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The Glass Industry

Glass is a growth industry. Global demand growth for glass outstrips economic growth around the world. Today’s architects and car designers are using larger surface areas of glass in their designs, increasingly with added functionality and complexity.

Key message

  • Flat Glass is a Euro 24 billion global industry at primary manufacturing level
  • 70 percent of the world’s demand for glass is in Europe, China and North America
  • NSG Group is one of four glass groups producing around 50 percent of the world’s high quality glass
  • The Pilkington float process is at the heart of the worldwide industry
  • NSG Group is one of only three glass groups supplying 70 percent of the world’s automotive OE glazing requirements
  • Global glass demand growth outstrips GDP growth
  • Volume growth as architects and car designers use increasingly larger glass areas
  • Value growth in Building Products is driven by legislation and demand for enhanced functionality
  • Value growth in Automotive is driven by model differentiation, increased complexity and functionality.

Routes to Market

RoutestoMarket

Most of the world’s float glass goes into buildings. Automotive applications account for around ten percent.

The chart above illustrates the main routes to market in the glass industry. In terms of volume of glass consumed, Building Products is by far the largest sector (~45 million tonnes) with ~5 million tonnes going to Automotive. Special applications is very small in volume terms but significant growth is being driven by the use of glass in Solar Energy generation.

In Building Products, glass can undergo two or more levels of processing before being installed in windows or used as a component in furniture or white goods. Within Automotive, glass is used in original equipment for vehicle manufacturers and in the manufacture of replacement parts for the aftermarket.

Global glass usage

GGlobal glass usage CY2011 

Market and Competitive Environment

The global market for flat glass in calendar year 2010 was approximately 55 million tonnes. At the level of primary manufacture this represents a value of around Euro 23 billion. Of this tonnage, around 70 percent is consumed in windows for buildings, ten percent in glazing products for automotive applications and 20 percent used in domestic appliances, electronics, furniture, and Solar Energy applications.

Europe, China and North America together account for 75 percent of demand for glass. Europe is the most mature glass market and has the highest proportion of value-added products.

Four companies; NSG Group, AGC, Saint-Gobain and Guardian, produce around 60 percent of the world’s high quality float glass. Much of the world’s lower quality float and sheet glass production is being replaced by high-quality float.

There are only three glass groups with global automotive glazing capability and presence. NSG Group (Pilkington Automotive) AGC and Saint-Gobain, together with their respective associates and strategic partners, supply 70 percent of the world’s Original Equipment (OE) glazing requirements.

The NSG Group is increasingly leveraging its technical capabilities to penetrate more attractive, value-added market segments.

Industry economics

A float plant typically costs €70 million to €100 million to build, depending on size, location and planned product complexity.  It will operate non-stop for a ‘campaign’ of between 10 and 15 years, making around 6,000 km of glass a year, before requiring refurbishment. A capacity utilization rate of above 70 percent is required for the plant to be profitable.

In Automotive, a typical European automotive glazing plant, with capacity to fully glaze one million cars a year, could cost between €45 million and €65 million, depending upon the technology employed, the degree of automation and its location.

World high-quality float glass capacities

World high-quality float capacities 2011 

Growth in Glass

Over the past 20 years, glass demand has grown more quickly than GDP. In spite of the current recession, over the long-term, glass demand is still growing at more than four percent per annum.

Demand growth for glass is driven not only by economic growth, but also by legislation and regulations concerning safety, noise attenuation and the response to the growing need for energy conservation. Architects and car designers are increasing their use of glass in buildings and vehicles, particularly value-added glass.

Demand for value-added products is growing at a faster rate than demand for basic glass, enriching the product mix and boosting the sales line. Value-added products, particularly coated, are delivering greater functionality in all application areas.

      

Global float demand and GDP growth 2011