs. When they buy from us we can minimise their losses. When we get a project we don’t bring only the exact quantity, we bring a bit in excess. So when glass breaks we can supply.

And for a building site we can supply glass step-by-step, depending on use. It means there’s no need for a lot of glass storage on site where they can get damaged or weathered.

AG: How would the government import restrictions imposed to handle the foreign exchange crisis which was worsened by the economic disruption caused by the pandemic affect local industry?

GURIND: The government import restrictions and emphasis on supporting local industry and import substitution will certainly help local businesses. For instance, the import of several construction items has been banned such as aluminium extrusions and aluminium accessories, which means that contractors would have to buy these from the local market. This means good prospects for Sri Lankan businesses.

Unfortunately, the government has still not increased the import tax on glass. The government should impose taxes on whoever imports the finished product. The local glass processors have the ability to bring raw material and do the processing in Sri Lanka. If the local glass processing industry is to progress we need government support and more project work to be reserved for the Sri Lankan construction sector.

AG: What are the trends you see in the market? What types of products are in demand, apart from basic safety glass?

GURIND: We do see a trend towards using more low-e glass and coated glass and smart glass. But it is still in the early stages given the higher costs and inadequate awareness. But awareness is improving as knowledge about the energy saving features of these new types of glass in a hot climate like ours become more widespread.

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There is also a new ‘Green’ building code but it is voluntary and the government is yet to make it mandatory by regulation.

If the environmental authorities were to make the new ‘Green’ building code mandatory it would increase demand for products like coated glass.

Now we temper solar reflective glass, the new trend in the market because of its energy saving attributes. People are converting to coated glass as it can cut down the electricity bill by 50-60 percent.

Our company is certified by world class glass manufacturing companies. We have the facilities to do coated glass under certification from Guardian of the USA, Saint Gobain and Pilkington. Also we get glass for processing from Sisicam, Turkey.

The demand for coated glass is mainly from clients like hotels but now we even get requests from home owners for coated glass because of its energy saving features, despite its higher prices, being a special product. For some coated glass you have to apply silver nitrate and silver is very expensive.

Also when doing processing we can’t do it like ordinary glass and have to handle coated glass like an ‘ICU’ patient, giving additional protection to the glass until tempered. As the production cost is more, the product also costs more. Prices vary according to the coated layer. More than 75 percent of the market is still for standard glass such as for shops, with coated glass only about 25 percent, demand for which is mainly from hotels and upmarket homes.

Demand for coated glass is picking up, though. The shift was first from clear glass to tinted glass but tinted glass still means 100 percent heat transmission. Coated glass reflects heat and cuts down heat transmission according to the applied layer.

AG: How are your exports doing?

GURIND: Before the coronavirus pandemic we were doing some exports but this has now been affected. We had a good market for instance in the Maldives, especially supplying to hotels, but now it has stopped. Now we find that even in the Maldive islands, the Chinese suppliers have jumped in. Hotel projects in the Maldives which previously used to be won by Sri Lankan companies are now done by Chinese firms. And Chinese glass suppliers which got contracts through local firms now get it directly. We also used to export to Kenya and the Seychelles as well as the USA and the UK, not only façade glass but glass for products like coolers.

AG: The Sri Lankan rupee has depreciated sharply against the US dollar and other currencies in recent months. How does the currency volatility affect you?

GURIND: The depreciation of the rupee does affect our raw glass imports. The currency fluctuations have created new uncertainty for businesses; foreign exchange risk. We buy glass for dollars. So the market is not stable and keeps fluctuating but we can’t increase prices from time to time. We find that overnight the import price goes up. Although our import costs go up we can’t recover it by increasing local prices immediately.

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october/november december/january 2015 2014 asianglass

99

Window on

INDIA

Table 1

Table 1 2016 2017 2018 2019

2016 2017 2018 2019

41,161,859 48,295,434 46,232,388 42,894,895

Float glass imports (sq metres)

Table 1 2016 2017 2018 2019

2016 2017 2018 2019

1

asianglass AG 20-4

Float glass exports (sq metres)

Table 1

45,764,432 45,192,787 57,841,065 115,828,483

Float glass exports (sq metres)

74

7,917,791 4,765,623 8,619,199 9,067,076

277,944,532 258,653,332 280,488,075 258,391,577

Total container glass exports (Kg)

1

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Table 1 China Indonesia Iran Malaysia Singapore South Africa Thailand UAE Turkey

5,966,767 8,022,507 1,056,416 10,158,620 6,671,346 2,237,123 4,932,421 1,172,110 935,593

Table 1 Sri Lanka Nepal Malaysia UAE Qatar Mexico Bahrain

Leading float glass import sources (sq metres)

