Lack of diversification undermining growth prospects
By Syed M. Aslam
Nov 10 - 16, 1997
Whether providing the monitor screen for the computer this article was written on, or the reading glasses many of its readers would be using, glass enrich our lives in numerous ways either directly or indirectly.
While glass could be stronger than steel it could be more fragile than paper and today it has unlimited use in the manufacture of bottles, jars, mirrors, car windows and windscreens, glass bulb and tube light, eye glasses, microscopes, ornaments, windows, sliding doors, furniture, components of electronics goods, etc. etc. In short, the usage of glass in the high-tech world of today permeates all industrial, household and personal activities and its importance could hardly be over-stated.
No other manufactured substance is made from such inexpensive raw materials as sand (silica), limestone and soda ash and though these basic ingredients are readily available in Pakistan the glass industry in the country has failed not only to diversify itself beyond production of sheet glass used in windows and as mirrors; glass containers such as bottles and jars primary for the use of the pharmaceutical industry and glassware, etc., and to a lesser extent in glass tubings such as tube-lights and bulbs and tableware---table tops, ashtrays, decoration etc.
Pakistan has very vast deposits of limestone and silica sand while the production of another raw material for the manufacture of glass, soda ash has increased 45 per cent from 147,200 tonnes in 1990-91 to 213,600 tonnes in 1995-96.
Glass industry in Pakistan comprises sixteen manufacturers in the organised sector which produces over 90 per cent of the indigenous production within the country. As mentioned above the three primary production activities of the local industry is limited to sheet, containers and tubings.
Talking to PAGE the chairman of Pakistan Glass Association, Fazal Irshad said the glass industry in the organised sector comprises 16 manufacturing units which produces 90 per cent of the indigenous production.
He blamed the sharp rise in the power tariffs and the increased power breakdowns in last few years as one of the major factor restricting the growth of the local glass industry. Furthermore, the increase in the price of the one of the basic raw material, soda ash which has recently registered a decrease has nevertheless gone up substantially over the years to the detriment of the industry, he said.
At present, the price of soda ash, both produced locally and imported, is Rs 9,500 per tonne which has substantially increase the cost of production during last few years, he added.
While the primary market of the local glass comprises pharmaceutical, construction and furniture industries, the manufacturers of bulbs and tube lights produce their own glass for their exclusive use.
While the overall growth of the manufacturing sector remained a negligible 1.8 per cent in 1996-97, the production of light bulbs and tube light registered an increase of 19.7 per cent and 43.4 per cent respectively while that of glass sheet declined by 21.4 per cent over 1995-96. In terms of quality the production of light bulbs increased from 34.1 million to 40.1 million and that of tube-light increased from 4 million meters to 5.5 million meters in July-March 1996-97 over the corresponding period the previous year. On the other hand, production of glass sheet registered a decline of 21.4 per cent to 23.5 tonnes during the same period.
The failure of the local glass industry despite the readily available raw materials within the country poses serious questions as to why it has not only failed to diversify to more valuable products but also to retain the growth no matter how limited it has been.
Sources said that while the industrial, construction, residential, commercial, household and artistic use of glass provides an unlimited potential the same remains untapped as the bulk of quality glass is being imported into the country to satiate the specific demand.
While there are thousands of kinds of glass its production could be divided into four basic varieties: Flat glass, glass containers, glass ceramics and specialty.
The flat glass is used in windows, buildings, cars, ships and trains usually as glazed (filled) with sheet glass which is commonly called window glass. Where exceptional clear and accurate vision is required such as display counters or shop windows usually polished glass' is used. Sheet glass is given no additional treatment once it is drawn from the melting furnace while plate glass is usually ground and polished and is used in manufacture of mirrors, partitions, furniture and also in industry.
Glass containers are used for packing food, beverages, medicines, chemicals and cosmetics. It is also used in the manufacture of wide variety of shapes, sizes and colours.
Glass ceramics are materials first melted and fabricated as glass and then changed into strong and hard crystalline substance through a careful heat treatment which allows them to withstand high temperatures and chemical reaction. This explains the reason for the widespread use of this type of glass as cooking utensils.
While the local glass industry is producing a limited quantity of these three basic kinds of glass which is mainly directed at price conscious construction, pharmaceutical industry and residential consumers, the fourth type of glass product, specialty glasses has yet to be developed in the country primarily due to absence of technology and the apprehension that the expensive products would not have the demand to make such a project viable.
Specialty glasses include many types of glass invented since early this century until which nearly all the glass used was flat glass, glass containers, optical glass and decorative glass. Some of the important specialty glasses laminated safety glass, tempered glass, opal glass, foam glass, glass building blocks, heat-resistant glass, electrical-conducting glass, glass tubing, ray absorbing glass, photosensitive glass and photochemical glass.
