Glass manufacturers are feeling the heat of rising prices of raw materials, especially industrial salt and soda ash, coupled with a drastic reduction in the supply of fuel used in glass making. While most glass makers have reported a dip in margins as well as production, in some cases margins have turned negative.
According to sources, while industrial salt prices have risen 5-10 per cent, soda ash prices have increased by 8-12 per cent. Moreover, cheaper Chinese imports, especially in segments such as solar glass, have led to softening of end-product prices, further impacting Indian glass manufacturers.
"Industrial salt prices have risen in the recent times, which has led to an increase in the prices of soda ash as well," said a senior official at GHCL (formerly Gujarat Heavy Chemicals) on condition of anonymity.
According to glass manufacturers such as Gujarat Borosil, Haldyn Glass and Pragati Glass, most of whom have units in southern Gujarat, soda ash prices rose from Rs 17,300 a tonne to Rs 19,200 a tonne within a month.
"The glass industry is reeling under pressure from all sides. On the one hand, raw materials prices have been hardening; while on the other, there has been an unbearable fuel cut of 58 per cent. Raw material price rise could have still been passed on, but the fuel cut has left many of us with negative margins," said Ashok Jain, whole-time director at Gujarat Borosil.
GAIL had imposed a cut on gas supply on September 26 this year, forcing glass manufacturers to reduce production.
According Jain, production cut for glass manufacturers is between 15 per cent and 50 per cent. "We have been forced to take power from the grid due to the fuel cut. Add to that, raw material prices, especially that of soda ash, have also been rising impacting the industry further," said N D Shetty, chairman and managing director of Haldyn Glass.
