Casting one’s mind back only as far as two
years ago, the consensus among global flat glass manufacturers,
while not overtly gloomy, was one of concern.
The North American market, in particular, took a battering
– although it can argued that it had been in decline
even before the recession bit in 2008. According to market
research firm Mordor Intelligence, float glass capacity in the
region fell by over 40% between 2005 and 2016. The total number
of operating glass plants in the United States dropped by 14 to
21 over the same period.
This decline in flat glass production lines was initially
attributed to the aftershocks of the global downturn, with
traditional consumers of flat glass, mainly the construction
and automotive industries, were struggling with their own
bottom line woes.
Then, just as it appeared the market was getting back on its
feet, three of the US’ major primary glass
manufacturers were buffeted by a series of unexpected shutdowns
– not to mention a natural disaster –
disrupting supply once more.
As identified in research from Key Media & Research
(KMR), back in February 2017, Pilkington North America, a large
manufacturer of glass for use in buildings and vehicles, saw
its float glass plant in LaSalle County, Illinois, sustain
serious damage at the hands of a tornado.
It remains unclear as to how long the factory was offline
– Pilkington was unable to confirm when approached by
Fastmarkets – but the plant is reported to have
recommenced operations in early 2018.
Elsewhere, Guardian’s Iowa plant was closed in
June the same year due to an explosion, while Vitro
Architectural Glass was forced to suspend operations at its
Pennsylvania factory due to a fire two months
|Despite Trump’s coal
revolution, photovoltaic growth continues unabated in the
But it appears flat glass sales in the US finally rebounded
last year, with major float lines "going back into operation",
according to KMR. Going on the financials of the
market’s biggest manufacturers for 2018, this
appears to be the case.
Vitro reported an 8.1% increase in sales year on year in
2018, underpinned by a 10% uptick in its architectural glass
business. Meanwhile France-based Saint-Gobain also increased
its like-for-like sales in North America – which
represents 13% of the company’s overall revenues
– by 6.2%.
While Japan-based AGC Glass reported its flat glass revenue
to be flat for the North American market in 2018, according to
its most recent financial report, the group is confident both
its sales and profits will mount in 2019. This will be
achieved, it says, by a mix of a reduction in production costs
and productivity improvements (a common theme in most financial
reports for the year).
Pilkington, a subsidiary of the Japan-based NSG Group, is
also bullish about its chances in the region for the year
ahead. According to its latest third-quarter financial report,
the group was aiming for a 3.2% increase in revenue for the
year ending March 31.
US glass suppliers appear to be riding on something of a
wave of optimism – 82% of those surveyed in the
aforementioned KMR report predicted they would boost their
sales once more in 2019 – with nearly half of that
number forecasting a spike of over 10%.
The automotive and construction industries aside,
MarketWatch recently cited "infrastructure development and
reconstruction or renovation of old building projects" as a
major driver in the region’s flat glass
|A backlash against plastic has meant
that people are more likely to buy their
beverages in glass containers – which has led
to a surge in demand for bottles.
Solar powered growth
Increasing demand for photovoltaic modules is another major
contributing factor. US President Donald Trump might be keen to
revive the national coal industry, but this did not stop
Americans installing more than two gigawatts of photovoltaic
solar capacity in the second quarter of 2018, according to a
recent report from Wood Mackenzie Power and Renewables and the
Solar Energy Industries Association. The US is expected to more
than double its solar capacity over the next five years
– something flat glass producers and manufacturers are
anticipating with relish.
It is not just flat glass that is enjoying a renaissance,
either. The glass container industry also appears to be in rude
health. In January, industry body the Glass Packaging Institute
attributed a recent spike in demand for North American glass to
the domestic wine market. In 2018, the market for wine
– especially organic, sustainable and biodynamic
varieties – reached more than $4.3 billion, and is
forecast to grow by more than 14% by 2022.
Manufacturers such as Ardagh Group and California-based
Gallo Glass are seeking to get in on the action. The former
recently reported an increase in wine bottle orders, while the
latter is in the process of updating its facilities to service
the Golden State’s famous wine industry –
which accounts for over 80% of US total vineyard
According to Jim Nordmeyer, vice president for global
sustainability at Owens-Illinois, the world’s
leading glass container manufacturer, "we are clearly seeing a
renewed interest in glass".
"It’s visible on the shelves at the
supermarkets and comes up, over and over again, in our
conversations with customers," he explains. "Glass is well
positioned to capitalize on this interest because it is
healthy, sustainable, and helps build brands. You can feel its
quality in your hand. Consumers and customers alike love
First and foremost, Nordmeyer puts this fresh consumer
demand down to growing trend of premiumization – the
move to make a brand or product appeal to consumers by
accentuating its superior quality and exclusivity. It was
recently deemed by Forbes to be one of the dominant trends in
"Consumers want high-value products, because it means higher
than average price points," he says. "And glass is the best
option for brand building in these high-value products, as it
offers quality and differentiation, through a range of shapes,
colours and textures. A great example is the beer category in
Europe, which is highly differentiated – each brand
has a unique bottle shape, generating strong brand equity."