2,170,908 1,727,991 1,585,106 1,452,047 559,452 203,978 168,333

Leading float glass export destinations (sq metres)

Table 1 Table 1 China Sri Lanka Oman Saudi Arabia Thailand Germany Italy

51,892,231 20,545,637 13,656,433 11,532,177 10,843,667 2,129,519 1,892,556

Leading container glass import sources (Kg)

Nepal USA Mexico UAE Zambia Nigeria France Spain Mozambique Italy

37,669,623 22,175,912 19,437,128 16,858,954 16,241,257 11,610,948 9,159,802 9,148,223 7,997,636 7,645,950

Leading container glass export destinations (Kg)

1 1

Table 1

Table 1 2016 2017 2018 2019

2016 2017 2018 2019

1,960,514 1,827,683 2,574,547 2,274,767

Leading container glass export destinations (Kg)

148,021,685 169,491,293 201,063,642 177,949,851

Total glass fibre imports (Kg)

2

76

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1

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Anaylsis

Refractory Zone Fired up for a new normal inspections in a COVID era

…

Free from lockdown, P.Carlo Ratto* picks up the challenge once again, dons the facemask and discusses how carrying out refractory inspections inside glass furnaces is going to change dramatically for some time to come…

There has been no one in the first half and beyond 2020 who has not written, disserted and debated on the topic of the year, Covid-19 and the pandemic that arose. This calamity, in fact, was discussed not only under the obvious medical aspects, but in depth under the economic and sociological implications, until it sadly became the subject of political opposition and the object of election campaigns.

This pandemic, in terms of global spread, people affected and casualties, is probably one of the most important, if not the most important, scourges of the last century. It highlighted and fed on some specific characteristics of the “western” world, also putting in evidence structural weaknesses of the capitalist system based on “liberal” democracies.

Western democracies, in fact, have based their growth on financial efficiency in all sectors, including that of the ability to deal with health emergencies, thus finding themselves mostly unprepared in the face of a not entirely unforeseeable eventuality (considering the history of the last century).

Fuelled by globalization?

The so-called globalization of economies, based on continuous exchanges of goods and people between the main geo-zones, favored the globalization of the epidemic which, unlike other diseases of the past, soon turned into a pandemic.

In the face of this apparently uncontrollable contagion, the only weapon available immediately appeared to be the oldest, namely quarantine and social isolation. The implementation of these drastic measures, however, implying immediate and significant limitations of individual freedoms, have appeared more difficult to implement in liberal democracies, while totalitarian regimes have shown greater effectiveness, efficiency and speed of application; as a consequence, some of the countries considered to be socially more advanced have been and still are among the main victims of the pandemic.

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The long-term effects, which will also extend beyond the health aspects (even this pandemic, like all biological phenomena, having a beginning will have a term in some way), will be the economic ones, which are gradually emerging; our economic systems, in fact, are based on complex and globalized mechanisms, on tense flows of materials, finance and ideas, which can very easily jam even for minor causes, like a tiny grain of sand can stop a complex mechanism of a mechanic clock. The reserves of resources, for reasons of efficiency, are very scarce and therefore it is to be expected that this intense global disturbance will trigger the greatest global economic and financial crisis ever experienced to date.

The long-term outcomes are currently unpredictable and certainly many idealistic concepts, particularly with regard to the globalization of the business, will have to be rediscussed and probably modified.

Going back to what several hope to be “business as usual” will not be easy nor fast and we will have to wait for a drastic solution like a vaccine to be realized, experimented, produced and diffused on a global basis, with all the industrial, medical, distribution, financial and political implications to be resolved.

Until the moment a few billion of human beings will be immunized, long distance air travel will stay partially disrupted and this in several ways will represent an obstacle to maintaining globalized

P. Carlo Ratto economies, since during the unavoidable period of “coexistence” with the nasty virus we will have to see local aggravations and scattered recurrence to lockdown, making much more than in the past unreliable the regime of commercial /productive network that stay at the base of a globalized economy.

It is credible that, at least for a mediumterm period of time, Covid-19 will favor the regionalization of businesses within areas more homogeneous in term of contagion, with manageable local transportations and less cultural barriers.

Given the situation, how could I not consider the effects of this pandemic in my small world of refractories and glass?

As many of those who occasionally read me will have discovered, my professional life is inextricably linked to fused-cast refractories, so I would like to briefly discuss those.

The pre-Covid configuration of this market is well known to glassmakers who are obligatorily customers of these manufacturers. As a result of a long marketing history, a single “western” producer, market leader, holds a majority share, with an obviously global market and a distinctly delocalized production structure, mainly in India and partially in China. Its original production sites, with higher production costs, in Europe

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79

Anaylsis

(France and Italy) are now quantitatively modest, while in Japan production mainly serves regional markets.

