CHINA AND ITS GLASS MARKET

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Esmond Hamilton
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CHINA AND ITS GLASS MARKET glass market 39-45 Working with China from the western point of view.

lighting glass In this dossier, we are going to take a look at China, speaking about companies working both for the domestic and international markets.

1 CHINA AND ITS GLASS MARKET glass market Working with China from the western point of view.companies respond to our questions Chinese glassworks Anhui Junding Glassware: everyday glassware Guandong Huaxing: bottle and jars Jinan C-Flying Industrial Group: pharma, borosilicate and lighting glass In this dossier, we are going to take a look at China, speaking about companies working both for the domestic and international markets. We spoke to some of our clients, who gave us straightforward answers to five simple questions about the Chinese glass sector. We are also presenting a few smaller Chinese glassworks to give an idea of how they work with the global glass community. Rockwood & Hines: glass bottles Shangong Pharmaceutical Glass: pharmaceutical glass packaging

WORKING WITH CHINA FROM THE WESTERN POINT OF VIEW T HE CHINESE GLASS SECTOR In China, the glass products sector is generally divided into container glass, tableware glass, and insulated containers,

2 WORKING WITH CHINA FROM THE WESTERN POINT OF VIEW T HE CHINESE GLASS SECTOR In China, the glass products sector is generally divided into container glass, tableware glass, and insulated containers, where the container glass segment includes bottles for alcohol and other beverages, pharmaceutical and cosmetic bottles, etc. Container glass takes up the vast majority of this sector at 93%, where beer and alcohol bottles take up 20% of container glass, or almost 19% of the entire daily-use glass sector. Bottle making machinery upgrades account for the majority of demand in the daily-use glass sector, calling for higherefficiency, automated equipment. Here multi-segment and multigob machinery are the direction for bottle making machinery developments. DAILY-USE GLASS Daily-use glass as termed in China is tableware and insulated glass, including alcohol bottles, pharmaceumetic bottles, etc. Container glass occupies 93% of China s total glass market

3 Commersald HOW DOES YOUR COMPANY CONSIDER THE CHINESE GLASS MARKET AND HOW MUCH DOES IT EFFECT (PERCENTAGE) OF YOUR COMPANY S GLOBAL TURNOVER? COMMERSALD: The Chinese market has gained considerable importance for Commersald due to its potential and, at present, represents 20 per cent of our global turnover regarding sales of machinery for the glass sector. EMHART: The sustained austerity drive by the Chinese government results in less alcohol consumption and therefore less glass containers. The new emphasis on environment protection obliges glass plant owners to put their new investments on-hold as they need more time to assess the situation. The glass container market is probably flat. The effect on our company s global turnover is negligible, the effect on our company s Chinese turnover is about minus 10 per cent. EMMETI: Emmeti will, this year after six years of absence be present at China Glass. And if it s true that during these six years Emmeti has continued to monitor this market carefully, the company did not, until now, consider more intense marketing activities necessary. In China, mechanical or automatic lines have never been, for glassworks, essential, due to many different facts: low cost labour, lack of export requests (which require much higher quality standards than those for the domestic market), low speed of the production lines, poor quality packaging materials, etc. HEYE INTERNATIONAL: We see strong growth potential and we are working on many interesting projects. Share: 10 per cent, rising tendency. KYP: The Chinese glass market represents 20 per cent of KYP s global turnover. Emhart

Emmeti segment requires low cost machinery; second-hand or basic, small, new machines. OCMI: Without going into percentage details, OCMI s interest in the Chinese market, right now is considerable.

