GIMAV: Italian glass machinery report 2010

In 2010, the glass-processing machinery, accessories and special products sector showed promising signs of growth, although still characterized by a boom-and-bust trend.
During the same period, imports scored an overall increase of 2.64% compared to 2009, but with contrasting performance of the two sectors of the glass processing industry.

In line with the entire machine-building industry, the glass-processing machinery, accessories and special products sector also showed promising signs of growth, although still characterized by a boom-and-bust trend.
In 2010, imports scored an overall increase of 2.64% compared to 2009, but with contrasting performance of the two sectors comprising the glass processing industry:

  • Cold working machines and accessories (flat glass): +39.01%;
  • Hot working machines and accessories (hollow glass): – 4.27%.

Out of EUR 53.45 million imports, the flat glass processing sector claimed EUR 11.5 million, i.e. an over 39% increase over 2009. This boost basically returned the values to pre-2008 levels.
As usual, the primary area of origin was the European Union with little less than EUR 10 million. France remains the leading supplier with EUR 4 million, followed by Germany with 3.4. The UK exhibited outstanding growth, quadrupling its exports to Italy and reaching a share of over 10%.
Among non-EU countries, Turkey is also worthy of note as supplies from this country, even though remaining modest in terms of absolute values, actually grew by 450%. Imports from China took an upswing (+167%) after the downward plunge in 2009, similar to those of Japan (73.74%), which appeared to be slowly but steadily rising.
Out of total imports of EUR 53.45 million, the machinery, accessories and special products for hollow glass processing accounted for EUR 41.89 million, suffering an additional decline of 4.27% (on the heels of the -42.16% drop in 2009). Sweden remained the leading supplier with EUR 8.8 million but plunged by over 30% to a 21.05% share of total imports for hollow glass (compared to last year’s 29.9%), while Germany, even though holding on to its second-place standing, increased its share from 9.1% in 2009 to the current 10.18%, corresponding to a value of EUR 4.3 million.
With regard to the countries outside the European Union, imports from Croatia grew from EUR 4.6 million to 5.3, and those from Turkey reached the EUR 1.65 million mark.
The statistics regarding the rest of the world basically indicate stability in the flows from the US (EUR 5.8 million in 2009 versus 5.7 in 2010), while imports from China posted an upsurge (+46.76%) along with those from Iran which, with a value of EUR 869 thousand, reached a 2.08% share of hollow glass imports.
Despite the strong tendency to export, Italian companies are by far the preferred suppliers of the domestic market for this industry, especially for the flat glass-processing sector.
After the heavy setback of 2009 exports, which have always been the industry’s feather in the cap, slowly started climbing again, but with periods of promising vitality dotted with moments of market stagnation. The sector closed 2010 on positive ground, especially due to the hollow glass component which witnessed the revival of some of those investment projects that had been abruptly put on hold between 2008 and 2009.
Flat glass exports also rose, but seemed to be struggling more due to the continued crisis of the outlet sectors for some of its products, with the building industry being the most striking example.
As of 31 December 2010, the statistical surveys for exports indicate an overall growth of +5.28%, more specifically:
–    machinery, accessories and special products for flat glass + 1.20%;
–    machinery, accessories and special products for hollow glass + 13.67%.
The geographical breakdown of export flows demonstrates that the European Union remained the main outlet area in 2010 (35.82% share of total exports). Thus, the EU confirms its standing as the preferential market outlet, which, if added to the 11.67% share held by the rest of Europe, confirms that the Old Continent is the destination of over 47% of Italian production.
When analyzing the overall data for the past three years, however, it becomes apparent that demand from industrialized economies is inevitably declining, forcing the export flows to shift towards the emerging areas of Asia and Latin America.
The recent economic-financial crisis, however, may have accelerated this process by bringing important markets such as Spain and Russia to a standstill. Thus, while it would be best to adopt a wait-and-see approach in order to assess the true magnitude of this decline, the wind is undoubtedly changing.
The domineering rise of China, by far the leading outlet market for Italian products, is accompanied by the remarkable growth of Iran, rising from 25th to 5th place in this special ranking. On the other hand, Bulgaria fell below the 15th position (dropping from 5th to 17th place) along with Great Britain and South Africa.
Out of total exports of EUR 780 million, the machinery, accessories and special products for flat glass claimed over EUR 504 million, i.e. a 1.20 % growth vs. 2009. Even though still far below the record values achieved during the two-year period from 2007 to 2008, this positive result indicates that Italian exports have finally stopped their free fall and, even though with great difficulty, are actually starting an upswing. In line with the trend exhibited by the entire industry, the flat glass sector has also registered a progressive decline in the share of European countries, against an increase in the flows to emerging economies.