While in theory glass making involves mixing of large amounts of silica sand with comparatively smaller amounts of lime and soda ash, and other materials to give the glass special qualities, and heating the mixture in a furnace until it turns into a syrupy mass, in practice it is a laborious process that requires specific skills.
Soda-lime-glass is probably the most used kind of glass world over and also in Pakistan. It is widely used as plate and window glass, manufacture of the bulk of containers, light bulbs, etc. It contains about 72 per cent silica, 15 per cent sodium oxide, 9 per cent calcium oxide (lime) and 4 per cent other ingredients. The silica comes from sand dug out of sandstone queries, sodium oxide usually comes from soda ash made from salt (as is the case with the local production) though some also comes from sodium nitrate and sodium sulphate while calcium oxide is usually obtained from limestone or dolomite (Pakistan has very large deposits of both). The soda-lime glasses has always been popular as they are not only inexpensive to manufacture but also easy to melt, and to shape, and are reasonably strong.
While the bulk of the local glass production comprise soda-lime glass for the obvious reasons it has made only a very limited inroads to produce potash-lead glass, borosilicate glass and coloured glass.
The first also commonly called lead crystal glass is made from sand, red lead and potassium carbonate and may also include some soda and is widely used to manufacture the finest tableware and in certain electrical products.
Borosilicate glass is heat- and shock resistant and contains about 81 per cent silica, only 4 per cent lime or soda, 2 per cent alumina and 13 per cent boric oxide. It is used to make baking ware, glass pipelines and telescopic mirror. Needless to add, in Pakistan it has a limited usage in baking ware.
Coloured glass contains metals or certain metal compounds to give the glass a certain colour. For instance, one part of nickel oxide in 500 produces a tint that may range from yellow to purple depending on the base glass, one part of cobalt oxide in 1000 gives an intense blue. The red colour is usually caused by small amounts of copper or gold, or compounds of selenium or cadmium. Similarly, many other colours can be produced in glass by adding certain other chemicals.
It is easy to see that the glass industry in Pakistan, many of manufacturing units of which are over four decades old, has limited itself to produce the basic types of glass while the bulk of demand for the quality products in the industrial, commercial, construction, and residential sectors is filled by the imported counterparts.
Sources in the glass industry said the limited demand of the expensive quality glass in the country does not permit them to start projects which have high settling up costs. The industry has chosen to manufacture the inexepensive basic glass products which could be consumed locally, they added.
Going through the annual reports of the glass manufacturers in the organised sector one could feel the helplessness of the industry which though lacking no inexpensive supply of raw materials is nevertheless losing hundreds of productive hours due to frequent power breakdowns and rising costs of such inputs as electricity, gas, packing material: Balochistan Glass Limited, Production during the year [1994-95] declined by 5.07 per cent over the previous year... mainly due to power breakdown... Power failures resulted in downtime of 550 machine hoursan increase of 93 per cent. The Company remained under constant inflationary pressure with exorbitant increase in the price of electricity, soda ash and other raw materials.
"Ghani Glass: ..... production suffered due to interruption in supply of electric and natural gas."
"Prince Glass: Cost of manufacturing registered a substantial increase due to the continuous inflationary trend in the cost of gas, electricity, raw materials, packing materials, etc., as well as the depreciation of the currency."
Observers say that while the basic raw materials are readily available locally, particularly the inexpensive silica and lime stone, the increase cost of power and imported raw materials are the major factors detrimental to the production in the glass industry.
Traditionally, power and fuel, and packing material adds upto one-third of the total production cost in the glass industry. It is obvious the increase in the prices of these production inputs neutralizes whatever advantage the industry enjoys as far as the supply of inexpensive raw materials is concerned.
Sources told PAGE that the reduction in the import duty on sheet glass plus the abolishment of tax on the import of glass containers by the pharmaceutical industry would result in shrinking the market for the local glass manufacturers. The former would shrink the market of the sheet glass while the latter would allow the pharmaceutical companies, which used to supply the industry with a substantial amount of business, to import their own packaging material at the cost of local manufacturers, they added.
The increased competition from foreign products which clearly enjoys an edge of their local counterparts, both in quality and price with the lower tariffs would take away a substantial amount of business from the local manufacturers, it was added.
Sources said that the glass industry which has the vast potential for growth has failed to grow, and diversify, as it does not appear high of the list of priorities of the successive governments all of whom never provided any incentive to make it develop into an industry of size and quality.
