Vitro: foreign rivals gain ground in domestic market

Globalization has brought major glass manufacturers to Mexico who have made considerable gains in the domestic market for building glass where Vitro once enjoyed a virtual monopoly. The progress made …

Globalization has brought major glass manufacturers to Mexico who have made considerable gains in the domestic market for building glass where Vitro once enjoyed a virtual monopoly. The progress made by Saint-Gobain and Guardian Industries has been slow but effective. “We flirt with ever more (foreign) manufacturers who offer us their products. They have a different mentality to Vitro,” says Jose Luis Cams, director of Vidrio y Cristales Laminados. “While Vitro wants to sell us everything, the competition says: buy what you want from us and buy the rest from Vitro”, he added. Saint-Gobain opened its first plant in Mexico in 1997, Guardian Industries in 2003. Faced with this, Vitro has had to strengthen its container and autoglass lines, as well as exports. In 1996, Vitro held 96% of the market for flat glass; that share decreased to 57% in 2002 and 43% in 2007. In addition, the company had to shrink its divisions for household goods, glassware and various industries. The strength of Saint-Gobain is explained by its third place in global flat glass production capacity, with 14.5%. Guardian Industries, for its part, is fourth overall, with 12.5% of global production. In addition to its hard struggle to lower costs, including selling real estate in San Pedro Garza Garcia, Vitro has started a crusade abroad, through acquisitions and sales offices, even if these are still only symbolic. Federico Sada Gonzalez, director of the company, says the company“s presence extends to Portugal, Spain, France, North Africa, Panama and Bolivia. Director of finance Enrique Osorio adds that with more sophisticated products, such as double glazing for construction, Vitro wants to raise the value of its sales in Spain, the United States and, of course, Mexico. However, Saint-Gobain is not about to surrender. In January 2008, it injected USD 130 million into its plant in Cuautla, Morelos, the company“s largest and most modern in the world, for a second flat glass line which will double its output in Mexico. “The market we serve, construction and infrastructure, is very strong … there is reasonable mortgage lending and increasing demand,” said Guy Rolli, Saint-Gobain delegate for Mexico and Central America. Antonio Cardenas, deputy director of CH Group, anticipates that the battle for the market will become tougher, for example, with the entry of American glass at low prices, in search of a way out of the US housing crisis.