4 Emmeti segment requires low cost machinery; second-hand or basic, small, new machines. OCMI: Without going into percentage details, OCMI s interest in the Chinese market, right now is considerable. This is due to strong ongoing growth of the pharmaceutical glass market, which is also pushing small- to medium-sized companies to invest and look towards the international market. Attention is concentrated on historical clients and those who already work with the glassworks, but also on potential clients that are considered an important opportunity in this really vast market. OCMI focuses on the most important glassmakers for household glass items and stemware, for which it offers reliable and tried and tested solutions. SPAMI: The Chinese market has great potential, and for this reason here at Spami we are focussing on its needs and demands, even if it is not such as important part of our turnover at the moment. ZECCHETTI: The percentage of Zecchetti s turnover dedicated to the Chinese market is 5 per cent. WHICH TYPE OF MACHINERY DOES THE CHINESE MARKET REQUEST: LAST-GENERATION, MORE ELEMENTARY MODELS, SECOND-HAND, ETC.? and, if possible, the most complete and up to date models. EMHART: The Chinese market has various segments; high-end, mass and niche. Different segments have different requirements for different machinery. The high-end segment is rather small and demand for machinery is not so different from other countries. The mass market is the biggest and needs basic and reliable machines. The niche segment is also quite large because the Chinese glass market is rather segmented. This niche EMMETI: Apart from these situations, Chinese glassworks mainly use domestic-built machinery for areas where a minimum of automation is needed, such as transport, inspection and packaging of finished products. Even if this type of machinery does not have quality and reliability levels as those of European machinery, the cost is about three times less! HEYE INTERNATIONAL: Heye offers last-generation machines for high quality production at high production speed. This is the only way to fulfill the important requirements of the big global brand owners. COMMERSALD: Chinese companies do not want or accept simple models and certainly not second hand machines. They want the best Zecchetti

KYP We think that in China there is great NNPB potential. Heye, as the inventor of the NNPB process, is specialized in NNPB production and is presently bringing NNPB to China in several projects.

OCMI: On some last-generation machinery, especially with regards to visual inspection of pharmaceutical containers during production, needs are becoming more standardized.

5 KYP We think that in China there is great NNPB potential. Heye, as the inventor of the NNPB process, is specialized in NNPB production and is presently bringing NNPB to China in several projects. KYP: We receive demands for new machinery, last generation, and second hand as well. In all situations we are speaking about the latest technology. OCMI: On some last-generation machinery, especially with regards to visual inspection of pharmaceutical containers during production, needs are becoming more standardized. In general, requests do not depend on mentality but on investment possibilities. The market seems to be moving towards automation that reduces operator intervention to a minimum. In terms of pharmaceutical glass automatic loaders for glass tubes we are speaking about different types of control by means of camera and automatic packaging. The request for second-hand machinery in China is almost nil right now, and seems to be more used by smaller companies. SPAMI: China is looking for last generation and full-optional machinery. And here we have an important advantage as we supply complete turnkey plants, which also include top-level training. ZECCHETTI: We are mainly contacted by glassworks that require high quality standards. These companies work mostly for exports and consequently need to guarantee high quality performance. WHAT KIND OF SALES AND POST SALES SERVICE DOES THE MARKET LOOK FOR, AND WHICH ARE THE BIGGEST DIFFICULTIES ENCOUNTERED DURING INSTALLATION AND ASSISTANCE? COMMERSALD: If you don t have a good sales contact able to use the Chinese language you will certainly have problems due to the difficulties and unexpected situations that can happen. In any case, you can have the same problems during post-sales assistance that you have in any other market it all depends on the Spami

person and company you are working with. EMHART: They need normal installation, commissioning, spare parts and after sales trouble-shooting services like any other countries.

