It’s eco-friendly, safe and now, with raw material prices down, relatively cheap. Can glass stay strong as emerging markets up consumption, asks Robert Miles
Glass packaging has enjoyed a revival recently.
After the glass industry took a hit a few years ago, when the glass packaging of many milk and soft drinks was changed to PET and the 2008/9 recession cut demand for all types of packaging, interest in glass is once again rising, driven by environmental and health concerns as well as growing demand from emerging markets.
A key factor in the resurgent popularity of glass is its taste preservation properties, combined with health credentials glass is an extremely safe container for protecting flavour and preserving food. In addition, glass is thought to be more environmentally friendly than packaging made entirely from new, since it is 100% recyclable and can be reused many times.
Using glass makes economic sense, too. Glass is typically a mix of sand, soda ash and limestone (calcium carbonate). Sand and calcium carbonate are relatively cheap, making soda ash the most expensive raw material component, by weight, of glass. Global supplies of soda ash are looking healthy at the moment world production reached 46 million tonnes in 2010, up 5% on 2009 meaning that, despite soaring energy costs, the raw material price of glass has actually decreased in recent months, from about £500 per tonne at the start of May to £380 at the end of August.
This has made the use of glass more attractive against increasingly expensive alternatives such as aluminium, steel and a wide variety of plastics and cartonboard-based substitutes, whose prices have risen between 7% and 37% over the past year.
However, growing demand from emerging markets could put global glass supplies increasingly under pressure and cause prices to rise. In 2010, Europe a key global glass producer manufactured 20.7 million tonnes of glass. This marked a 3.5% increase on the 20.1 million tonnes produced in 2009 but such growth rates are unlikely to keep pace with future demand from markets such as China and India.
In the developed world, per capita consumption of glass stands at about 20kg per year. In India, it is just 2.2kg, and in China it is 9kg. This is forecast to rise by about 10% to 12% annually over the next three years, causing a boom in demand for glass and recycled glass.
As glass consumption in emerging markets is expected to grow, glass packaging should put in a sparkling performance in coming years with prices to match.