British glass manufacturer Pilkington is reportedly holding secret talks with Interpane International, a German rival, to create an alliance that would build Europe“s largest glass plant.
According …
British glass manufacturer Pilkington is reportedly holding secret talks with Interpane International, a German rival, to create an alliance that would build Europe“s largest glass plant. According to a recent report, Pilkington would scrap the plans as part of the deal, which it announced last September, in order to build a separate plant of its own in France. Instead the two would create a 50:50 partnership to build a vast glassmaking plant, probably on the same site in France as the one on which Pilkington is currently planning to build. The deal will be welcomed by London financial institutions, which was concerned that Pilkington“s investment plans would have been a heavy drain on its resources and threatened to infuriate competitors, thus triggering a price war. The alliance will reduce the cash cost of the project to Pilkington from about UK 75 million to an estimated UK 60 million, but increase the output of the finished plant by more than 30%. Until now Interpane has specialized in coating and laminating glass. It had been considering building its own glass plant to move upstream, a step which would have intensified competition in the European glass market and depressed prices. By forming an alliance, Interpane will agree to scrap plans for its own operation, the report said. The German company is expected to take charge of building the coating and laminating operations in the factory while Pilkington will build the main float line. Industry experts say the plant will be Europe“s first integrated glassmaking, coating and laminating line. The deal is the latest move by Paolo Scaroni, Pilkington“s chief executive, to secure the group“s position as Europe“s pre-eminent glass manufacturer. Since Scaroni became chief executive more than two years ago, he has radically reduced the group“s costs in Europe in a response to poor industry prices. He has now pledged to tackle the group“s cost base in the US.