European glass packaging production in Europe increased by
both 1% in volume (to 10,337 tonnes) and units during the first
half of 2018 year on year, according to recent figures released
by European Container Glass Federation (FEVE). The slight
growth was in line with full-year 2017 data.
"Last year’s production figures show clearly
there is an increasing interest in opting for glass packaging,"
says Michael Delle Selve, a FEVE spokesperson.
"Generally, all food and beverage market segments experienced
a demand growth for glass, and the outlook is very positive
also for the flaconnage sector for perfumery, cosmetics and
The green dollar
Glass’ innate environmental benefits are also
seen as a huge incentive among consumers – especially
in light of society’s move toward greener customs
and government-led incentives around sustainability. Indeed,
"plastics pollution" is said to have been one the most Googled
topics in the United Kingdom last year.
And, as revealed in a recent survey by the Friends of Glass
community, 78% Europeans rate glass as one of their top
choices when it comes to food and beverage packaging.
"The outlook is surely positive for the months to come
because consumers and brands are switching to glass for
environmental reasons," Delle Selve says.
"They want to take an immediate, concrete and easy
engagement to safeguard the environment and choosing glass is a
simple way to do so. They are increasingly aware of the
impact their daily lifestyle can have on the environment.
Sustainability is no longer a buzzword for them. Consumers see
a direct link between their purchasing behaviour and major
environmental issues, and they want to know more about the
products they buy, and the way brands behave."
In March, Owens-Illinois announced a new investment in
Europe to reduce its environmental footprint and meet
customers’ rising demand for sustainable
packaging. This includes plans to funnel more than $60 million
into the expansion of its plant in Gironcourt, France, whose
focus is predominantly on the premium beer segment.
According to the group, the plant, when work is finished in
2020, will help bolster the local circular economy by utilizing
glass and other raw materials from the area.
"Recycling is core to our business," Nordmeyer says. "We are
focused on increasing the use of recycled glass in our
products, furthering our commitment to circular economy
principles. We have also set a goal to increase the level of
post-consumer recycled content in our products up to 50% by
2025. We have already seen some great success in several
countries across Europe where recycled content rates are nearly
For FEVE, the glass sector’s place within the
circular economy is a no-brainer.
"More recycled glass into the loop translates into less
virgin material, less energy, less emissions, less impact on
the environment and less costs," Delle Selve says. "Once
produced, glass is a permanent resource for endless production
loop. But we can’t act on our own on this and will
need to work with partners.
"But we still need to make sure that more and better glass is
collected throughout Europe. Today, seven out of ten bottles
are put back into the bottle-to-bottle loop."
Raw materials squeezed
Returning to the North American float glass sector, there may
be optimism among manufacturers, but it is slightly tempered
by a tight supply of raw materials.
As revealed by Fastmarkets in February, a bottleneck has
emerged in the supply of natural soda ash – a major
ingredient in the production of glass – which has
forced US producers, in turn, to ramp up their sales prices for
the industrial mineral over the last six months.
As of January 31, the monthly price assessment for soda ash,
natural, dense, large contracts, fob Wyoming – the
state supplies 90% of the US’ soda ash –
was $200-230 per tonne.
Major soda ash producers Genesis Alkali, Tata Chemicals and
Solvay have all increased their prices since September 2018,
in the range of $10-15 per tonne. Industrial Minerals
Association - North America was approached to discuss this
pricing trend further, but declined to comment.
Prices for European soda ash – which is largely
synthetic, and comprised of salt and limestone, as opposed to
its US counterpart, which is produced naturally from trona
– are also expected to rise this year.
Largely due to the huge energy outlays involved in producing
the end product, soda ash producers feel they have little
option but to ramp up their contract prices. Nonetheless,
demand from glass manufacturers on the continent remains firm,
particularly in light of the growing consumer trend toward
On a broader scale, according to projections by market
research group Technavio, the global soda ash market could
post a compound annual growth rate of 2% up until 2022. The
glass industry remains the largest end user of soda ash,
accounting for over 50% of its share, as of 2017.
Asia-Pacific’s burgeoning glass-heavy
construction sector is forecast to fuel this growth.
Supply challenges aside, the outlook for the global flat
glass market is largely positive. By the estimates of Market
Study Report, it is set to surpass $130 billion by 2024, with
the usual producers, Guardian, Asahi, GSC, Astro Cam and NSG
Group all expected to remain dominant market
Europe, just like the US, is set to enjoy growth on the back
of the continent’s expanding automotive industry,
with a compound annual growth rate (CAGR) of 5.5% forecast for
the next five years. Germany, Italy and Russia –
sizeable passenger car markets – are expected to lead
There are high hopes for the flat laminated glass segment,
which is poised to see its sales surpass $40 billion by 2024.
Again, this will be spearheaded by the automotive industry
(namely, windshields), as well as skylights in construction.
Flat tempered glass – mainly found in household and
building application – could grow at over
Experts are also betting on the coated glass market, which is
set to hit $24 billion in the same timeframe. This growth is
predominantly based upon the current inclination among
consumers for more aesthetically-pleasing infrastructure
projects, such as airports. Consequently, the market is
expected to take off in countries undergoing significant
infrastructure drives, including China and India.