Despite the present slowdown in the economy, the Indian glass container industry has reported a double digit growth. The industry, presently dominated by 10 big players, is likely to close the fiscal with a turnover of Rs 4,500 crore. Industry representatives said demand from liquor, beer, pharmaceuticals and, food and beverages industries was driving growth.
V Sreeram, spokesperson, All India Glass Manufacturers’ Federation (AIGMF) said the industry is likely to close the current fiscal with a turnover of around Rs 4,500 crore as compared to Rs 4,000 crore, a year ago, registering a 12 per cent growth. The industry is bullish it would continue to report double digit growth for the next few years.
Of the 10 major players, the three majors — Hindusthan National Glass & Industries, Gujarat Glass and Associated Glass Industries - alone has a market share of 80 per cent of the market share, said Sreeram. Total production capacity of these ten manufacturers is around 4,000 tonnes a day.
The liquor and beer industry uses around 65 per cent of India’s glass container production, followed by food at 20 per cent with soft drinks, cosmetics and food contributing the rest. AGI expects its exposure to the liquor and beer industry to rise substantially from the present.
“Most of our key customers in this segment are ramping up their liquor and beer capacities... implying a steep rise in demand for our products,” said Sreeram.
Exports account for 10 per cent of total industry revenue of Rs 4,500 crore, he noted. The industry caters to the US and Europe market and predominately food, cosmetics and gherkin as finished goods.
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The glass-container industry in India has seen a period of consolidation in recent years. Investment in new furnaces and improved technology has been the prime focus.
This has resulted in glass container production and has more than doubled from approximately 800,000 tonnes in 1997-98 to 0.14 million tonnes, an increase of over 80 per cent. This is despite the stiff competition faced from alternative packaging materials.
With increasing substitution by alternative packaging materials like plastic, and paper and board, which are matching and improving the very characteristics that used to distinguish and differentiate glass (i.e. strength, an inert barrier for preserving contents and transparency) glass manufacturers are responding to this threat by improving, widening and emphasising the range of colours, size and design possibilities of glass and investing in technology to improve the weight and strength of glass containers to compete with alternative packaging materials. Glass is increasingly being used for premium products to enhance the brand image.
The Indian glass container industry has a rich history. From mouth blown and hand working processes, it has taken to automation in a big way, although traditional manufacturing processes have not been abandoned. Mouth blown and handcrafted glassware have a dominant role in decorative and table glassware, products which are exported in large quantities.
Glass being chemically inert and transparent is most suitable packing media for liquor, pharmaceutical / life-saving drugs and food articles. Apart from competition that glass containers face from other packaging media like plastic, aluminium and tetrapack, increasing use of second hand glass bottles is also growing in a menacing proportion. Usage of second hand glass bottles on large scale is of immediate concern because of the some major issues, said Sreeram.
This includes, on the revenue front due to increasing trend of using second hand glass bottles revenue loss to the central excise and sales tax authorities would be in excess of the total excise and tax revenue collected from the entire Container Glass Manufacturing industry.
On the health front, primary problem is that recycled bottles are un-hygienic. It may be pointed out that the recyclable bottles have to fulfill certain basic criteria. The industry is now planning to print the expiry date on the bottle to educate the end users, he added.