Stability characterises Italy: glass concludes its special series examining the glass...

Italy is one of the big four economies in Europe and has a strong industrial and manufacturing base. Like all economies in the world, Italy's has been hit by global economic and political problems and it has been fighting to keep on the growth track. It grew by 0.4% during 2002 and estimates

And glass consumption has been static for several years, around 4.4 billion tonnes or 77.5kg per head.

But not only are its glass manufacturers holding their own, but so are its many suppliers of glassmaking machinery and equipment. In 2002, production and consumption of glass packaging in Italy were stable for most types of container, showing that glass has been adapting and changing to meet the demands of modern consumers.

Glass is mainly used to package liquids, foods, vegetables and meats. In other sectors, such as perfumes and cosmetics, glass is recognised as signifying luxury or top of the range products. Italy has moved with the times, and most producers of glass packaging have used press-blow production techniques to make their products. This has been significant in lightweighting of containers, with container weights being cut by 10-20% over the past few years.

In 2002 Italy's glass packaging factories produced 3.33 million tonnes of glass containers, more of less equal to the figure for 2001. Allowing for the economic and political problems around the world, industry experts believe this shows a very positive trend.

This is despite a big fall in sales of convenience goods and fresh foods where glass packaging is prominent. Consumption of glass food and drink containers has risen slightly but that of pharmaceutical and cosmetics-perfumes containers has fallen.

Exports account for around 10% of Italy's total glass packaging production, while 11% of domestic demand is met by imports. Domestic consumption in 2002 was 3.26 million tonnes.

INITIATIVES

Glass packaging consumption in Italy fell in the late 1980s and early 1990s but has since improved, supported by a series of initiatives made by glassmakers and trade associations.

The main markets for bottles and jars in Italy are the drinks, foods and preserves producers. Within these sectors are sub-markets which are if a themselves big users of glass packaging.

Wines and sparkling wines alone take 41% by weight of glass packaging consumed in Italy. And demand for glass by this sector has grown with increased demand for DOC wines and for wine for export. There is growth in wine boxes and bag-in-box packaging tot wines, but these are tending to replace casks and carboys rather than glass bottles.

Mineral waters account for 18% of the glass packaging sold in Italy. After a long and steady downward trend, glass appears to have stabilised its position in this market. There is growing demand from hotels, restaurants and cafes for personalised glass bottles with a resulting increase in the number of bottles being returned.

Italy's third biggest consuming business for glass packaging is beer brewing, which takes 14% by weight of the glass bottles sold in the country. Glass' position here is substantially stable, and could even improve if sales of bottled beer through new outlets such as sandwich bars start to replace draught beer sales.

Three other markets are establishing themselves as growing users of glass bottles. These are fruit juices; spirits and vermouths; and olive oil. Fruit juice accounts for 5.2% of glass packaging use and has seen recent very successful campaigns to rejuvenate glass packaging by shape and by colour to suit consumers' tastes. The position of glass in the juices sector in Italy is stabilising after years of decline, though it still faces strong competition from cardboard polylaminates and increasingly from PET.

GLASS REIGNS

Alcoholic spirits and vermouths take 6% of the glass packaging sold in Italy. Glass still reigns supreme in this sector so future demand relies entirely on the demand for these products both in Italy and overseas.

Olive oil uses 5.8% by weight of the glass packaging demanded in Italy. Glass holds the lion's share of the market tot domestic sales of olive oil, whereas for exports it faces strong competition from cans. Tomato products, including pulp and puree, are another big user of glass packaging accounting for 6% of demand.

All told, these seven sectors account for 96% of the glass bottles sold in Italy. The remaining 4% are used for syrups, vegetable oils and so on.

Consumption of glass jars, and their penetration of markets, is growing in Italy. Around 40% of glass jars sold are used for preserved vegetables; 13% for fish preserves; 14% for sauces and so on; and 18% for homogenised foods. The remaining 15% of glass jars are consumed for spreads, paces, honey and yoghurt where they compete with many different packaging materials. Most glass jars use twist-off tin caps.

The cosmetics/perfume and pharmaceuticals industries in Italy take a massive 92% of all tube glass vials and small glass boules used in Italy. Laboratory equipment and fancy goods account for the test.

Cosmetics alone takes 62% of the production of flaconnage, where glass holds a position of clear supremacy. Small glass bottles are also used tot nail varnish and solvents, and for creams. Creams are increasingly being sold in plastic packaging.

Around 30% of the hollow glass flaconnage bottles sold in Italy are used for pharmaceuticals. Plastic is the main alternative to glass in these markets but its growth has slowed down in Italy and has been limited so for to ophthalmic products and salves. Flexible metal tubes have also made some impact here. A lot of the market share of glass depends on which treatments are in vogue; for instance demand for intravenous products, largely packaged in glass, is a big influence on total glass packaging demand in the pharmaceuticals sector.

