glasstec 2012 sheds light on global market conditions
The glass technology live pavilion at glasstec proved that the economic recession has not stalled innovation in the industry. The area offered a display of cutting-edge technologies, along with presentations from experts in the industry. Officials from the Stuttgart University's Institute of Construction Design, under the leadership of Prof. Stefan Behling, organized the pavilion. With the topic "Innovative Glass Functions", the glass technology live area featured products such as a window incorporated into glazing without any visible frame construction; bent but still stable glass; organic, building-integrated photovoltaics; as well as large-format façade elements. View a photo gallery of the glass technology live pavilion at www.glassmagazine.com. Photo by Messe Düsseldorf.
The glass industry faces notable challenges in the worldwide environment, as it contends with overcapacity issues, potential threats from codes and standards, and economic uncertainty, according to attendees at glasstec 2012. Yet despite these challenges, industry executives say there are significant opportunities for companies that focus on value-added product development and educating users about the performance potential of glass.
Global overcapacity issues stem from a lack of demand, said Guardian Glass Group President Scott Thomsen during a Glass Performance Days press conference at glasstec. "Eighty float lines were taken out of the system in the last 12 months," he said.
Examples include AGC Glass Company North America, which announced at press time that it would cease production of photovoltaic cover glass in the North American market and indefinitely close its Kingsport, Tenn., manufacturing facility. AGNA cited the sluggish economy, slowed customer demand, and strong imports of solar glass and finished solar modules as the reasons behind the decision.
The NSG Group, also pointed to decreased demand when it announced earlier this year that it would idle one of two lines at its Laurinburg, N.C., facility, in addition to putting its float furnace at Port Marghera, Venice, Italy, on "hot-hold" and postponing the restart of a float line in Gladbeck, Germany.
"[At glasstec] I spoke to one European veteran of glass recessions past, who listed the 12 most recent European float plants in cold shut down or on hot-hold," said Nicole Harris, Glass Magazine publisher, in a recent blog. "A hot-hold, or slow production/under repair facility, is these days likely to become a cold and permanent shut down. All the float glass manufacturers—AGC/Glaverbel, Guardian, NSG/Pilkington and Saint-Gobain—are affected," she said.
According to Thomsen, "Massive consolidation in the industry will continue if we can't figure out how to grow value throughout the chain. There is a lack of demand, and we are at a pivotal point where every member of the value chain has to consider how to bring a product to market, and how to sustain a business."
The industry should focus on innovation and adding value to glass products, he said. "The days of clear float glass are behind us. We need to make the entire industry more valuable."
At the company level, Guardian Industries is entering a new phase of "creative destruction," Thomsen said. The manufacturer will replace products every two years, "constantly obsoleting products," he said. Products on the horizon include vacuum insulated glazing and insulating glass units with an R-12 thermal insulation value. "Alternative building materials provide better insulation and have a competitive advantage. The whole industry can work together to grow the window-to-wall ratio—it helps the whole value chain," he said.
Going hand-in-hand with value-added product development is the need to continually educate the code community―and end users―on the advantages glass brings to the table.
"All-glass facades drive higher lease rates, which is very important for building owners. This good solution, however, is under threat, as there are various groups in the building industry arguing for lower window-to-wall ratios," said Kelly Schuller, president of Viracon, at the GPD press conference.
"We need to do a better job of promoting mainstream, proven technologies that are durable and help drive performance. Those are the things that keep an all-glass façade viable for commercial building owners," Schuller said. Glass options such as coatings, silkscreens and triple glazing are mainstream products in the industry, but still used on relatively few buildings, he said.
Thomsen agreed that this education, for both architects as well as other players in the glass industry, is crucial. "We go to architects and call on glaziers. You have to create demand for a product," he said.
"If you want to launch new products every year, everyone in the value chain has to be ready and prepared. You need every member to focus on initiative and innovation."
Massimo Rebolini, EMEA commercial manager for Dow Corning reinforced that the glass industry needs to increase promotion of its advanced glazing solutions. "Think of a 1-inch vacuum insulating panel. That will provide the same insulation as a 25-centimeter composite product," he said.
Additionally, Rebolini advised that companies continue to focus on product energy performance as the key driver in the building industry.
"High performance building construction has seen double-digit growth in the last 10 years. We are increasingly seeing the building industry take a holistic approach to green building," Rebolini said. This holistic model requires that every component of the building be carefully considered, and the glass industry needs to offer products that help improve whole-building performance.
Europe vs. North America
On the economic front, the European market is slowing, but the outlook for North America is a bit brighter, according to glasstec attendees.
"We've seen the European slowdown, the 'pain in Spain' and the brick countries are cooling," Thomsen said.
"The markets in [Europe, the Middle East and Africa] are quite erratic," Rebolini reported. "EMEA looks at 60 different cultures and countries." Although demand in the Middle East and Turkey can be quite high, demand has been slowing in Northern Europe, he said.
While the United States' economy continues to "bump along the bottom," according to Thomsen, the outlook among many glasstec attendees and exhibitors for North America remained positive.
On the show floor, Paul Witherby, business development manager for Klein USA Inc. said several North American markets are showing particular promise. "Toronto is hot. I heard that there are currently 150 cranes in the sky there. Comparatively, during the peak of the economy in Miami, there were 60 cranes," Witherby said. "We're also seeing a lot of activity on the East Coast: New York, D.C., Philadelphia." Witherby said he expects the U.S. market to ramp up further after the election.
"The U.S. market is very much alive," said Shlomit Niva Tevet, director of marketing for DipTech. "We're seeing a growing demand for glass printing solutions. It's a good sign in general, and for the U.S. construction market in particular."
"Germany is still strong, and North America is waking up," added Tom Bechill, sales manager for HEGLA Corp.
Looking at the overall construction market in the United States, Schuller said he expects slight growth in the coming year.
"In the United States, institutional, commercial and industrial have been growing fastest," he reported at the GPD press conference. "Private construction will be bigger next year. We have been riding institutional for two years, and that is fading."