The present scenario is disturbing as not only the it is detrimental to the existing industry but more so as it restricts the high quality and price products within the country.
While the industrial, construction, residential, artistic and decorative usage of the glass is increasing within the country the neglecting the glass industry would result in increased imported production to undermine an already limited local manufacturing not to mention the diversification which has yet to take place.
What this translates into simpler words is: A drastic shrinkage in the market of local manufactures the bulk of whose production comprise sheet glass and containers for pharmaceutical companies. As far as the electrical industry is concerned the local manufacturers were never a part of it as light bulbs and tube-lights as high produced by the former themselves.
The reduction in the import tariff on the glass sheet and the abolishment of tax on the import of pharmaceutical containers which thus far remained the major source of revenue for the local glass industry is feared to cut the profitability and the productivity of the glass manufacturers in the months to come.
The shrinking market has the potential to cause an irreparable damage to the local glass industry unless the government takes appropriate measures to rectify the situation. For instance, the government could increase the import tariff on the sheet glass a similar variety of which is produced within the country. It could also introduce tariff on the import of pharmaceutical glass containers to make the local products competitive with the imports.
The widespread and increased use of glass by all the cross sections of the society offers a huge potential for the development of the industry within the country for the benefit of the industrial, construction, furniture, residential, etc., consumers of the country which with a population of 140 million offers tremendous economic benefits.
Unless the glass industry is accorded the importance that it needs, and deserves, the situation is feared to get worse over the years resulting in spending of millions of dollars to meet the demand of glass in the country.
It is also clear that without the introduction of high-tech manufacturing methods the glass industry would keep on producing the primary kinds of glass and thus unable to meet the increasing quality and variety demands which is, and will be, met by the imported high quality products.
Verities in glass industry
The history of glass making dates back to 1,500 BC. Until 300 BC Egypt was the centre of glass manufacturing which kept on flourishing in all countries under the Roman rule.
In last hundred years the development, manufacture and use of the glass has increased on an revolutionary scale. Modern methods have produced better glass at reduced costs and have led to the use of glass in completely new fields such as pipeline, cooking ware, building blocks, heat insulation, etc.
While the glass manufacturing in Pakistan has remained limited to three basic varieties with little diversification, the international glass industry has come a long way from early this century, when nearly all glass used was flat glass, glass containers, optical glass and decorative glass, to the state-of-the-art varieties at present. The specialty glasses of today include not only many of the glass invented during this century but also many new varieties some of which are listed below:
Laminated safety glass which contains alternative layers of plastic material and flat glass. It is widely used in car windscreens to avoid serious injuries as even if the outside layer of the glass may break if hit by an object, the plastic layer being elastic retains the broken piece of glass not to permit it fly.
Tempered glass looks similar to an ordinary glass though a special heat treatment makes it up to five times as stronger. When tempered the glass breaks into small, dull edged, relatively harmless pieces.
Opal glass contains small particles which disperse the light to appear milky. It is widely used in the manufacture of lighting fixtures and tableware.
Foam glass looks like a black honeycomb when cut. It is filled with many tiny cells, each of which is sealed off from the others by thin walls of glass. It is so light that it floats on water. Often used as cork substitute it is widely used as a heat insulator.
Glass building blocks contains two hollow half-sections sealed together at a high temperature. The airspace between the two blocks makes them a good heat and cold insulator to be widely used in the construction industry.
Heat-resistant glass contains large amount of silica and boric oxide which make it withstand great temperature changes without cracking. It also resists chemical attack thus making this particular kind of glass much useful in laboratory and kitchen.
Electrical-conducting glass. While ordinary glass is an excellent insulator against electricity it can be sprayed with a thin, almost invisible film to conduct enough electricity to heat the glass. It is used in food warmers, room heaters and windscreen for automobiles and airplanes.
Glass tubing is used in the manufacture of florescent and incandescent lamps, radio and television valves, neon-signs, glass piping and chemical apparatus.
Fibre glass, as the name suggests is glass drawn into thin fibers which could be loosely packed together in wool-like mass for heat insulation. It is widely used in the construction industry.
Ray-absorbing and ray-transmitting glass can transmit, modify, or block heat, X-rays and other types of rays. For instance, ultra-violet glass admits the tanning rays of the sun but blocks out part of the heat, polarised glass cuts out the glare of brilliant light and one-way glass makes it possible to look through without being seen.
Photosensitives glass can be exposed to ultra-violet light and then to heat to form a pattern or photograph within it. The image will last for ever unless the glass is heated enough to soften.
Photochemical glass is a special photosensitive glass that can be cut by acid to reproduce an image. When dipped in acid, the image is etched in the glass.