Pharmaceuticals take 56% of tubular glass sold in Italy, two thirds of that for vials and the rest for small bottles. The remaining 34% of tubular glass is for cosmetics vials and for laboratory bottles and test tubes.

The main producers of glass containers in Italy are Bormioli Rocco; Vetro Abruzzo, part of Avdagh; AVIR, an Owens-Illinois affiliate; Saint-Gobain Vetrerie Italiano; and Zignano.

Tableware and crystal are being affected by changing habits among consumers and by imports from outside Europe. But glass still accounts for nearly 30% of all sales of tableware in Italy and growth has been boosted until recently by growing tourism and the resulting increased demand for replacement tableware from hotels and restaurants.

But consumers are becoming less formal in their eating habits, a trend which threatens to cut tableware buying in general and glass tableware in particular. And the global political situation has cut international tourism in most parts of the world, helping cut back demand for glass tableware from the catering and hospitality industries.

Exports when Italy had its own lira currency did well because the currency was relatively weak, but the strength of the replacement Euro has caused some big problems. Tableware makers face big and growing competition from the Middle East, in particular Egypt and Turkey; and from the Far East, notably China and Indonesia.

Bormioli Rocco of Italy is Europe's second biggest maker of glass tableware, behind Arc International. During the late 1990s it went on a buying spree to increase its business. Its acquisitions included the tableware businesses of Saint-Gobain in Europe; the French firm Verreries de la Chapelle; Crivisa Cristaerias; and RKL.

Also strong in this sector is Luigi Bormioli, a separate company which specialises in high quality glass tableware including drinks glasses. CALP is Italy's main producer of crystal, but declining tourism and changing habits have damaged sales in this sector as a whole. Overall hollow glass production in Italy grew 0.46% in 2002, with a 0.74% increase in bottle output; jars holding onto their output figure; but vials falling 2.42% and tableware output falling 1%.

Speciality glass output in Italy includes laboratory glass; television and electric glass. Saint-Gobain companies are Italy's biggest producers of glass fibre and glass insulating wool, a sector which saw decline from the late 1990s. Between 2001 and 2002, output fell 10.54%.

The main players in flat glass production in the country are Pilkington; Glaverbel which is part of Asahi Glass; and Saint-Gobain. Construction, a major market for flat glass, saw investment in Italy grow by 0.8% in 2002 and 2003 is expected to see further growth of 0.9%. Construction firms in Italy show very good profits at present.

Italy's automotive industry has had a difficult few years with question marks still remaining over the future of Fiat, the country's biggest carmaker. Its alliance with General Motors has been extended by a year, but Fiat's sales are still falling and were down by 6.8% in the third quarter of 2003 at a time when the western European automotive market as a whole was relatively steady. It sold 362,000 cars and vans during the third quarter, and says 2003 is expected to be a difficult and challenging year.

The difficult climate in the automotive sector, and the shut down of a float glass line for maintenance, led to flat glass output in Italy falling by 16% in 2002.

GIMAV, Italy's trade association for makers of glass manufacturing and processing machinery and equipment, said the sector closed 2002 on a positive note. After extraordinary growth in 2001, 24% over the previous year, in sales of equipment and the global turmoil in the first hall of 2002 all the signs were for a static if not difficult 2002.

Indeed, the first quarter showed signs of recession. But the situation started to turn round and sales grew stronger each month with few investments in large scale new plants but lots of smaller orders. The final analysis showed sales of hollow glass machinery in Italy grew 16.9% in 2002, while sales of flat glass machinery grew 11.1%. And exports of machinery built in Italy grew by 6.5%, mainly due to strong growth in flat glass orders; hollow glass machinery export orders fell slightly. Export sales took 72% of production.

But the situation remains uncertain. The year 2003 started optimistically with hopes for some modest gains but global events changed matters and consumers adopted a wait-and-see attitude, with resulting difficulties in sales. Vitrum, the Italian glass industry exhibition, saw visitors to its 2003 show fall though this was partly because of the change of date to June.

On the next nine pages you will find detailed information about some of Italy's leading suppliers of glassmaking machinery and equipment. You are sure to find a supplier who can help solve your problems.

CONTACT Istituto Italiano Imballaggio, Milan, Italy. Tel: +39 0258 319624. Fax: +39 0258 319677. Email: istituto@istitutoimballaggio.it; Website: www.istitutoimballaggio.it

GIMAV, the Italian association of glass machinery, accessories and special products, Milan, Italy. Website: www.gimav.it