6 person and company you are working with. EMHART: They need normal installation, commissioning, spare parts and after sales trouble-shooting services like any other countries. EMMETI: During recent journeys to China, Emmeti saw that the situation had changed positively and, at present, exports have increased considerably: South Korea, Malaysia and Thailand first and foremost. Glassworks have therefore had to adapt to quality standards much higher than domestic levels and, thanks to exports, they have accounts in foreign currency that enable them to deal directly with international markets without going through the PBOC (private banking was authorized in China as of January 2014). The domestic market has, in any case, grown, and internal quality standards have increased. China is starting to take over glassworks that were once owned by important international groups (Owens-Illinois now only has two glassworks). Interest and demand for automation and reliability of machinery has increased (which Chinese machinery manufacturers are not yet able to guarantee), closely connected to the introduction of high-speed lines. The gap between Made in China machines and imported machinery has decreased. Heye Moreover, language barriers have almost disappeared, and it is now possible to communicate directly with potential clients in English. HEYE INTERNATIONAL: We are working with a local partner who has close contacts with all our customers. Our customer satisfaction is very high. KYP: The Chinese market looks for turnkey solutions. The main problems we encounter regard the lack of the right infrastructures. OCMI: Difficulties in assistance and installation can depend on personnel, which are now usually well trained and experienced in the different processing phases. With regards to new or smaller companies, operators are sometimes at their first work experience with glass and still do not know all of the fundamental aspects such as the maintenance of production lines, which has a direct effect on the lifetime of the equipments and quality of finished products. The Chinese market needs to be continuously monitored with regards to on-site technical assistance and the supply of spare parts, because this, in turn, can make or break long-term relationships with clients. SPAMI: Post sales service is particularly important for clients, and Spami is working to create a team of Chinese technicians in the country. This will give us the advantage of being fast and efficient, while overcoming difficulties connected to language.

ZECCHETTI: We are normally requested to offer engineering services that is to give recommendations and to work alongside customers for a long time.

7 ZECCHETTI: We are normally requested to offer engineering services that is to give recommendations and to work alongside customers for a long time. This is due to the fact that personnel does not usually know everything about the equipment. And for this reason, they often require an extension of Operator Training sessions. Another important difficulty we find regards communication (language, customs and traditions). IS THE PRODUCTION OF YOUR (CHINESE) CLIENTS AIMED MAINLY AT THE DOMESTIC MARKET OR EXPORT (PERCENTAGE IF POSSIBLE)? COMMERSALD: I don t really know the percentage of sales dedicated to domestic and international markets regarding my clients but I often see their products here in Europe and their quality is often very similar to that of products made here. EMHART: A small segment of their production is dedicated for export, but it is mainly for the domestic market. EMMETI: At present, Emmeti/Sipac have six installed lines for automatic transport and packaging (two furnaces) at Sichuan Malaya Glass (SMG), in Sichuan, with production dedicated mainly to wine and spirits. The following link to SMG speaks briefly about Emmeti s machines: EnAboutus.asp?Title=Inspection and Packaging. HEYE INTERNATIONAL: Mainly the domestic market >80 per cent. KYP: Our customers produce mainly for the domestic market, with a percentage of 90 per cent. OCMI: Right now, most of our Chinese clients dedicate a part of their production for export, which can change as per their production capacities, technology level and quality of raw materials. OCMI glass tube lines in China are mostly for the production of high quality containers for export. The installation of dimension control systems, those regarding moulds or cosmetic features, confirm that focus is more and more on increasing quality to respond to the needs and demands of the markets. SPAMI: Production is mainly dedicated to the domestic market, even if there is no lack of interest in exports. ZECCHETTI: Being dedicated to exports, they need to guarantee high quality performance. IS THERE ANY OTHER INFORMATION THAT YOU DEEM IMPORTANT AND USEFUL? COMMERSALD: China is a fast and strongly growing market with enormous potential. It therefore is a highly attractive opportunity for European companies looking for new markets to explore and enter. KYP: The Chinese market is focused day by day more and more on exportation, although at present, its main production is for the domestic market. OCMI

chinese glassworks ANHUI JUNDING GLASSWARE: Anhui JunDing glassware Co., Ltd. is located in China s largest daily glass production base Bengbu with convenient transport connections.

