2 October 1997: Surplus glass output is damaging the earnings prospects of Chinese glassmakers. Analysts are reported as saying the situation will probably last for another two to three years with fur…
2 October 1997: Surplus glass output is damaging the earnings prospects of Chinese glassmakers. Analysts are reported as saying the situation will probably last for another two to three years with further deterioration in 1998. Glass output soared after large-scale investment in the sector in the early 1990s, while demand slumped under an anti-inflation credit clampdown launched in 1993. Chinese glass stockpiles rose sharply between 1994 and 1996, forcing producers to drastically cut prices. Despite China“s ongoing economic boom, the supply of glass products still exceeded demand and the medium-term outlook for domestic producers became bleak. Luoyang Glass, the country“s biggest glassmaker, reported net losses of Rmb45 million (US$5.42 million) for the first half of 1997 against net profits of Rmb19 million a year earlier. The results were calculated under international accounting standards. A spokesman for Shanghai Yaohua Pilkington Glass Co. Ltd said competition in the sector had intensified and a quick recovery was unlikely. Demand from Southeast Asia, the main export market for Chinese glass has also fallen as a result of expansion the region“s own glass industry. According to official statistics, China exported 13.41 million square metres of flat glass in the first five months of this year, down 10.73% from the same period in 1996, and with a decline in value of 29.5%.