Tariq Glass Industries Ltd (PSX: TGL) is a Lahore based glass manufacturing company which manufactures glass containers, tableware and float glass.
It works under multiple brands names such as Toyo Nasic, Omroc and Nova. TGL has become a major player in Pakistan’s glass manufacturing industry over the last two decades.
During FY15, the company undertook a capacity expansion and scheduled maintenance program on one of its tableware furnace, enhancing its production capacity from 110 MTPD to 140 MTPD. Additionally, Tariq Glass Industries Ltd has the facility of fully automated, state-of-the-art printing machines, with the capability of printing six colours simultaneously, including quality gold and silver banding.
TGL not only fulfils domestic demand but also exports its products to various countries across Europe, Middle East, Africa, Asia and the Far East. It also has technical collaboration with Toyo Glass of Japan.
FY 15 performance
During the financial year 2015 sales grew marginally. Float glass sales aggregated to Rs 5.032 billion which represents a growth of 26 percent as compared to the last year’s figure. TGL shut down one of it furnaces for eight months for a capacity enhancement project. This reduced company’s production by 30 percent to 37,111 MT. This allowed entry of imported Chinese tableware products to fulfil high demand, reducing TGL’s market share during the period. Tableware sales declined by 20 percent compared to corresponding figures of the previous year.
However, the company achieved a higher gross profit margin of 20 percent for the year mainly due to the improved sale prices of float glass products and low oil prices, particularly for the furnace oil and diesel. The company says it will recover its position to profits of Rs 408 million.
Snapshot of FY16
After a delay of several months, the furnace which was closed for scheduled rebuild was refired on April 20, 2016, with enhanced capacity of 140 metric tonnes per day. The Company successfully surpassed the barrier of Rs 6 billion in net sales during the nine months and recorded a gross margin of 23 percent in year-on-year comparison. During the past nine months TGL has enjoyed profitability mainly due to continuing low oil prices and high market demand for the company’s value added products.
Future outlook
TGL has focused on its float glass segment because of anticipated market demand due to construction acceleration because of CPEC and other activities. TGL will also receive higher prices of its tableware and flat glass segments. In FY16 it is also focusing on establishing power plants on its premises to have uninterrupted and cheaper electricity for manufacturing activities. It is also importing new state of the art Jug Making and Toughening Lehr machines. All these actions make the future outlook of the Company quite bright, despite the prospect of higher competition from China.