After battling plunging margins and idle capacity triggered by the slowdown in the construction sector over the past 8-9 months, the Indian glass industry is now looking for options to help it weather the economic crisis. Most small and mid-sized firms in the sector are reviewing their business models, while many others are also foraying into other segments to stay afloat during tough times.
Contrary to the earlier days, when SME units in the glass industry focused on just a single line of business for growth, today, an increasing number of companies in the sector are thinking of diversifying.
Adding value
The adverse impact of the global economic deceleration on the real estate industry – the biggest consumer of glass and glass products – has prompted small and mid-sized glass units to diversify into various segments like furniture, murals, interior decoration and other such products.
“With construction in the doldrums, the net growth of the glass industry has taken a hit. The glass industry, which was growing at about 20% over the past 5 years, is now finding it difficult to sustain margins. Hence it has become imperative for the small players in the sector to shift a part of their production facilities toward products for less-affected sectors like furnishings, interior decoration and others,” said R Agarwal, Partner of AK Glass Industries in Nagpur, which is a member of the All India Glass Manufacturers’ Federation.
Some small-scale glass manufacturing units have already made plans to introduce digital printing on glass, given that the market potential for this is tremendous. Many in the industry are also looking at ways to step up their supplies to the home furnishings sector in the coming months.
“Small units are making investments to adapt their glass products to the needs of other industries and are adopting new technologies for better production. We anticipate that the spends will rise in the ensuing quarters as more and more units diversify their product lines,” said D Gupta, spokesperson, Aditya Tools, a small-sized glass manufacturing and supplying company in Kolkata.
The trend to diversify is significant for the Indian glass industry as foraying into other sectors is likely to help it reduce its dependence on the construction sector. It is also likely to encourage more SME glass units to make sustained efforts to increase value addition.
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