8 chinese glassworks ANHUI JUNDING GLASSWARE: Anhui JunDing glassware Co., Ltd. is located in China s largest daily glass production base Bengbu with convenient transport connections. The company mainly provides customers with comprehensive products such as machine pressed cups, blown cups, glass candle holders, wine glasses, drinking glasses, ice cream bowls, glass plates, glass bowls, glass candy jars, glass vases, wind lights, beer glasses, glass cups, home decoration, candlestick holders, tea light holders, votive holders, hurricane candleholders, pillar holders, beverages, shot glass, glass tumblers. everyday glassware Additional products and services supplied by Anhui JunDing glassware include fully automatic printing decals, spraying, sandblasting, flocking embossing, internal and external electroplating, laser engraving, internal and external hollow out frosting, processing of auxiliary services. ANHUI JUNDING GLASSWARE CO.

GUANGDONG HUAXING: GUANGDONG HUAXING GLASS COMPANY www.hxbl.

9 GUANGDONG HUAXING: GUANGDONG HUAXING GLASS COMPANY bottles and jars Guangdong Huaxing Glass Company is a private glass company which produces bottles, jars and containers for everyday use in high flint, commercial flint and emerald green glass. Company headquarters are located in Wuzhuang Industry area Luocun Nanhai District Foshan City, Guangdong Province, covering over 200 square metres. The company has an experienced management team and production workers, of which 800 people are with the senior management team and technical team. Huaxing Glass employs competent people and advanced equipment to provide products and service with high quality, at ten function centres and 13 plants, including Nanhai, Gaoming, Sanshui, Changcheng, Zhejiang, Daye, Zhengzhou, Suqian, Yongqing, Shihezi, Yuanjiang, Anshun, with multiple production lines for food, beverage, sauce, wine, medicine and cosmetic glassware. The company s glassware is sold to Hong Kong, Macao, Southeast Asia, America and Canada. Huaxing Glass uses doublegob production lines for bottles and jars which are computercontrolled, along with automatic self-controlled system for furnaces, and electrically/gas heated technology for tunnel and coldend/hot-end coating. All types of bottles from 25g to 1,000g are available with any shape or in any quantity. Advanced Double-Gob production lines and Multiple-colour printing machines are used for the manufacture of pressed glass containers with irregular shapes, while drinking glasses and printed glass can also be made. Huaxing Glass Quality Assurance System was set up according to ISO 9002:1994 in May 2000 and its Quality Management System has been set up and improved, enabling quality inspection process to develop quickly. This, in turn, improves the quality of products and service. The same Quality Management System was improved according to ISO9001:2000 in October 2002 and passed the thirty-party audit in December HACCP was introduced to the company in 2003, which was run for nearly a year and the thirty-party audit was passed in November 2004, making Huaxing Glass the first company in the industry to pass HACCP. The company has a series of other approvals and certifications that enable it to continue providing products and service with high quality.

chinese glassworks JINAN C-FLYING INDUSTRIAL GROUP: pharma, borosilicate and lighting glass Jinan C-Flying Industrial Group, founded in 2000, is located in Jinan, Shandong province.

10 chinese glassworks JINAN C-FLYING INDUSTRIAL GROUP: pharma, borosilicate and lighting glass Jinan C-Flying Industrial Group, founded in 2000, is located in Jinan, Shandong province. The company has about 10 years experiences of production, research, sales, export, mainly in the pharmaceutical glass, borosilicate glass and lighting glass fields as our main production series. The company is the main manufacturer of the above products in the Chinese domestic market, with products including pharmaceutical neutral glass tubes, tubular vials, moulded glass vials, ampoules, rubber stoppers and tear-off caps, borosilicate clear and coloured glass tubes and rods, glass cylinders and borofloat glass sheets, as well as lead glass tubes, and lead-free glass tubes. With advanced machinery, a professional research team and stringent quality-control department, Jinan C-Flying Industrial Group exports to the United States, Germany, United Kingdom, Canada, Mexico, India, Thailand and some Southern American countries. Company products: Pharma glass Neutral glass tubes (COE 5.0) Neutral glass tubes (COE 7.0) Tubular glass vials Moulded glass vials Glass ampoules Closures and caps Butyl rubber stoppers Freeze-drying stoppers Plastic-alu caps All-alu caps Borosilicate 3.3 glass: Boro 3.3 clear glass tubes Boro 3.3 clear glass rods Boro 3.3 coloured tubes and rods Boro 3.3 glass cylinders Glass joints Lighting glass: Lead-free glass tubes Lead glass tubes Soda-lime glass tubes Lead bead glass tubes Lamp chimneys Laboratory glass: Lab glass JINAN C-FLYING INDUSTRIAL GROUP