The European Union claimed 39.65% of Italian exports of machines, accessories and special products for flat glass, a share which increases to 48% when considering the whole of Europe. There was a general decline in absolute value, except for Turkey (+52.5) and Spain (+16.6%) which, despite their recovery, remain far below their pre-crisis shares. In fact, Spain’s purchases from Italy plummeted by almost 50% in 2009. Germany, even though rising to 2nd position among the top 15 client countries, suffered a 10.23% drop in absolute value. Unfortunately the downward plunge of Russia continued, adding -68.49% in 2010 to the already devastating -37.5% of 2009 vs. 2008.
Africa, after Algeria’s good performance in 2009, has returned to its usual moderate levels. North America (NAFTA area) reached a share of almost 6%, exclusively due to the excellent growth of Mexico which climbed from 18th to 11th position with a 79% increase in absolute value. Even though holding on to its 9th place position, the US showed clear signs that it was struggling, plummeting by more than 41% in value.
Central-South America suffered a slight decline. Nevertheless Brazil, its leading market, maintained its good position and, more importantly, the area continues to show signs of remarkable buoyancy.
Asia, with its 31% share, absorbed almost one third of the sector’s worldwide exports in 2010. China is now solidly Italy’s industry’s best customer and alone claims just over 50% of export sales in Asia. After a period of great difficulty, the Middle East seems to show signs of recovery, mainly in Saudi Arabia (+54%) and Iran (+144%), thus confirming a highly unstable market with moments of major investments alternating with sudden drops in demand.
Oceania practically held its share constant and Australia, even though it showed a slight falloff in the value of its purchases from Italy, has managed to remain among Italy’s top 15 client countries.
Of total exports amounting to EUR 780 million in 2010, the machinery, accessories and special products for hollow glass totalled EUR 275.23 million, corresponding to a 13.67% increase compared to 2009. The sector showed signs of extraordinarily dynamic vitality which led to the almost complete recovery of the 15% lost in 2009 vs. the previous year.
In line with almost the entire machine-building industry, this sector also experienced a progressive decline in terms of market shares held by European countries, mainly in favour of Asia and Latin America.
Exports to the 26 countries of the European Union made up 32.03% of the hollow glass exports which, when added to the 14.33% of the rest of Europe, brings the share of the European continent to 46.36%, versus 62% in 2009.
The top-ranking country was Russia, which increased its percentage share, but in terms of absolute value continued along the downhill course it started in 2009.
All the western countries exhibited a general decline of variable magnitude, with the exception of Germany and Austria which grew in both percentage share and absolute value. A similar situation was found in the East where demand appeared to follow a boom-and-bust trend. Africa closed the year with a positive sign, mainly due to the excellent performance of Egypt, which rose from 10th to 4th place in the ranking of best customers, but above all it grew by 74% in absolute value.
The Americas exhibited contrasting trends: the northern NAFTA area fell, while the southern area was on an upswing. The main player in the climb was Argentina, with an impressive jump from 42nd to 9th place and an exceptional 844% increase in value.
Overall, Asia posted a positive result compared to 2009 in both percentage share and absolute value, due to an upsurge in the flow of Italian exports to Iran (+722%) and China (+57%).
After the negative result suffered in 2009, the Italian industry of glass-processing machinery, accessories and special products resumed its journey towards growth in 2010. The stride of the hollow glass sector proves to be swifter and more confident, while that of the flat glass sector is still indecisive, but both are founded on an industrial fabric of remarkable solidity, experience and tradition.
Even though the industry is made up mainly of small and medium-sized firms, it is distinguished for its high propensity to export, actually exporting more than 74% of its production. An extensive, spread-out sales network, the ability to promote customer loyalty, operational flexibility to meet the demand and prompt technical service are the key elements that have made the Italian industry a constant leader in this sector.
After the significant contraction suffered at the end of 2009 due to the profound economic-financial crisis that shook the entire world, the sector has begun to thrive again. Yet the up-and down performance of many markets, in some cases caused by rising political tensions, widespread fears among the clientele and hard-to-find financing have hindered a more decisive upswing, preventing the achievement of a better bottom line result for the year. It should also be taken into consideration that in an ideal chain of use of materials, the glass product almost always constitutes one of the last links. Since this helped to delay the impact of the crisis on the Italian machinery sector (the first strong signs became apparent only at the end of 2008), it may be reasonably assumed that the demand for capital goods for glass processing will be revived as the initial part of the chain consolidates its own growth.
The statistical findings of the first months of 2011 seem to confirm this assumption. The unstable performance of the markets, however, remains worrisome since it prevents companies from starting any far-reaching projects.