Bhuvaraghamurthy Santhanam

President, Flat Glass, South Asia
February 1, 2007
COMMERCIAL

Managing director, Saint-Gobain Glass India, Sriperumbudur,

Tamil Nadu

 

Chairman, All India Flat Glass Manufacturers’ Association,

New Delhi

 

What kind of glass does the Indian flat glass industry produce?

The flat-glass industry in India consists of both sheet and float-glass manufacturers. The first float-glass plant started production in 1993; since then, there have been significant investments in float-glass plants. Today, sheet glass is about one-eighth of the market.

 

Who are the major players in float glass? Where are the plants?

Gujarat Guardian Ltd., located in the Bharuch district of Gujarat, was the first float-glass company to be set up in India in 1993. It was a joint venture between Guardian Industries International Corp. of the United States and India’s Modi Group.

 

Asahi India Glass Ltd., located at Taloja near Mumbai, started operations in December 1994.  It started off as a joint venture between the Tatas and Asahis of Japan. With the exit of the Asahis in 2003, it was taken over by Asahi India Safety, the automotive glass manufacturing company. The merged entity is known as Asahi India Glass Ltd. The company started a new float plant with a 750-ton capacity Jan. 1 at Uttaranchal in North India.

 

Triveni Glass Ltd. in Allahabad started operations in March 1996. It’s a mini float plant based on Chinese float-glass technology.

 

Saint-Gobain Glass India Ltd. has two plants at Sriperumbudur, near Chennai. It started operations in 2000 and is India’s largest capacity float plant. It is a 100 percent subsidiary of the Saint-Gobain Group.

 

What quality standards does the industry adhere to?

The float glass made in India is of international quality, as is evident in the large quantum of exports.

 

How much progress has the flat glass industry made in the past five years?

The flat-glass industry grew by about 80 percent between the year 2000 and 2006, resulting in a compound annual growth rate of 10.1 percent. The per capita consumption of glass, which was 0.41 kilogram in 1999, has reached 0.76 kg in 2006, a figure that is still low when compared to other countries. The enthusiasm shown by architects toward glass usage has contributed to the growth of the glass industry, particularly in segments like IT/ITes [Information technology/ Information technology enabled services], the hospitality sector, malls and commercial development.

 

How is the processed glass market in India?

In India, most of the glass usage is in the raw form, but processing has grown very fast in the recent past. Glass processing for automotive purposes has always been there in India. Recently, the architectural processing segment is the one that’s growing faster.

 

What kind of investment has the industry seen in the past?

In the past 15 years, the industry saw investments totaling Rs. 2,100 crores [$4.7 million] in raw-glass manufacturing and architectural-glass processing, primarily in the horizontal tempering process. The number of architectural tempering lines in the country has grown from three in the year 1998 to more than 49 by the end of 2006.

 

There are several proposals for new investments in the industry. Saint-Gobain’s new plant started operations in December 2005. Asahi’s new plant at Uttaranchal started production Jan. 1. There are other proposals under consideration. In the processed glass industry also there are many proposals for new investments.

 

What is the current capacity versus demand in India?

An excess capacity of raw glass in the industry was expected [beginning in] 2006. This excess capacity could become larger in the years to come if current investment plans see the light of day. In 2007, the excess capacity could be four times that of 2006, and in 2008 it could be six times that of 2006. This is assuming demand continues to grow at the current double-digit pace. It is interesting to note that the cumulative profit of flat-glass manufacturers in India is still in the red.

 

It is also predicted that there will be an excess capacity of processed glass. Currently, there are 49 horizontal tempering lines, compared to 12 in 2003 and three in 1998. The capacity utilization of the processed glass industry, which had 40 processing lines as of 2005, is estimated to be less than 40 percent. With continued investments, the competition could increase. About 100 processing lines are estimated to be [online] by 2009.

 

Are exports an option?

Recently, there has been a spurt of new capacities commissioned and announced in this part of the world; Iran, UAE, Bangladesh and Pakistan are part of this trend. While there are many markets across the world, nearby markets do seem to have excess capacity.

 

What other challenges does the industry face?

The glass industry is also weighed down by the spiraling cost of manufacturing. Energy costs are increasing, as  are raw material and infrastructure costs.

The regulatory framework-building codes for safety, energy codes, etc.- in India needs to keep pace with industry growth and new glass usages.

 

What will the industry look like in coming years?

The Indian glass industry is at an inflection point. The opportunities for the industry are a sound economy, good market growth and increasing investments. The challenges are excess capacity and increased competition, increasing costs and the slow [development] of a regulatory framework. It will be interesting to see how the industry progresses in the years to come.