ROCKWOOD & HINES: ROCKWOOD & HINES GLASS GROUP LTD., www.rockwoodglassfactory.net glass bottles Rockwood & Hines Glass Group Ltd.

11 ROCKWOOD & HINES: ROCKWOOD & HINES GLASS GROUP LTD., glass bottles Rockwood & Hines Glass Group Ltd., a joint venture between a French- and a Chinese manufacturing company, is the largest glass bottle factory in China with 16 furnaces, 12 fully automatic lines and 10 semi-automatic production lines. The company produces super flint glass bottles of the highest quality, comparable to those supplied by well-known European glassmakers. High quality, flexibility, reactivity and competitive prices have enabled Rockwood & Hines to become one of the top glass manufacturers in the world, with exports going to major companies in the United States, Europe, South America, Japan, Middle East. Key advantages: 1. super flint glass quality to 28mm crystal clear glass slug at the bottom 3. embossing or debossing name or logo in the glass 4. Minimum quantity for custom-made bottles: 20,000 bottles; (the bigger the order the lower the price) 5. Serigraphy or silk screening, frosting, spray paint and sand blasting available. Those who are not interested in a personalized mould can also choose from the standard bottle catalogue, with bottles that carry a minimum order of 6,000 bottles only. These are supplied in any shape or size, from 50ml to 1.75L. Glass decoration techniques available include: Hot stamping - Embossing/Scalloping - Serigraphy - De-bossing - Colour Spray -Mosaic glass - Frosting/ windows - Diamante studs - Sand blasting - Labelling - Customized bottles.

chinese glassworks SHANDONG PHARMACEUTICAL GLASS: pharmaceutical glass packaging Shandong Pharmaceutical Glass is the largest manufacturer of pharmaceutical glass packaging in China.

12 chinese glassworks SHANDONG PHARMACEUTICAL GLASS: pharmaceutical glass packaging Shandong Pharmaceutical Glass is the largest manufacturer of pharmaceutical glass packaging in China. The company was established in 1970 with a registered capital of approximately USD 34,781,096 and gross assets valued at over USD 200 million. Shandong Pharmaceutical Glass uses advanced manufacturing technology and expertise to manufacture containers used for the storage and use of medicines, vaccines and other pharmaceutical preparations, such as: Moulded injectable vials, USP type I, II, III Glass tubing, USP type I Ampoules, USP type I Tubular vials for injection, USP type I Amber glass bottles Infusion bottles Cosmetic bottles (nail polish and perfume) Small food and beverage bottles Butyl rubber stoppers AL-plastic multi-caps Accessories for dropper bottles Prefilled glass syringes Dental glass cartridges The range covers nine major series of 500 products with differing specifications. These include moulded glass vials and bottles conform to USP Type I, II, III. The annual production of Shandong Pharmaceutical Glass leading products reaches more than 9 billion items. Company products are sold to more than 1000 medical enterprises in China, to many provinces, cities and autonomous regions as well as Taiwan. Shandong Pharmaceutical Glass exports to more than 65 countries, such as Korea, Pakistan, United States, Mexico, Spain, India, Philippines, Italy, Middle East Countries, Thailand, Vietnam, Syria, etc. The company has taken the lead in China by being the first to pass both ISO9001 quality management system inspection, and ISO14001 environment management authentication. Shandong Pharmaceutical Glass is a listed company on the Shanghai Stock Exchange. SHANDONG PHARMA- CEUTICAL GLASS

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