Hindustan National Glass and Industries Limited to Double Capacity in Three Years

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Researched by Industrial Info Resources India (Delhi, India)--The glass industry in India is worth about $2.5 billion and has shown consistent growth in the past few years. This growth is fuelled by demand in infrastructure, construction, automobiles, food processing, beverages, pharmaceuticals and cosmetics. The automobile sector is a big user of flat glass, while about 60% of the production from float glass is used by construction sector. The demand for flat glass has increased at an average annual rate of 12% to 13% in past two to three years.

Hindustan National Glass and Industries Limited (BSE:515145) (Kolkata, West Bengal) is one of the frontrunners in the glass packaging sector. The company plans to double its capacity in the next three years through greenfield and brownfield projects worth $555 billion. The company has entered into technological collaborations with companies like Emhart Glass (Cham, Switzerland), Heye Glass (Obernkirchen, Germany), Pennekemp (Ennepetal ,Germany), and Horn Glass Industries (Ploberg ,Germany). The company expects the profit margins to grow significantly with the increase in capacity, better operating efficiency, economics of scale and installation of natural gas-fired power generators.

The company has a 6%-7% share in the glass packaging sector and is looking for additional opportunities there. The per capita consumption of glass in India is just 1.4 kilograms per person, as opposed to 27.5 kilograms per person in the United States and the United Kingdom. India's glass use will grow considerably in the coming decade due to rapid industrialization, urbanization and consumption.

There will be many sectors that will be drivers of growth for the glass packaging industry. The increased trend of social drinking will increase the liquor sector about 13%.The food processing industry has grown at an annual rate of 13.7% in past four years and is expected to grow 12%-15% in next three years. The domestic cosmetics and toiletries segment is growing at 15%-20% per year, and the current industry size is $950 million. This will increase to $1.4 billion in three years time. All of these factors have created a huge marketing opportunity for the company.

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