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Country profi le: Pakistan
Pakistan has performed better than its peers in the region on multiple fronts in the last 12 months. The country didn’t suffer as much as some of the other countries in the region due to Covid-19. Glass International presents an overview of the container and fl at glass in the country.
Comprising of fi ve major glass producers (three container glass and two fl oat glass producers) the Pakistani glass industry has posted more than average growth rates in the last four years. However, despite the mammoth size of the country’s population (estimated at 220 million at the end of 2020), glass industry in the country has not been able to achieve a higher scale of capacity and output. Per capita consumption of container and fl at glass in the country is low compared to other countries in the region.
Total installed capacity of glass containers is about 1,200 tonnes per day. For fl at glass the installed capacity is 2,050 tonnes per day. Out of the 1,200 tonnes container glass capacity, nearly 30% is not operational as one of the container glass’s (Balochistan Glass) two production units are currently not operational.
Non-alcoholic beverages, food and pharma packaging dominate the container glass consumption in the country.
Alcoholic beverages account for a mere 7% of container glass consumption in Pakistan. Demand of container glass for the alcoholic beverage subsegment is met by the glass division of Murree Brewery (Murree Glass).
There has not been any major investment in the container glass sub-segment in recent years due to subdued demand.
Import of container and fl at glass from China and Iran has also been a major obstacle for the growth of domestic glass industry. Both the countries export about 20% of the total glass demand in Pakistan.
Healthy economic indicators
Healthy economic indicators point to good growth prospects for Pakistani container and fl at glass to achieve steady growth rates in the forthcoming fi nancial year. Pakistan’s government has set a 4.8% GDP growth target for the fi nancial year starting on July 1st.
For the fi nancial year ending on 30th June, 2021, Pakistan has said it is on course to achieve 3.94% GDP - more than double the IMF’s view and roughly triple the World Bank’s projection. The IMF is estimating GDP growth for 2020/21 at 1.5%, while the World Bank puts the expected expansion at 1.3%.
Ratings agency Fitch said Pakistan’s economy appeared to have weathered the pandemic shock well relative to its peers. It said provisional data pointed to GDP growth of 3.9% in the current
fi nancial year, after a contraction of 0.5% last year.
The overall industrial sector has witnessed a positive growth of 3.57 % in the current fi scal year as against a negative growth of 3.77 % last year. The large-scale manufacturing (LSM) sector, which is driven primarily by QIM data (from July 2020 to March 2021), showed an unprecedented growth of 9.29 %. Among major glass consumers, food beverage & tobacco (11.73 %), pharmaceuticals (12.57 %) and automotive sector grew by 23.38 %.
Flat glass consumption was spurred by construction activities, which has increased by 8.34 % mainly due to an increase in general government expenditure and private sector construction-related expenditures.
Flat glass growth
The fl at glass industry will be the key driver of overall glass industry in Pakistan in future. Covid 19 had a major impact on Pakistani economy between March and June 2020. To counter the dwindling economy, the government announced a PKR 100 billion relief package for the construction industry in April 2020
Although formally, on average, the construction sector has contributed between 2.3% and 2.85% in the last fi ve fi scal years to Pakistan’s GDP (it was valued at PKR 316 billion in the Pakistan Economic Survey 2019-20), most economists estimate its value signifi cantly higher in the total GDP.
The package’s objectives are two-fold. The fi rst is to bridge the affordable housing gap through the Naya Pakistan Housing Program (NPHP) which was initiated in April 2019 with the goal of building fi ve million houses in fi ve years. To ensure these goals are met, the government set up the National Committee on Housing Construction and Development (NCHCD) in July. The Committee’s objectives include monitoring the construction sector and ensuring that any hurdles that arise are overcome to ensure that construction activities continue to increase rapidly.
Glass Manufacturers
Ghani Glass
Ghani Glass is the largest glass producing company in terms of sales revenue. The company operates in both the major sub-segments- container and fl oat glass. Ghani Glass operates four glass plants in the country ( Plant 1 at Haripur Taxila Road, District Haripur; plant 2 at Landhi Industrial Area, Karachi; plant 3 at Lahore Sheikupura Road, District Sheikupura; and plant at Lahore Gujranwala road, Tehsil Kamonke, District Gujrawala).
Sales revenue of Ghani Glass grew more than 14 % in the fi rst nine months ( July 2020- March 2021) of the current fi nancial year. The company achieved sales revenue of PKR 16,178 million compared to sales revenue of PKR 14,159 during the same period in 2019-20. Both sub-segments contributed almost equally to the increase in sales revenue.
Tariq Glass
Tariq Glass made its name in Pakistani glass industry as a glass tableware producer. In 2013 it entered into fl oat glass production and eight years later, is the largest fl oat glass producer in the country. It commenced commercial production from its second fl oat glass line in April 2021 to become the largest fl oat glass producer in Pakistan. The company has an installed capacity of 1,050 tonnes of fl oat glass products from two production lines.
The company is also the largest tableware glass producer in the country with a production capacity of nearly 300 tonnes per day of tableware glass. The company produces its tableware products on single and double gob press machines as well as H-28 (press & blow) and stretch machines. The company has an onsite mould workshop, modern warehousing, advanced laboratory and Tecno 5 decorating machines at its production facility.
During the fi rst nine months ( July 2020- March 2021) of the current fi nancial year 2020-21, Tariq Glass registered a robust growth of 23.61%, with sales revenue of PKR 14,059 million as compared to PKR 11,374 million of the corresponding period of the last year.
According to company’s management: “With the induction of added production from the fl oat glass plant unit II, wide-variety of fl oat glass products will be available not only in clear and coloured fl oat glass (i.e., green, blue, bronze), mirror and refl ective glass but also the fl oat glass of
varied thicknesses in the range of 2 mm to 12 mm will be available for the customers. The availability of effective sales mix will ultimately result in higher sales and further improved profitability of the company.”
Balochistan Glass
About a decade ago, Balochistan Glass was the largest glass producer in Pakistan. The company has three production plants (Unit –I at district Lasbella, Balochistan, Unit- II at Sheikhupura Road, Sheikhupura and Unit III at Kot Abdul Malik, Lahore). Until 2018, Unit I was a glass tableware production facilty, while unit number II and III were container glass facilities. In a rejig in that year, the company shifted tableware glass production to unit III and container glass production to unit I and II. Currently, unit I and II are not operational.
The company underwent an expansion at Unit – III (second furnace for tableware glass). The refurbished furnace was fired successfully on 23rd June. In the light of enhanced production capacity, the management is continuously exploring further market options and making concerted efforts to increase its share in local market and tape the promotional opportunities in the international market. The company has also made strategic decision to introduce another brand with completely new range of tableware glass products.
After a gap of many years, Balochistan finally registered profits during the first nine months of the current financial year. Though, total sales of the company declined during these nine months as compared to the same period last years. Major reason behind the declined sales was suspension of the operations at Units I & Unit II. Sales revenue during the first nine months of the current financial year stood at PKR 953 million as compared to sales revenue of PKR 1,265 million during the same period in the last financial year.
Murree Glass
Murree Glass is the container glass division of the only brewery in the country, Murree Brewery. With an installed capacity of about 160 tonnes per day, Murree Glass meets the entire demand of Murree Brewery and Tops Food, a subsidiary of Murree Brewery.
During the first nine months of the current financial year, Murree Glass’s output declined by more than 14 % ( 33,551 tonnes in 2020-21 from 39,454 tonnes in 2019-20) as compared to the same period in the financial year 2019-20. �
https://www.ghaniglass.com/ https://www.tariqglass.com/ https://www.balochistanglass.com/
