Glass industry on the verge of collapse due to gas supply disruption

The winter season of 2009-10 would be decisive for the glass industry, as it would decide either there would be any glass production in the country in future. The glass industry has suffered badly in the last four years due to suspension of gas supply, said Pakistan Glass Manufacturers Association Chairman, Tariq Baig in an interview with Daily Times on Friday.

He said that the supply of gas by the SNGPL is halted as soon the winter starts thus leaving no choice for the glass producers but to close their units. He said that all other industries including textile can survive without gas but the glass industry is totally different from them.

Baig said that while manufacturing glass products, the furnace is heated at 1,500 degree centigrade and without gas it is not possible to light furnace. "Gas is not our raw material, as it is in fertiliser sector but it is basic input in producing glass products," he said.

"One furnace costs at least Rs 200 million and as soon temperature drops, the furnace collapses," he said adding that each industry had more than three furnaces but now the count has decreased to one to two. "Earlier there were more than 20 units but now the count has dropped less than 10," he said.

Ghani said that total investment in the sector is estimated to be more than Rs 18 billion and in the couple of years, the sector produced glass products worth Rs 15 billion.

"However, with the closure of gas, the production dropps by more than 50 percent," the chairman said.

The production capacity of glass products ranges between 100 tonnes to 200 tonnes per day. Out of the total 16 units, around 73 percent are situated in Punjab, 19 percent in North West Frontier Province (NWFP), 5 percent in Sindh and 3 percent in Balochistan. The gas supply in Punjab and NWFP has been severely disturbed in the last five years thus leaving no choice for the industry but to close down or reduce its production.

He said that glass industry converts minerals like silica sand and soda ash (worth Rs 1,500/tonnes) into high valued products in the range of Rs 30,000 to Rs 45,000/tonnes. "All the raw material is cheaper and easily available but only gas is scarce item and makes the whole production expensive," Ghani said adding that despite the fact sector is also contributing toward import substitution through saving millions of rupees by producing high and low quality glass products but even then the authorities are not ready to give leverage to the sector.

He said demand for glassware has shown a rising trend due to the increase in population and to rising income among the buying segment of the population. The production of tableware stands at 30,000 tonnes annually while the demand has increased to 35,000 tonnes. He said that the gap in demand and supply is met through the import of high quality glassware items that are currently not manufactured in the country.

He said that high production costs in Pakistan are a major obstacle preventing glassmakers from being competitive in the international market. He said that if the industry is only given smooth supply of gas then the manufacturers have the ability to compete any country. "I am not asking for subsidy or support, all I need is smooth unabated supply of gas in the winters and if we don´t get it this year then there would be no glass production from the next year," he lamented. He said that the government will lose billions of rupees in lost revenue and lost jobs, while our consumers will spend foreign exchange to import glass products.