Glass Prices Set To Face Perfect Storm

• Browse By Section
• News
• Glass Prices Set To Face Perfect Storm

The UK glazing industry is facing a perfect storm of surplus glass and continued inflation, warns Cornwall Group’s chairman Mark Mitchell, which could put a strain on cash flow.

“Price rises from all quarters are adding pressure to companies’ finances,” says Mitchell. “Much of which we’ve talked about previously, yet we are starting to see inflation on top of inflation which, in some cases, isn’t being passed through the supply chain via price increases. This is putting pressure on cash flow.

“Everything is still going up. Businesses are paying 20% more for water; they are paying 20% more for business rates; they are paying two to three times more for energy; payroll costs are up; borrowing costs have doubled in the last quarter; and corporation tax is going up. Each of these factors is eating into the precious margin we put on our products.”

China and Turkey

For some businesses, one way of controlling input costs is to capitalise on the influx of glass entering the UK from abroad, particularly China and Turkey. Reduced global shipping costs and redundant European float lines are making Europe an attractive market for Chinese and Turkish glass manufacturers. While the immediate benefit is lower raw material costs, overall it is a double-edged sword, warns Mitchell: “We are definitely seeing a change in the landscape when it comes to glass. The last five years have been characterised by short supply and high demand, which have pushed up prices but since Christmas we have seen a lot of product arrive from overseas. This is offsetting attempts to keep margins up – and we need healthy margins because they feed back into new machinery, training new employees and product innovation.”

Perfect storm

Mitchell adds: “Many companies are joining the race to the bottom on price. Unfortunately, this is being fuelled to some extent by companies backed by private investors, who are looking for healthy growth over a short period.

“We take a different view. We have a strategic ten-year outlook, which encourages us to invest regardless of the immediate pressures the business is under. This, ultimately, means we can maintain product quality, lead times are reduced and our product portfolio is bang up to date.”

Investment

Cornwall Glass Manufacturing recently installed a new heat soak oven at the company’s site in Plymouth and has also invested in a £1.5 million Bystronic sealed unit line at its St Austell site. The new line, which is designed to manufacture triple-glazed units, incorporates online silicone and polysulphide application, alongside gas filling, speeding up the process and maintaining high quality standards.

Picture: The famine to feast outlook for glass has some benefits but mostly downsides according to Cornwall Glass’ Mark Mitchell.

www.cornwallglass.co.uk

Article written by Cathryn Ellis
10th May 2023

Share

Related Articles