The size of the Asia-Pacific container glass market is forecast to reach US$ 61 billion by 2026, after growing at a CAGR of 4.3% during 2021-2026. There has been a growing demand for glass containers across various industries like F&B, pharmaceuticals, perfumery, cosmetics and so on.
November 2021: AGI glaspac (HSIL Group) is targeting a market share of 22% in the glass packaging industry while riding high on its Rs.220 crore expansion at the Bhongir Plant in Telangana. Rajesh Khosla, President & CEO, shares the company’s growth plans while also sharing industry insights in this exclusive interview with Niranjan Mudholkar, Editorial Director, Pro MFG Media.
Last year, AGI glaspac started off with its major expansion plans at the new plant in Bhongir. What’s the progress on that front?
AGI glaspac has done major expansions in 2020 by setting up a Greenfield facility to make speciality glass at Bhongir (Telangana), with an investment of Rs.220 crore. This year, we have invested Rs.55 crore from the Rs.220 crore to build a new furnace of 154 TPD AGI Speciality Glass division. The speciality glass facility will have a manufacturing capacity of 154 tonnes per day and five manufacturing lines spread across 15 acres. The plant will cater to high-end pharmaceuticals including vials, perfumery, cosmetics and other segments. We are planning to invest in technology upgrades, inspection, packaging systems, warehousing and logistics. We are looking to increase the volumes by at least 50% to meet the rising market demand in the next five years.
How are you leveraging on these investments at Bhongir?
The facility comprises end-fired furnaces with six forehearths for production. Hence, with the setup of this new furnace, our Bhongir plant can produce 154 tonnes of premium flint and other different colours. Our speciality glass caters to industries such as carbonated water, sparkling wine, pharmaceuticals, including vials and cosmetics, such as beauty products, perfumery, nail polish and others. Therefore, we have been able to successfully reap benefits and propel further growth of our company.
Moreover, the Bhongir plant will promote local economy. The unit is expected to generate 4000 jobs.
At present, what is your overall manufacturing capacity?
We have two manufacturing facilities, one each in Hyderabad and Bhongir (Telangana). AGI today melts over 1600 tonnes of glass per day and has been heavily investing in R&D, machine-building and business excellence capabilities to maximise productivity and upgrade the plant. Our Hyderabad plant has implemented a management system of safety and quality of products in accordance with the International Standard BRC (integrated system, which includes the requirements of ISO 9000 standards, FSSC 22000). The total capacity of the Hyderabad Plant is 600 tonnes/day. Additionally, our Bhongir plant has 13.5 MW of installed solar capacity. The total capacity of this plant is 1000 tonnes/day.
Tell us something about AGI’s exports business.
AGI has invested heavily in this regard, and it has been working on ensuring more significant cullet usage in its existing facilities and adopting greener ways of production. As a result, we have been attracting interest from across the globe from like-minded entities to collaborate with us to meet their requirement for glass containers. We have not only gained more customers in the recent years but we have also extended our reach globally. We have been getting encouraging responses from across the globe and are confident that our new 154 MT premium flint furnace products will strengthen our exports manifold. With the new plant, we will focus on exports to the US, Australia and Europe.
What is your analysis of the speciality glass/high-end glass manufacturing industry in India?
The size of the Asia-Pacific Container Glass Market is forecast to reach US$ 61 billion by 2026, after growing at a CAGR of 4.3% during 2021-2026. Various benefits such as reusability, recyclability and refillability have led to the increased adoption of glass containers in various industries, which is a vital factor contributing to its market growth. Also, India, South Korea, China and Thailand have been witnessing a significant increase in beer consumption, which has also positively impacted the Asia-Pacific container glass market as most beer is packaged in glass bottles. However, the wide availability of various other alternative packaging materials is estimated to create challenges for the growth of the Asia-Pacific container glass market.
The glass packaging industry is primarily boosted by increasing alcoholic beverage consumption in the country. As per CARE Ratings, the Indian alcohol market is expected to increase to Rs.1,75,400 crore by 2021, boosting the country’s glass packaging segment. Overall, the Indian glass packaging market is expected to register a CAGR of 6.94% in 2026. The nationwide lockdown has brought the entire packaging supply chain to an almost grinding halt. However, the glass packagers in the country have shifted their focus to the pharmaceutical industry. Today, the Indian pharmaceutical glass packaging market is anticipated to grow at a CAGR of 7.7% during the forecast period (2020-2026).
Where does AGI glaspac stand in terms of market share and brand value?
We are one of India’s leading glass container manufacturers and the largest in south India. AGI glaspac is well-positioned in the market, and we are catering to approximately 20% of the glass container demand in the country. We are targeting 22% of the market share once our new 154 TPD (Tonnes Per Day) speciality glass facility is fully operational. We foresee top-line growth in our revenue by 15% to 18% by 2022-23.
