The Indian Glazing Industry: Fast Forward

A look at India’s booming glass market
By Sahely Mukerji
February 1, 2007

While the glass market outside of Europe and North America is much less mature, with annual per capita consumption levels averaging around 5 kilograms, the demand for flat glass in India has increased at an average rate of 12 percent to 15 percent each year for the past two to three years, according to the Master Guide to Indian Glass 2005-06.

Both float and sheet glass are produced in India, with market shares of 89 percent and 11 percent, respectively, says K.K. Trivedi, secretary general, All India Flat Glass Manufacturers’ Association, New Delhi. However, the greater proportion of sheet and lower-quality float capacity will gradually phase out and be replaced with high-quality float, the Master Guide predicts.

The major producers of float glass in India are three foreign joint ventures: Asahi India Glass Ltd., Taloja, Maharashtra; Saint-Gobain Glass India Ltd., Sriperumbudur, Tamil Nadu; and Gujarat Guardian Ltd., Ankleshwar, Gujarat. These three companies meet Western standards, Trivedi says.

Gujarat Guardian produces 550 tons per day; Asahi India’s two plants produce 500 tons and 750 tons per day; and Saint-Gobain’s two plants produce 550 tons and 700 tons per day, according to the Master Guide. One other domestic company, Triveni Glass Ltd., Iradatganj, Allahabad, also produces 200 tons of float glass per day.

Other than the foreign manufacturers, 27 domestic companies process glass with more than 40 tempering lines, 15 double-glazing lines and six lamination lines, says Sharanjit Singh, managing director, GSC Toughened Glass Pvt. Ltd., Greater Noida, Uttar Pradesh, and chief coordinator, All India Glass Processors Panel, affiliated to AIFGMA. There are 5,000 glass retailers are in the country, he says.

The market
The two main consuming sectors of flat glass in India are the construction and automotive industries, both of which have been experiencing hyper growth during the past two to three years.

“Eighty-three percent of the glass produced is used in the construction industry, 15 percent in the automotive industry and 2 percent in miscellaneous industries such as furniture and photo frames,” Trivedi says. “The automobile industry, four-wheelers, has registered 18.6 percent growth between January and November 2006. The construction sector is growing around 12 percent per annum.”

This growth has been aided by an 8 percent cut in excise duty on vehicles in the 2003-04 Union Budget and the availability of loans on easy terms for housing and vehicles. Saint-Gobain Sekurit India Ltd., Pune, Maharashtra, and Asahi India primarily service the OEM automotive market, Singh says. Two mid-sized and 15 small automotive non-mainstream companies service the replacement market, he says.

India exports about 13,000 tons of glass per month to the Middle East, African countries, Europe and South America, Trivedi says. The rapid increase in the demand for flat glass in the domestic market has resulted in a cutback in exports by as much as 60 percent in the last couple of years, according to the Master Guide.

“Saint-Gobain started the first line in Chennai in 2000 primarily for exporting,” says Nikhil S. Kelekar, commercial head, Saint-Gobain Seva Engineering India Ltd., Bangalore, and senior manager, Grindwell Norton Ltd., Bangalore. “Then the local market boomed, so we started the second line in 2005. The entire construction industry has grown 15 percent year-on-year since 2000.”

India’s biggest competitor in the glass market is China, Singh says, and upcoming competitors are Indonesia, Malaysia, Thailand, Iran and Vietnam.

“The government of India protects the glass industry,” Singh says. “They put an anti-dumping duty on glass from China and Indonesia. But automotive glass from China is not protected by the anti-dumping duty.”

Processing industry
Processed architectural glass from China also is being used in many big Indian projects. “It’s a serious threat to the nascent Indian glass processing industry,” Singh says.

Despite the threat, processing demand has increased by more than 30 percent per year, Singh says. “It’s the next best [rate of growth] to IT industries,” he says. The processing capacity, on the other hand, has increased by 60 percent in the last three years, he reports. “The initial spurt in demand for processed glass saw the existing processors making good money, and a large number of new people invested in the industry in addition to the huge expansion of the existing industry,” he explains. “Presently, in spite of a booming market, the capacity utilization of the processing industry is only 40 percent.”

Processing started in India 12 years ago, and today “there are 49 tempering lines in India,” Kelekar says. “The estimated figure [for 2006] in 2004 was 35. In 2007, another 17-18 lines will be added.”
Architectural tempering started in India in 1994, Singh says, double-glazing started in 1996 and architectural lamination started in 2000. Hardware for glass started being manufactured in 1998. “GSC Toughened started the first tempering and laminating in India,” he says. “GSC also manufactured the first indigenous tempering machine in India. And today, it is the only Indian processing company that meets Western standards.”

The company exports to Belgium, Luxemburg, France, Ireland and the United Kingdom. It has four tempering lines, 750-plus workers and annual revenue of $17 million.

The challenges
Even though companies such as GSC and Gold Plus Toughened Glass Ltd. of New Delhi are making good money, the industry is not without its share of problems. Two main problems are hounding the industry: overcapacity in spite of rising demand, and lack of codes and standards, Singh says.

“Demand’s been growing, but the capacity has been added at a higher rate than the growth,” he says. “Utilization will remain depressed and competition will rise in the next three years.”

Kelekar agrees. “We need stipulations and codes enforced by the government,” he says. “Once that happens, quality of glass will become an issue and customers will have to pull up their socks and produce quality glass.” Saint-Gobain Seva makes tempering machines in Bangalore, but “it’s tough to sell in India because of the Chinese machines,” he says. “They’re cheaper but also of inferior quality.”

Trivedi echoes Kelekar’s thought: “We don’t have any government guidelines, and consequently, the safety angle’s not taken care of,” he says. “We’ve been talking to state governments for the last three years. If we succeed in convincing at least one state, we’ll be able to take it to the other states. We’ve also been working with the Bureau of Indian Standards, and the International Institute of Energy Efficiency of the United States has been given the responsibility of preparing a draft.”

Amit Malhotra, managing director, McCoy Silicones Ltd., New Delhi, says he’s been talking to companies in the glass, sealants and processing sectors for a year to create a standard. “We need to create a standard and present it to the BIS,” he says. “Most of the 50 members of the All India Glass Processing Association are part of this. If standardization doesn’t happen, this industry will go to the dogs.”

Looking ahead
Codes or not, “the industry is expected to grow at a rate of 10 percent per year in the next five years,” Trivedi says. “The Indian economy itself has been growing at an average rate of about 8.5 percent in the last four years.”

Over the long term, glass demand is growing at around 3.8 percent per year, significantly above global economic growth rates, according to the Master Guide. Demand for value-added products is growing at a faster rate than demand for basic glass, boosting sales of building products and automotive glazing, the Guide says. Architects are using more glass and value-added glass. As legislation and regulations concerning safety, sound attenuation and energy conservation fall into place, India will be a significant competitor in the global glass market.

“We have a lot to learn but we have guidance from the best in the world [United States] in creating our standards/codes,” Singh says. “We won’t have to make the mistakes that they made, and can learn from their mistakes. And some day, God willing, we’ll be as good as them, if not better.”