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Vitro sees IG opportunity in domestic market

In a bid to win back share in the domestic flat glass market it now shares with Saint-Gobain and Guardian, Mexico“s Vitro is looking to sales of its Duovent(R) insulating glass on its domestic market…

In a bid to win back share in the domestic flat glass market it now shares with Saint-Gobain and Guardian, Mexico“s Vitro is looking to sales of its Duovent(R) insulating glass on its domestic market. According to the firm, double glazing consumption in Mexico is only 0.5 m sq per person compared to 1.3 m sq in the USA and 2.1 m sq in Europe. Despite 15 years selling Duovent(R), sales took off with the acquisition of Spain“s Cristal Glass in 2001, which started the recovery of Vitro“s revenues. As demand grew, Vitro acquired Portugal“s Vidriaria Chvez in order to raise production. The two acquisitions lifted Vitro sales of flat glass in Europe from 8 to 15% in two years, or from USD 60 million to USD 117 million. Following the success in Europe, Vitro managers started to turn their attention to the Mexican market, where they hope to increase consumption of double glazing. Vitro is trying to obtain an amendment to Mexican building regulation 146, which, fortunately for the company, is under evaluation. As the director of sales for double glazing explained, Vitro is pushing hard for the application of rule 146 in municipal building regulations, which would mean that in five years 20% of new buildings will have to have double glazing. According to Alvaro Rodr“guez, director of finance for the group, Mexico has the potential for double glazing: the market is underdeveloped because of regulatory, technological and cultural insufficiencies. If the use of double glazing in housing is approved, the building regulations in force in each state and local authority in Mexico would require the use of insulating glass. Fulfilling higher demand would not be difficult for Vidro as it has two double glazing plants in Mexico and eight in Spain and Portugal, although it would be careful not to lower its guard. “Vitro“s flat glass business faces a risk: Guardian, one of the world“s top five flat glass producers, is building a plant in Mexico and could adopt aggressive strategies to gain clients” said Stefaan Peeters and Lidia Padilla, analysts with Banamex Citigroup.

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