|The glass-making process starts with raw materials heated to 2,900 degrees Fahrenheit to produce molten glass. Pictured, the molten glass floats on a molten tin bath to become a flat ribbon. Photo courtesy of Guardian Industries.|
The global float glass industry has undergone a dramatic transformation over the last decade in response to a rollercoaster of economic fluctuations and a breakdown of barriers to market entry. Looking ahead, these forces will continue to redefine the world of glass, as shifting markets and new players exert their influence.
For an interactive map of worldwide float glass plant locations and downloadable database of all float listings, visit WorldofGlassMap.com. The site allows users to: search for companies or individual plant locations; sort float plants by company and by location; access website and contact information for float manufacturers; and purchase a subscription for access to the complete database.
About the map: The map and corresponding database features the locations and owners of 210 float glass plants, and 400 float lines, operating around the globe. Only plants that meet Western quality standards have been included in the map. The information was gathered from various resources and through numerous searches. The majority of the information included in the map and database comes directly from the manufacturers. Additional background information on emerging markets was provided by Glass Opts. Care has been taken to provide the latest and most accurate information as of November 2015; however, due to the everchanging nature of the industry, some information may have been omitted inadvertently. Please help maintain and update the database by providing updates and information about float-glass plant construction and ownership through the WorldofGlassMap.com website, or by contacting Editor Katy Devlin, email@example.com.
Taking stock of mature markets
As economies in established float production markets plummeted during the Great Recession, mature glass markets experienced steep capacity reductions. The North American float glass industry went from 44 working glass lines in 37 plants to 34 lines in 25 plants between 2005 and 2015. In the United States alone, the number of glass plants fell from 35 to 21 during the 10-year span. Canada, which had two operating float plants in 2005, no longer has float production.
Several countries in Western Europe also witnessed a reduction in capacity from 2005 to 2015. The single plant in Finland closed; Belgium went from six plants to two; Italy from seven to five; Spain from six to five; and the United Kingdom from four to three. The European float glass market has still “not recovered,” says Patrick Dupin, president of the flat glass business for Saint-Gobain. “The level of activity currently is far below what it was in 2008,” he reports.
The financial crisis created “a lot of rationalization around the globe,” says Stephen Weidner, vice president at the NSG Group. “This was not just in float glass—all industrial companies were hit pretty hard. In float, there was a lot of rationalization, constriction of supply. Capacity was taken out of the system in many parts of the world.”
An outlier in the mature glass production markets is Japan, home to two of the world’s largest glassmakers, NSG and Asahi Glass Co. While demand in the country stalled during the last decade—rising from about $6 billion in 2003 to $7.1 billion in 2008, and falling to $6.8 billion in 2013, according to the World Flat Glass market report from The Freedonia Group Inc.—float capacity remained relatively unchanged.
Meanwhile, the Chinese glass industry experienced incredible—and some say unsustainable—growth beginning in the early 2000s. At press time, there were at least 64 Chinese float plants and 125 float lines in operation that met Western quality standards. In 2005, there were 25 plants of Western float quality.
According to the World Flat Glass market report, China captured 48 percent of worldwide demand for flat glass on a square meter basis in 2013. That is expected to grow to 52 percent in 2018.
“Demand for flat glass traditionally has been concentrated in North America, Western Europe and Japan, but over the last two decades, China has emerged as the world’s largest national market for flat glass on both a volume and a value basis,” according to the report.
The pace of growth in China has created an overcapacity situation in the country, according to several manufacturers.
“We have seen a tremendous number of float closures as the whole Chinese market has slowed down,” Weidner says.
The overcapacity situation stems from the rapid growth in float production during the early 2000s. Many of the float plants built by local, midsized glass manufacturers were not designed to meet Western production or environmental standards, sources say. These represent many of the plants that are currently being shuttered. “The local authorities will probably not let those floats operate for another 10 years,” Dupin says.
Many of the plants left operating in the country are high-quality production facilities. And, several industry sources speculate that any future plants will also be required to meet more stringent quality and environmental standards.
“Those [plants] that will be rebuilt will be sophisticated float lines. It will change the face of the Chinese market,” Dupin says.
A bright light for many glass manufacturers during the recession and its aftermath has been expansion of emerging markets, particularly the BRIC countries (Brazil, Russia, India and China). From 2005 to today, Brazil added one float plant, bringing its total to six; Russia went from two plants to eight; and India increased its total from four to seven.
Growth also picked up in other emerging markets, as demand for glass increased in Asia, Africa, the Middle East and South America. Six countries launched float operations for the first time between 2005 and today: Algeria, Kyrgyzstan, Malaysia, Syria, Ukraine and Vietnam.
“We have seen demand from companies wanting to build floats in Africa, and in countries such as Thailand. They want to partner with us,” Dupin says.
