Glass Industry to touch Rs. 340 billion by 2015: ASSOCHAM
The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has projected the market size of Indian glass industry worth Rs.340 billion by 2015 as against the current estimated at Rs.225 billion primarily fuelled by growth within the real estate sector, infrastructural development, retail sector, automotives sales and food & beverages sector.
Releasing the findings of a recent study, ASSOCHAM secretary general, Mr. D S Rawat said, Indian glass market has been predicted to increase at a compound annual growth rate (CAGR) of 15% over the next three years. The glass consumption growth is expected in construction (10-12 per cent), automotive (20 per cent), consumer goods (15-20 per cent) and pharmaceuticals (15-18 per cent) sectors, adds the ASSOCHAM paper.
The organized sector is dominated by large players like ASAHI Glass India Ltd, Hindustan National Glass & Industries ltd, Piramal Glass, Saint-Gobain India, HSIL, Owen Corning, Triveni Glass, Borosil, Nippon Electric glass, Gujarat Borosil, and Sezal Glass, adds the paper.
The organized sector of the glass industry employs about 30 lakh people directly and also provides indirect employment to about 5 lakh people. On the other hand, the unorganized sector employs around 5-6 lakh people and large number of unskilled workers provide jobs indirectly. It is estimated that the overall glass industry employs more than 40 lakh people, adds the ASSOCHAM paper.
About 70% of the total glass production in the unorganized sector in India is contributed by Firozabad glass industry, which is India’s biggest glass industry cluster with nearly 5-6 lakh people employed directly and plenty more employed indirectly with this sector. The cluster holds a unique position of consisting of Micro, Small and Medium units located at one place and being capable of producing a variety of glass products ranging from art ware, chandeliers to multicolored bangles.
The paper further mentioned that, about 75% of the total glass industries are concentrated in U.P, Maharashtra, Gujarat, Karnataka and Andhra Pradesh. The highest share in the number of factories of the glass industry is Uttar Pradesh with a share of 36.9% followed by Gujarat at 15.0%, Andhra Pradesh and Tamil Nadu at 5.6% and Karnataka with 4.0%. The highest employment in the glass industry is in Gujarat followed by Uttar Pradesh, Maharashtra and Andhra Pradesh.
The glass packaging industry is facing tough competition from alternative medium. But with the key properties such as inertness, transparency, recyclability – glass will overcome the issues of fragility and bulkiness have which will enable the consumer to satisfying there changing needs.
The latest challenge being faced by Indian glass manufacturer is increasing prices of the raw material which is an important component in the process of glass manufacturing. The increase in the price of raw materials is affecting the bottomline of the glass manufacturing companies.
The use of glass is of critical importance in the present day when deteriorating environmental conditions have set alarm bells ringing for protection of environment in the interest of human health and well being. There is an urgent need for preservation and improvement of environment. Increase in use of glass will go a long way in surging ahead towards achieving this objective, highlights the paper.
Mr. Rawat also commented, the government support is required by the glass industry to control the increasing prices of raw materials and regularize the cullet collection system in India which would help the industry to counter the competition from other alternative uses for glass.
The per capita glass consumption in India is 1.2 kg, compared with 8-9 kg in developed countries and 30-35 kg in the US, adds the ASSOCHAM paper. It further highlighted that around 1.3 pounds waste is generated per person per day in India, whereas it is 4.6 pounds in the US. He said glass recycling was very high in developed countries at 70-80 per cent. In Denmark, 98 per cent of bottles are refillable and 98 per cent of those are returned to consumers. However, in India, only 40-45 per cent of the finished products comes for recycling and the rest goes for land filing. Recycling saves 10-20 per cent energy, 30 per cent air pollution and improves furnace efficiency by 20 per cent, adds the paper.
The major export destinations of the glass industry are USA, China, Brazil, Germany etc. The exports of the glass industry have been the highest to US followed by China and Brazil in 2012. The exports to US grew at an average of 18.1% in the period 2005 to 2012. Out of the top 10 countries to which the glass industry exports its goods, the highest growth has been registered in the exports to Malaysia of 48.9% in the period 2005 to 2012, whereas the lowest growth was in the exports to Italy.
The countries from which the glass industry mainly imports are China followed by USA and Germany. The highest imports for the glass industry are made from China and US in 2012. Imports from China account for 48.3% of the total imports of the glass industry. In the period 2005 to 2012, the highest average growth has been recorded in the imports from UAE which grew at 27% followed by imports from US which grew by 22.7% in the same period.
Growth drivers of the Glass Industry:
· Increasing population and per capita expenditure
· Green Building Concept
· Real Estate Sector Boom
· Automotives Industry
· Solar energy glass demand
· Packaging Industry
Challenges faced by the Glass Industry:
· Increasing prices of the raw material
· Facing stiff competition from Chinese Products
· India exhibits low glass consumption in comparison to other countries.
· Growing alternatives of glass has adversely affected the industry.