The Australian glass product manufacturing industry presently consist of approximately 400 companies and those firms employ around 4,500 people. Three companies which are Owens-Illinois Australia, Amcor and Viridian (CSR Limited) control over 60% of the market and should continue to dominate in the foreseeable future.
Most companies that operate in this industry are worried about their future. China is presently importing a very large quantity of inexpensive glass that the local firms are finding difficult to compete against. In addition, the slowdown in the economy has hurt the construction industry which is seeing fewer new homes being built along with some companies delaying expansion until the fundamentals start to improve.
If all of that was not bad enough, the Australian dollar has made some of the products that the only local float glass manufacturers produce uncompetitive. Just recently, Viridian reported that a number of the items they manufacture are now being imported by Chinese companies and priced as low as 50% less than they can make them for.
Some of Viridian best customers are sticking with them hoping they will find a solution to the problem, while some of their smaller clients have already decided to use the cheaper imports. Another thing that all of the glass manufactures are worrying about is the introduction of the new carbon tax, which their Chinese counterparts do not have to deal with.
All industries go through shakes up every now and them. Some firms are able to innovate and make themselves more competitive. Whereas others companies simply cannot hold out long enough for the economy to improve, and end up having to shut down. Nobody is really quite certain what the future holds for the Australian glass industry. But, many executives and people in the know believe that if the government does not step in and lend them a helping hand, the future could be quite bleak.
Divisional General Manager – Jim’s Glass (Australia)
Board Member – Australian Glass & Windows Association