Indian overview Container sector still strong

Strength in Indian Container Glass Industry

The Indian container glass industry has seen a number of important developments in the last three years. Along with a $1 billion acquisition of Piramal Glass by Blackstone Group recently, the Indian industry has added signifi cant capacity. Glass International presents an overview of the sector.

Thanks to the increased income levels, changing lifestyles, rising population, and growth in the economy, the demand for glass packaging is growing in India.

Considerable investments in the beverages, food processing, personal care, and pharmaceuticals end-user industries have created huge opportunities for container glass industry in the country. The Indian container glass industry has been dominated by three large glass producers - Hindustan National Glass Limited (HNGL), AGI Glasspac and Piramal Glass (now PGP Glass) - for more than a decade. In recent years several mid and small sized container glass producers have started to make an impact.

These smaller producer have gained market share in their respective regions. Some of these producers have added new furnaces and modernised to cater to the high quality demands of glass containers from different sub-segments.

The Indian container glass industry has an installed capacity of nearly 14,000 tonnes per day (excluding pharmaceutical sub-segment). There are nearly 27 large, mid and small-sized container glass producers. HNGL, the largest container glass company in the country has a pan India presence with seven production plants. AGI Glasspac has two production plants in the state of Telangana. PGP Glass has two plants in the state of Gujarat.

In addition to PGP Glass the state has container glass production units of Pragati Glass, Haldyn Glass, Haldyn Heinz Glass, Gerreishimer and Schott Glass. The state accounts for nearly 30% of the total container glass production in the country.

Alcoholic beverages are the largest sub-segment for container glass consumption on a volume basis, followed by food, pharmaceutical glass and cosmetics & perfumery in that order.

Alcoholic beverages will spur Indian container glass industry

Current low per capita consumption of alcoholic beverages in India, increasing consumption, rapidly increasing disposable income and container glass dominanace in this sub-segment is a big positive for Indian producers. This subsegment is expected to keep a healthy growth momentum for the foreseeable future. The alcoholic beverage market in India is divided into different segments such as country liquor, Indian Made Foreign Liquor (IMFL), beer, and imported liquor. According to IWSR Drinks Market Analysis, a London-based research fi rm, India is the world’s ninth-largest consumer of all alcohol by volume.

After China, it is the second largest consumer of spirits (whiskey, vodka, gin, rum, tequila, liqueurs). India consumed more than 663 million litres of alcohol in the year 2019, up 11% from 2017. Per-capita consumption is rising. India consumes

more whiskey than any other country in the world – about three times more than the US, which is the next biggest consumer. Nearly one in every two bottles of whiskey bought around the world is now sold in India.

According to Rajesh Khosla, CEO of AGI Glasspac, second largest container glass producer in India on the basis of installed capacity: “The growth in the container glass and packaging industry is directly proportional to the growth in the economy which we are going to see and we hope that on a conservative side, it will be something around 10% to 11% and on an upper side it can go up to even 15%, because the way the projection has come from IMF some time back where India is supposed to grow at 11.5% in the year 2021. So we can expect on upward trend of 15% also if everything goes well with the numbers which has been projected by IMF, otherwise, on the lower side it can be around 10%.”

Pharmaceutical glass

The Covid-19 pandemic has made pharmaceutical glass sub-segment one of the most keenly watched sub-segments in the last 12 months. Though, in India, investments in pharmaceutical glass production has started to pour in much before the onset of the Covid-19 pandemic.

Along with Indian pharmaceutical glass producers, MNC pharmaceutical glass producers have invested in enhancing the designed capacity in last three years. Leading global pharmaceutical glass producers Gerresheimer, SGD Pharma and Schott have invested capital in Indian operations in last three years.

Khasim Saheb, MD Primary Packaging Glass India, Gerresheimer, said: “Gerresheimer India had tripled its capacity of tubular glass by end of 2020 and is doubling its capacity of moulded vials by end of 2021. We are also making strategic investments in adding capacities in terms of equipment and technology. 2ml Type I tubular glass vials, 3ml moulded vials are most favoured for vaccines currently, but moulded glass Type I vials are also used, especially for multi-dose vaccines.

“Multidose vaccinations with 10ml, 20ml, 30ml and 50ml moulded vials can be an immediate solution in case of a shortage of vials. We have suffi cient capacity of moulded glass Type1 vials available too.”

In India, Gerresheimer manufactures clear and amber glass infusion and injection bottles from type I borosilicate glass. The company also produces type III glass containers for a large number of medications.

In what could become a big boom for Indian pharmaceutical glass producers, the Indian government has approved a production-linked incentive (PLI) scheme for the pharmaceutical sector, entailing an outlay of $2.12 billion. The Union Cabinet, chaired by Indian Prime Minister Narendra Modi, approved the scheme which will benefi t domestic manufacturers, help create employment and is expected to contribute to the availability of a wider range of affordable medicines for consumers.

The duration of the scheme would be from 2020-21 to 2028-29 and is expected to promote the production of high value products in the country and increase the value addition in exports.