The “western” competitors of this market leader (less than a handful of producers), while also distributing products on a global level, and although with a comparable quality profile, do not manage significant production activities delocalized in low-cost areas, and therefore face commercial competitiveness problems against the market leader.

China, as always, is a different story: many producers, with a second-level quality profile, still feed a relatively large internal market, with a still limited footprint in exports, where in many cases they have to rely on technical-commercial intermediaries. The increased production costs in China (labor) and the commercial margins for the intermediaries make the level of profitability plummeting, so limiting the commercial aggressiveness of the Chinese producers in the export market.

Structural reform The sad occurrence of Covid-19 has represented, represents and will represent for a certain future period, a significant change in marketing structures.

In particular, producers with a globalized clientele and production hubs concentrated in low-cost areas are suffering from order management problems, particularly in the testing phase of supplies. The fused-cast refractories, in fact, unlike consumer goods, are made up of semi-durable goods of high value and cost (as glassmakers well know), which require a process of testing and approval of the supply before shipment by the production plant.

This phase cannot be separated from the direct intervention of the Customer or from a professional testing entity commissioned by the Customer, who must operate at the Supplier’s production plant.

The difficulties (often translating into a pragmatic impossibility) to practice long-haul air travel, particularly between countries severely involved in the pandemic, have constituted in the past months, and presumably will constitute for many months to come, a serious obstacle to the testing and approval process of supplies.

In other words, the high level of globalization and delocalization of the productive structure are proving to be a serious problem, while the “regional” model in which a “western” producer (and also a Chinese manufacturer) mainly feeds a regional market within which the circulation of goods and people appears less hindered, it is showing itself less affected by the unpredictable limitations linked to the pandemic.

However, as we well know, it is precisely in times of difficulty that the technical and commercial operators of the market, driven by necessity, discover otherwise unthinkable solutions, which can mitigate the negative consequences of the problem itself and that, in the future perspective, could constitute a

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asianglass AG 20-4

“Covid-19 will favor the regionalization of businesses”

an element of novelty and an alternative operational procedure, with a value beyond the problems that made it necessary to adopt it.

And here we are at the point: just as many employers in times of tight lock-down had to resort to the so-called “smart work” (to then find that regardless of the pandemic this generated interesting organizational opportunities), the subjects involved in the testing procedures of the glass furnaces, have tried hard to develop innovative standard operating procedures (SOP) which, in connection with advanced communication systems, could allow the fulfillment of the control and acceptance function of the fused-cast refractory materials that are pre-assembled in the production plants.

With a limited investment in communication infrastructures and taking advantage of commercial communication platforms available in the Internet, Customers and Inspectors are capable of visually inspect furnaces set-ups actually assembled at the opposite continent, with the aid of a local operator equipped with high definition action-cams, during interactive real time sessions, in spite of evident time-zone mismatch.

Since the level of detail requested to detect structural defects in certain types of fused-cast refractories is difficult to attain during real-time virtual inspection sessions, the exchange of high definition photographs and its elaboration by means of specific procedures has been developed.

The exchange of information relevant to (among other) chemistry, density and nondestructive-testing, operated by manufacturer Quality System and elaborated by Customer and Inspector, is aimed to generating a mass of information that, adequately cross-checked, can lead to a pretty reliable evaluation of a refractory supply.

These types of procedures have already been tested in a number of cases, highlighting that the procedure requires a learning curve so

as to reduce execution times (currently dilated compared to traditional tests), however it is more about efficiency problems, than of efficacy, on which we can be quite confident.

We can therefore say that, despite the limitations on long-distance air travel (due to the pandemic), and despite the problem related to the existence of global production hubs that may be long-distance from the customer, we can solve the problem related to inspect furnaces, adopting a mix of communication technologies and specific operating procedures, reconciling the customer’s need to reliably test the supplies and the manufacturer’s need to ship outside of the factory the approved goods.

All this will be improved and will stay operational for as long the pandemic will pose obstacle to a capacity to travel long-distance.

And, as it is being for the smart-work, is credible that these systems, once optimized with an advance learning-curve, and at the most desired end of pandemic, will not be completely abandoned and maybe will stay viable, for certain inspections less complex, that could be performed “virtually” instead of “in person”, with a green approach of saving money in long distance air travels.

As said, even in the worst circumstances, something good can arise and this truth, I am sure, can also be applied to our small world of glass and refractories, challenging and overcoming our lazy conservatism, allowing us to observe our activities from a different perspective.

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