Wednesday, September 09, 2015

Production of glass can fall 5% with lower demand for real estate and cars

The national glass industry can register a pullback of up to 5% this year, down mainly by the fall in demand from the automotive and construction sectors, but still supported by the packaging segment.
According to the Superintendent of the Brazilian Technical Association of the Automatic glass Industries (Abividro), Lucien Belmonte, to be inserted into a very dispersed range of products, the market tends to follow the variations of the glassmaker's gross domestic product (GDP). This year, however, the crisis in the car manufacturers and the fall in demand for real estate should cause the performance of sector growth the country distance.
Although there are no official estimates, the Executive says that the perception in the companies point to a fall of 30% both in providing to vehicles as for builders. What can hold the contraction, he says, is the slowdown less blunt demand for food, beverages and nondurable goods.
According to data from the Brazilian Association of packing (Open), the glass container industry was presented the smallest fall in production in the first half compared with the same period last year. While the industry average was pointing to a pullback of 2.59% between the first six months of 2014 and 2015, the manufacture of glass products fell 0.41 percent on the same basis.
The Executive Director of the entity, Luciana Pellegrino, States that the development of the markets in which the glass packaging inserts would be driving the segment. She cites the growth of domestic industry, with the professionalisation of the wineries, and increasingly intense demand for ready-to-eat foods as two trends that stimulate the industry.
Another positive aspect is the perception of the glass like material that adds value and ensures a quality reference products, says the Executive. Even the reusable nature of the cups, in a way, makes some companies prefer this input for their goods.
"This result can be coupled to a delay in the response of this industry to the economic environment," says Luciana. "In the first quarter, we had a growth that may have been caused by a stock replacement after the end-of-year parties. But between April and June, this trend has already been resolved and perceive a variation more in line with the industry average, "he says. "It may be that this scenario won't last the rest of the year," he adds.
Belmonte, Abividro, points out that the glass industry suffers from the rising costs of energy and labor, which has hindered the development of this market. Even the raw material costs have increased with the value of the dollar, the Executive. As Brazil does not produce the required sodium carbonate sand processing, the material is all imported.
For the long term, he works with a stabilisation in the sector perspective, from the growth of the economy, but says not to see the possibility of entry of new entrepreneurs in the area. "We've been the platform who answered the whole market of South America, but we made a point to kill our industry", criticizes.
Despite the current dismal scenario, the Verallia, subsidiary of Saint-Gobain Group, decided to bet on the Brazilian potential and invest $ 250 million in a new factory.
"We hope to not only strengthen our presence as one of the leaders of this sector in the country as, also, contribute to the social and economic development of the region," says in a statement the Chairman of Saint-Gobain in Brazil, Argentina and Chile, Benoit d ' Iribarne. The company must start at the end of the year, the production of its new unit, located in the city of Estância in Sergipe.
The Center will be responsible for the manufacture of product lines of bottles and jars for beverage and food markets that use intensively the glass as a packaging material. According to the company, a special attention will be given to products specifically used by potential customers in the region.
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