� Table 1. Leading container glass producers in India.

Company

Hindutsan National Glass Limited (HNGL)

AGI glasspac

Piramal Glass

Can Pack India Sunrise Glass Haldyn Glass Limited Pragati Glass

Location

Rishra Bahadurgarh Nasik Naidupeta Virbhadra Puducherry Neemrana

Hyderabad Bhongir

Jambasur Kosamba Aurangabad Surat Vadodra Kosamba, Gujarat

Designed Production Capacity

860 TPD 980 TPD 650 TPD 460 TPD 330 TPD 180 TPD 840 TPD

650 TPD 950 TPD

540 TPD 440 TPD 860 TPD 620 TPD 320 TPD 170 TPD

Acquisition

Piramal Glass, India’s third largest container glass producer was acquired by US-based private equity major Blackstone Group for $1 billion. The transaction comprises an upfront payment of USD 850 million to take over the management and ownership of Piramal Glass, whereas, the Piramal Group will get about $150 million on realising certain milestones, to be paid over the course of two years. At an enterprise valuation of about $1 billion, this deal is the largest ever transaction for a packaging company in India.

In February 2021, the acquisition received a nod from the industry watchdog Competition Commission of India ( CCI).

During the last two years, Piramal Glass has invested in upgrading its production facilities. It has also invested heavily in information technology to streamline the production and operations at four different locations.

According to Vijay Shah, Vice- Chairman of Piramal Glass: “With the exponential evolution of technology, the advent of digital technologies, big-data and advanced analytics, along with Artifi cial Intelligence (AI), the global business and market dynamics is fast shifting. The rapidly changing external environment – omni present devices, millennials joining the workforce, and new-age technologies- all leading to massive changes in customer expectations. The recent uptake in the adoption of digital technologies driven by the pandemic will continue into the post Covid-19 era. While the manufacturing

industry has traditionally been slower in adopting new technologies, at Piramal Glass, we are swiftly embracing new paradigm and pioneering digital transformation in the glass packaging manufacturing sector.

“Today, we are strongly focusing on building Digital and Analytics (DnA) capability, to transform every aspect of our business including people, core and supporting business processes such as manufacturing, supply chain, quality, health safety & environment, and customer experience (CX), to become a more responsive organisation to the rapidly changing global business environment.

“To do this, we have redesigned the organisation structure, set-up a dedicated DnA team, onboarded global specialists, and made substantial investments in digital technologies, tools, widescale hands on training and change management.”

AGI Glaspac to install a new plant

AGI Glaspac is setting up a greenfield container glass facility at Bhongir in the state of Telangana.

AGI Glasspac has partnered with Horn Glass Industries to build this furnace. The facility will comprise end-fired furnaces with six forehearths for production. Upon completion of the new furnace, it will produce 154 tonnes of premium flint and other different colours. The speciality glass will cater to industries such as carbonated water, sparkling wine, pharma, including vials and in cosmetics, such as beauty products, perfumery, nail polish and others. This furnace is expected to commence commercial production by June 2022.

Rajesh Khosla, President & CEO of AGI glaspac, in a statement, said: “Our investment in German technology is aimed to strengthen our units to make products more efficiently out of India for global markets. We have found the right technology partner in Horn Glass Industries.”

Stephan Meindl, President & CEO, Horn Glass Industries, said: “India is an exciting market for our company, and we are happy to collaborate with AGI glaspac to showcase our leading position in the global glass market. Our technological support AGI glaspac’s will be able to thrive by its make in India vision of manufacturing world-class level speciality glass very effectively.”

Sunrise Glass

Surat, Gujarat-based Sunrise Glass, a mid-sized container glass producer has added a new furnace with a designed capacity of 240 tonnes per day. Prior to this furnace, the company was operating two furnaces with a designed capacity of 380 tonnes per day. The new furnace will take Sunrise Glass’s overall designed capacity to 620 tonnes per day and will make it the fifth largest container glass producer in the country.

Sunrise Glass’s Executive Director, Gaurav Thakkar explained: “The new furnace will have four lines with three AIS 10 triple gob (TG) Emhart Machines. All the lines will have EVM (Inspection Machines) and along with this we have installed an automatic cullet sorting plant that has been imported from Austria.

“The container glass plant was expected to start in November 2020 but it got delayed due to Covid. We will commence the commercial operations by April 2021.”

Sheet glass producer ventures into container glass production

Emerge Glass India Private Limited (EGIPL), previously known as Emerging Glass India Private Limited entered container glass production in March 2021. The company installed a furnace with a designed capacity of 210 tonnes per day at Behror in the state of Rajasthan. Hitherto, the company was previously into sheet glass production.

Sumit Gupta, Managing Director of Emerge Glass, said: “We have decided to venture into container glass production. We will cater to the premium end of the container glass packaging in food and liquor segments.

“Our priority would be the liquor business, which has grown immensely in the last few years. We realised there is a gap between demand and supply and high quality glass containers in Indian market and liquor and food producers have to import these glass containers from foreign sources.” �