Market dynamics have created the right opportunity for Arglass
Due to market consolidation, there are currently 41 glass container manufacturing facilities operating in the United States, down from over 120 plants in the early 1980’s.
The three largest players own 35 of the 41 plants and control, as measured by the number of units sold, over 90% of the U.S. glass container market.
FOCUS ON UTILIZATION
As the number of plants declined and total demand remained flat, capacity utilization in the remaining facilities has increased over time from ~75% to ~95%.
Incumbents have filled their plants with products that allow for long-run productions (i.e: beer), focusing on utilization above all else, leaving customer needs such as emergency batches, shorter runs and customized products, unattended.
As a result, customers with diverse product portfolios, along with the specialty and smaller-volume beverage and food producers, have to rely on imports, suffering from poor customer service and limited options for their glass container supply.
In 2018, imported glass containers represented more than $1.6 billion.
From 2009 to 2018, imports of glass containers have grown by 91%, at a 7.4% CAGR, with Chinese imports growing at 15.7% CAGR.
However, imports are not the ideal supply source, as they present logistic, quality control and customer service issues.