South America remained fairly strong during the downturn, adds Weidner. “South America did not see the same capacity reduction as other markets. They were still chugging along while other parts of the world were struggling,” he says.
Freedonia projects growth in demand for flat glass in emerging markets through 2023. However, industry sources report a recent slowdown in several key countries due to economic and political uncertainty. This has been particularly the case in Russia and in South American countries.
“Russia is suffering a lot, while the United States is gaining momentum. This is the opposite of what it was five years ago,” says Serge Martin, vice president of marketing for AGC Glass Company North America.
“In South America, the glass industry is being dramatically affected by political uncertainty,” Weidner says. Manufacturers report that these fluctuations are expected in emerging markets. “Those markets have higher volatility, but where there is risk, there is reward,” Martin says. “Russia has been rewarding for several years.”
|After floating on a molten tin bath, the glass ribbon is transferred on transport rollers into a controlled cooling tunnel that is over 100 meters long. During this process, the glass cools from a temperature of 600 degrees Celsius (about 1,100 degrees Fahrenheit) at the beginning of the stage to room temperature at the end of the stage. Photo by Saint-Gobain.|
In addition to emerging markets, the global float glass industry has also witnessed an influx of new companies. Consider, the original World of Glass map published by Glass Magazine in 2005 included plants from fewer than 30 manufacturers; the updated map (on Page 25) contains plants from nearly 70.
“Our industry was represented by a handful of companies—the old guard— for years,” says NSG’s Weidner. “Now there are new faces in the industry.”
In the North American glass industry, for example, two new players have entered the float market. Guardian Industries, one of four global float leaders, sold a large stake in the company to KGCI LLC, a subsidiary of Wichita, Kansas-based Koch Industries Inc.
Additionally, Fuyao Glass Industries, which has proven itself as a float and automotive glass leader in China in recent decades, purchased the Mount Zion, Illinois, float plant from PPG Industries in 2014. Through its subsidiary Fuyao North America, the company has been rebuilding both float lines at the facility, and operations are expected to come on line in the near future.
Internationally, many smaller glass companies entered the float glass industry for the first time, particularly in emerging markets. Driving this was the introduction of new production technology that reduced initial startup costs, sources say.
“Being in the float business is not what it was 10 or 15 years ago,” says AGC’s Martin. “The technology is more widely available. The barrier to entry into the industry is no longer there to the same extent.”
“Previously, [float glass production] was reserved for big companies that mastered the technology and had the financial means to carry on the capitalintensive business. In the last 10 or 15 years, we have seen a lot of small players emerging in the industry,” adds Dupin. “Key to this was the introduction of turnkey technology.”
While many of the “old guard” manufacturers—AGC, Guardian, NSG and Saint-Gobain—continued to expand their presence geographically during the last decade, the majority of new plants that popped up were built by these smaller, regional manufacturers. Of China’s 64 plants, for example, only 10 are operated by one of the four global float leaders. And seven of those 10 are joint-venture operations with local manufacturers.
Economically, manufacturers say they anticipate expansion in several markets in the coming decades, beginning with the rebounding North American market.
“The tightening supply of float glass in North America shows that a mature market, even though it suffered a loss in the recession, can still have a promising future,” says Martin.
“North America is the strongest of the global economies. Today in North America, our three primary markets— automotive, residential and commercial— are doing relatively well,” adds Weidner. “We expect to see incremental float capacity added. There is already tight supply of capacity in North America. The market is ready to see capacity expansion—the questions are who, where and when. We expect to hear about expansion in the short term.”
Emerging markets will also offer opportunities, though not the emerging markets of five years ago. Manufacturers expect China, Russia and countries in South America to remain slow, as the economies in those regions struggle. However, other markets are primed for growth.
Dupin says he sees three areas of great potential in these markets. First, in Asia—specifically India. “This is where the market is growing today. Capacity today is below demand, and the demand will increase. They are currently getting their glass from afar. India currently does not have a high rate of glass consumption per capita. However, it will progressively move in that direction,” he says.
The second region with growth potential is Africa. “This market will start emerging. Demand is at a low level today, but [African countries] are underequipped. There are only three architectural float glass lines in Africa. Two are in Egypt (one is Saint-Gobain); one is in South Africa. This market will grow fast,” Dupin says.
The third growth region is the Middle East. “The rate of construction is very high,” Dupin says. “This might be impacted in the future by the oil crisis. However, we haven’t seen any slowing so far. This is where the growth will take place.”
Despite the ebbs and flows of the global glass industry and its regional economics, manufacturers report overall optimism. Glass continues to grow in popularity around the world, particularly as the industry develops better performing products.
As AGC’s Marin says, “We will always be building with glass. There will always be business.”