Shifting markets appeal: Glaverbel CEO’s opening speech at GPD looks to the future

While waiting for the next ‘disruptive’ innovation to come along and dramatically change the industry, let us concentrate on three areas where shifts occur: globalisation, the environment and products.

Globalisation

China represents a unique challenge. We see more float glass capital investment in China today than in the rest of the world. The Chinese float manufacturing market is estimated at approximately 130 float lines owned by over 50 companies with complex and, increasingly, privately owned financial structures. This figure is impressive, given that in the rest of the world there are just over 180 float lines, 65% of which are controlled by major glass manufacturers.

Rising wealth levels and regulations have led to a demand for higher quality glass.

Environmental concerns and rising energy prices are on China’s agenda too. Hence the need for added value products such as Low-E and reflective coatings. It took several decades to impose Low-E in developed countries. It will take much less time to achieve the same result in China and with an estimated population of more than 1 billion, volume is needed.

The Chinese glass industry will eventually suffer from excess capacity and therefore turn to export markets to offset its deficit – can we really afford not to see China as an opportunity?

Environment

Our industry has not been waiting for Kyoto to become environmentally aware. Nowadays the energy required to melt a tonne of glass is less than 10% of what it took a hundred years ago. More recently since the 70s, CO2 emissions per tonne of glass melted have been reduced by more than 60%.

Buildings are one of the biggest consumers of energy. Industries producing insulating products and, in particular the flat glass industry, with its new advanced insulating glass units can do more than just reduce their energy consumption. They can also contribute to a significant reduction in construction-related emissions. The figures clearly show that replacing ordinary single or double glazing with low-E double glazing leads to CO2 reductions which by far outstrip the emissions incurred at the production stage of all types of flat glass for the construction sector.

• Manufacturing one square metre of low-E double glazing leads to the emission of 25 kg of CO2.
• On the other hand, the CO2 saving by replacing one square metre of single glazing with low-E double glazing represents 91 kg CO2 per year.
• In other words, the CO2 emitted during production is offset after 3.5 months of use if you replace all single glasses with low-E glasses. It is offset after 10.5 months if basic double glazing units are replaced with low-E double-glazing.

With the Kyoto target date approaching fast, the sooner ordinary glazing is replaced, the sooner the Kyoto objectives will be reached.

Products

It is safe to assume that whatever new functions are created, coatings will continue to provide us with solutions.

Most of the coatings we see today are passive which means that they only reduce light and/or heat. Coatings of the future will be increasingly intelligent, as is the case with electrochromic, photochromic, thermotropic and thermochromic glasses that react to external influences and have the ability to adjust the amount of light or energy passing through glass automatically.

Coatings of the future will also be increasingly active as already initiated by photovoltaic glasses, which absorb the sun’s heat, store and convert it into electricity.

You need a very product-oriented culture, even in an industrial and technology-oriented company to innovate. R&D, manufacturing and marketing must all work together but marketing should be the primary driver. Once you have achieved that, the marketing experts become the driving force in expanding your business. The in-depth market knowledge of those marketing specialists is essential for creating products.

Companies need to devise commercial strategies to position their products clearly and correctly. Technical values or benefits need to be real. Sustained innovations are essential to delay the copying process – or at least they help postpone the copying process long enough to prevent some of our added value products from turning into commodities too fast.

A company can realise higher levels of competitiveness when it looks beyond its own limited capacity. It must strategically partner with other companies offering other competencies. Those companies might be local suppliers, infrastructure providers, educational institutions, and other relevant agencies or companies to solve problems that it is unable to solve efficiently when operating as an isolated entity. This approach enables companies to overcome many of the limitations of size, improve efficiency and quality, cut costs, absorb training and new technologies, and improve market access.

Conclusion

Shifting markets provide us with constant opportunities to refine or even rethink our positions and our value chain. Addressing them involves much more than innovative glass products. It involves the willingness to break the mould and challenge our positions. It involves a strategic willingness to take the risk, a determination to dare and to invest in particular areas, product lines, partnerships and areas of expertise.

The focus now is on relentlessly learning, adapting and changing. Such are the keys to higher-order evolutionary change.

Adapted from Arthur Ulen’s opening address at GPD.