Home Business Flat glass production jumped by 14.4%. But it is alarm about energy costs

Flat glass production jumped by 14.4%. But it is alarm about energy costs

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«We are witnessing a very strong acceleration in prices, I would say almost uncontrolled: in the last month there have been price lists updates every 4-5 days. We have been seeing monthly increases for a year now, but in October the situation precipitated, with an increase in raw materials of 35% compared to September ». Daniele Predari, president of the flat glass processing section of Assovetro, avoids alarmism, but does not hide the possible long-term effects of the increase in raw material prices on the flat glass processing sector, which is also experiencing a very positive market phase.

The sector, which in Italy is worth about 880 million euros, expects a turnover up 14.4% by the end of the year, thanks above all to the boost of energy bonuses for residential construction, from which 80% of the current one comes. request. “In 2020 the decline was 4.6%, so we are well above the values ​​of 2019, with a growth of about 10% – observes Predari -. And this trend should also be confirmed next year, when we expect a further increase of 7.8% ».

The fear, however, is that the rise in the prices of raw materials (largely due to the increase in the price of gas used for the production of glass) and of the electricity needed for processing activities (+ 239% in one year for companies that use over 1,000 kilowatt hours) can not only compromise the growth of the sector, but also squeeze the margins of processing companies to the point of causing losses and, in the long term, even solvency problems.

Some data to frame the context: the glass supply chain in Italy is made up of a myriad of small and very small companies (with an average turnover of 5 million euros) that buy the raw material from a limited number of large producers, all foreign ( even if someone has factories in Italy). In the last month, manufacturers have revised upwards more than once the price of basic components used by processing companies (in addition to glass, also metals and plastics), which in October increased by an average of 35% compared to the previous month. As for glass alone (which accounts for 55-60% of total production costs), in one year the prices increased by 50-70% for some types or even doubled in the case of basic glass.

“The problem is that our companies have no room for negotiation with suppliers nor do they have alternatives, since it is an oligopoly of producers”, explains Predari. Many agreements are therefore skipped, in the sense that the suppliers have imposed the increases, but not all companies are able to pass the increases downstream. «Working mainly with the construction sector, which has very long deadlines, many existing contracts were signed a year or two ago – observes Predari -. If our companies fail to impose the increases that they in turn are forced to accept from their suppliers, the paradox is that

are found
to work a lot, but in many cases at a loss. And this, in the long term, could create solvency difficulties for some companies ». Currently, in fact, the sector benefits from the construction boom and from the calming effect linked to tax bonuses (to obtain the concessions, advance payment is required, which involves a large injection of liquidity into the system), but in the medium-long term period, the risk is that companies that have not managed to reverse the increases suffered “upstream” on the market may find themselves in difficulty.

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