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Industry Facts and Figures
Flat glass is the material that goes into a variety of end products including windows and facades for buildings, windscreens and windows for transport, and solar panels, but also in many other applications such as furniture, electronics, etc.
Flat glass is the second largest sector in the glass industry in the European Union after container glass (bottles, jars, etc.). Flat glass represents around 30% of total glass production. The sector covers the production of float glass and rolled glass. Nowadays in the European Union, 97% of flat glass is produced using the float process.
Production capacity and demand
In 2014, the sector producted just below 8.5 million tonnes of float glass from the 55 float lines operating in the European Union. Around 15.000 people are directly employed in the manufacture of flat glass but the entire value-chain (glass processing, transformation, window assembly, installation, recycling, etc.) generates almost 1 million jobs in the EU.
On average, annual growth in flat glass output is in the order of 2-3%.
Float installations are located across 16 countries in the European Union, but three quarters of EU production originates from Germany, France, Italy, Belgium, UK, Spain and Poland.
However, demand for flat glass is particularly sensitive to economic cycles because of its high dependency on the building and automotive industries. During periods of economic growth and high demand for flat glass, annual growth is around 3%, whereas during economic downturns or recessions the flat glass sector is badly hit, as is the current case.
The economics of the flat glass sector
A float plant is highly capital intensive, typically costing around €70 million to €200 million depending on size, location and product complexity. Once operational, a float glass furnace is designed to operate continuously, 365 days per year, throughout its lifetime of between 15 and 18 years. Float lines are normally capable of several “lifetimes” following major repair or upgrade programmes (€30 million to €50 million).
The economics of the continuous-flow float operation require a high capacity utilisation rate – typically above 70% – before a plant becomes profitable. Energy and raw material costs are significant, representing almost two thirds of the production costs. Glass is relatively heavy, making distribution costs significant; they typically represent around 10% to 15% of total costs.
In most cases, transport costs make it uneconomic for float glass to travel long distances by land. Typically, 200 km would be seen as the norm, and 600 km as the economic limit for most products, though this varies between markets and the products’ added-value. It is possible for float glass to be economically transported along longer distances by sea. This tends to favour float lines with local port access unless a local market is available for the line’s output. This is the reason why the vast majority of glass produced at the EU borders such as in Algeria, Egypt, or the Middle-East can be easily transported and sold in the European Union. These manufacturing locations also profit from low energy costs allowing them to be very competitive on production costs.
However, as the automotive industry (the second market for flat glass) is becoming more and more global, more and more automotive glass travels across the globe amid enhanced competition in the glass sector and the increase in car trade. With the multiplication of car models and the adoption of ‘just-in-time production' principles by car makers, automotive glass manufacturers have to be able to switch and increase production at all times and to have enough diversity and quantity in flat glass stocks to be able to organise on-time delivery.
In the European Union, automotive glass is produced in approximately 50 dedicated plants that transform flat glass into windscreens, sidelights, backlights, rear mirrors, etc. These plants are usually located next to both float installations and automotive assembly plants to minimise transport at both ends and reduce both costs and environmental footprint.
|2nd||Largest sector in the glass industry|
|8.5 million tonnes||EU float glass capacity production (2014)|
|55||Float lines in the EU|
|15 to 18 years||Lifetime of a float line with continuous production 24 hours a day, 365 days a year|
|15,000 people||Number of employees in the flat glass making in the EU|
|70%||Utilisation rate at which a float plant becomes profitable|
|33 to 37%||Share of energy costs in production costs|
|€ 70 to €200 million||Cost of a float line|
|€30 to €50 million||Cost of an upgrade of a float line|
|600 km||Travel limit for float glass by land transport|