What have been the key challenges faced by this industry in India?
Excess capacity, increased competition and the development of a regulatory framework are the real challenges for the Indian glass industry. Glass packaging continues to face fierce competition from other forms of packaging in India, where, for commercial reasons, the use of alternative materials is increasing. Among the reasons for some customers to switch are loadability, breakage and unit cost. The industry needs to develop more lightweight bottles and improve the durability of its finished products. In the past, the local glass container industry has concentrated its efforts on such objectives as traceability to restrict counterfeiting. Such an initiative would involve using permanent engravings on containers, showing the quarter and year of manufacture. This system helps protect consumers from any malpractices employed by counterfeiters.
How has COVID-19 impacted the industry?
We faced logistics challenges when the lockdown curbed the movement of goods in and out of the districts. The government eased our efforts by including the glass-manufacturing sector under essential services. The exemption of non-essential goods will help most of the factories with the supply materials. Most companies have stored enough raw materials beforehand to run their businesses. A few companies will also have an added advantage when they have their own factories manufacturing the required materials, such as sand.
The problems faced by the industry in the emergency period and immediately before the lockdown include:
• Deficiencies in raw materials/input for manufacture
• Challenges in Transportation of finished goods
• Challenges faced by employees in returning to the place of work
• Delays in setting up new a plant in Eastern India.
What have been the key learnings from the pandemic?
We are able to effectively handle the COVID-19 outbreak. AGI started to provide the following new packaging solutions to its clients:
• Adopting a new tempering method for strengthening glass containers
• Creating a lightweight container in different geometric shapes
• Using newer technologies like single-stage forming to produce thinner but stronger glass containers
• Developing a coating on the surface of the glass to avoid strength loss
• Introducing heat-resistant pyrex glass
• Producing internally embossed glass bottles.
People have begun to think more about the hygiene of the products they are consuming. The requirements for safety and hygiene have become prominent because of the need for sustainability. It’s important to combine those aspects with real packaging sustainability. Recyclability, reusability and lowering the environmental footprint of the packed products, including avoiding waste, can help in addressing environmental concerns. Better waste management and end-of-life treatment of packaging are also important. A robust packaging material like glass is the answer to any or all of these demands.
At AGI glaspac, we adopted Windchill, which is a product life-cycle management tool that integrates all the stakeholders of the operations right from new development to bottle packaging. The SAP system is in use to trace everyday operation metrics and quality parameters. The business excellence team is supplied with all the tools required for effective statistical analysis and the development of the latest methods for sustaining the improvements.
Do you think the pandemic has also fast-tracked the adoption of digitalisation? What is AGI glaspac doing in this regard?
Market forces require alcobev establishments to enhance efficiencies, achieve agility within their processes and adopt new technologies to remain competitive in the F&B world. Consumers are searching for product quality and safety as the demand for healthier, less-processed, natural and native food is increasing. With the continuing technological advancements within the sector, the prospects of the F&B sector are promising. The industry was badly hit last year. Since then, the emphasis has completely shifted from imitation to innovation. AGI glaspac is striving hard to bring in the latest technologies, which will be beneficial and safe for users. Our R&D department has developed an anti-bacterial range of bottles using advanced Germ Guard and Active Silver Technology.
How do you look at the Government of India’s ‘Atmanirbhar Bharat’ initiative in the context of your industry?
Industry 4.0 for Make in India and Atmanirbharta (self-reliability) for the manufacturing sector is being effectively promoted by the government since a manufacturing base provides a steady growth (especially when compared to service-based economy). There are various factors that are driving the transition towards increased sustainable packaging practices. A part of this drive is pushed by health-conscious consumers, the government and industry leaders’ new laws and regulations coming into force. Companies that achieve making this transition towards sustainable packaging are positively rewarded.
What role does your industry play in terms of sustainability?
The recycling infrastructure is still underdeveloped in India. Hence, the role of the manufacturers, policymakers and reinsurers is vital in adopting glass as a better lifestyle option and helping India achieve its global vision to replace plastic with green and eco-friendly packaging. Several pharma companies around the world are pledging and taking very important steps towards key sustainability goals. Various companies in India are also making it a priority. In future, the company’s performance in the areas of climate protection and occupational health and safety will be of utmost importance.
It is more important than ever for Indian companies to plan for recyclable packaging. At this moment, it is important to capitalise on effective technical solutions. Companies must start linking sustainability to their economic value in the long term. It will enable companies to introduce bold, eco-friendly practices into their core business model. Today consumers are becoming more cautious. Hence, companies are cognisant of environmental factors. Hence, in future, we should focus on plastic neutrality, water sustainability and green infrastructure.