Glass Packaging Industry: How have few companies kept head above water?
Summary
In the packaging industry, the growth was the lowest for glass packaging segment (at 0.8%). This was highlighted in Televisory’s earlier blog (Asia the emerging saviour for glass packaging) on the subject. Thus, due to a slow growth in the industry, companies adopted a slew of measures such as cost reduction programs, product improvements, geographic diversification, product portfolio diversification, etc. A few firms managed to improve their overall profitability through these means while others could not keep up (failed). This blog analyses the key reasons for divergent profitability trends for companies in the glass packaging sector.
Marred by replacement …show more content…
34.7% -6.9% North & Latin America Vitro SAB de CV N.A. N.A. Mexico, USA Gerresheimer AG 56.9% -9.0% Emerging Markets (India & China) Nampak Ltd 11.7% -10.3% Africa
Decrease in EBITDA margins St-Gobain Oberland AG 78.0% 0.0% - Vetropack Holding AG 100.0% 0.0% Italy, Croatia, Slovakia Vidrala SA 100.0% 0.0% - Nihon Yamamura Glass Co Ltd No Exposure No exposure - Cristalerias de Chile SA N.A. N.A. Argentina Zignago Vetro SpA 100.0% 0.0% - Shandong Pharmaceutical Glass Co Ltd N.A. N.A. N.A.
(N.A.- Not available, exposure level could not be ascertained)
2. Product innovations and expanding into higher margin plastics and metals
A decline and stagnation in revenue compelled the companies to launch value added products to attract better yields. Following were the few major product portfolio related amendments which were undertaken:
• Introduction of glass containers for high margin market segments (pharma and beauty)
• Differentiating products based on the demand from geographies in which exposure was increased
• Expanding into float glass
Summary
In the packaging industry, the growth was the lowest for glass packaging segment (at 0.8%). This was highlighted in Televisory’s earlier blog (Asia the emerging saviour for glass packaging) on the subject. Thus, due to a slow growth in the industry, companies adopted a slew of measures such as cost reduction programs, product improvements, geographic diversification, product portfolio diversification, etc. A few firms managed to improve their overall profitability through these means while others could not keep up (failed). This blog analyses the key reasons for divergent profitability trends for companies in the glass packaging sector.
Marred by replacement …show more content…
34.7% -6.9% North & Latin America Vitro SAB de CV N.A. N.A. Mexico, USA Gerresheimer AG 56.9% -9.0% Emerging Markets (India & China) Nampak Ltd 11.7% -10.3% Africa
Decrease in EBITDA margins St-Gobain Oberland AG 78.0% 0.0% - Vetropack Holding AG 100.0% 0.0% Italy, Croatia, Slovakia Vidrala SA 100.0% 0.0% - Nihon Yamamura Glass Co Ltd No Exposure No exposure - Cristalerias de Chile SA N.A. N.A. Argentina Zignago Vetro SpA 100.0% 0.0% - Shandong Pharmaceutical Glass Co Ltd N.A. N.A. N.A.
(N.A.- Not available, exposure level could not be ascertained)
2. Product innovations and expanding into higher margin plastics and metals
A decline and stagnation in revenue compelled the companies to launch value added products to attract better yields. Following were the few major product portfolio related amendments which were undertaken:
• Introduction of glass containers for high margin market segments (pharma and beauty)
• Differentiating products based on the demand from geographies in which exposure was increased
• Expanding into float glass