The past, present and future of the American, European and Asian flat glass markets

Many countries and companies are going through a difficult time due to the global economic crisis, and this difficulty is expected to continue this year. The domestic flat glass industry, which suffered many difficulties due to the economic downturn and recession last year, needs to accurately analyze the current situation to find problems and set the right direction to make the most of the opportunities. At the Hanglas New Year's Ceremony held at the Plaza Hotel in Seoul on the 15th of last month, Hanglas Chairman Denis Meus had time to share his views and visions on the global economic situation and prospects and the flat glass industry from a macro perspective with the attendees. <Editor's Note>

US and European market

Since the summer of 2011, the flat glass industry is facing a severe economic crisis. Many economists did not want to believe the prospect of a double dip after the 2009 economic crisis, but as a result, the global economic environment in 2012 worsened. "This situation is expected to continue until this year or 2014," said Chairman Denis Meuss.

Noting that Europe is still in a difficult situation due to the eurozone crisis, many experts predicted the euro and the collapse of the European community, but the reality was different. This is probably because the US and British media used the euro crisis as a device to hide their essential problems, so solutions to the economic crisis are likely to be approached in a political way rather than an economic one, and the euro crisis is expected to last until 2014. predicted. Although the political approach will take time, progress has already been made in 2012, and much progress is expected in 2013. A full recovery of the eurozone will take more time, but as a result, it is expected that it will be more resilient after the crisis.

Europe has a long way to go. Although some progress has been made in 2012, high public debt and high personal debt in some countries will remain a barrier to growth in many countries, including Europe, over the next few years. In the case of the US, the economic recovery is expected to take 4-6 years or more. He pointed out that the risk of a “fiscal cliff” was avoided, but rather, there were many challenges to be solved, such as the latent problem of a “larger cliff” between conservatives and progressives, and between the rich and the emerging poor in American society. The real estate market is also recovering little by little, but a full-fledged recovery is only expected in one to two years.

Asian market

The share of the Asian market in the global market remains high. In particular, in the wake of the recent global economic crisis, the importance of emerging and developing countries including BRICs (Brazil, Russia, India, China) as a new growth engine for the global economy is increasing. It is expected that there will be a move to overcome the export recession through

China, the world's second-largest economy, is currently undergoing restructuring, but further measures will be needed. In China, the economic crisis of 2011-2012 had a great impact on the real estate and construction industry, and there are also shock effects in various industries. China's cheap labor compared to other neighboring countries is now a thing of the past. In this situation, it is explained that China will focus on economic activities that can create more added value. However, he emphasized that the scale and absolute number of production lines for float flat glass, the basic infrastructure, still pose a threat to the world.

In China, when the new leadership system is established in 2013 and the stable price level continues, it is expected that policies to strengthen efforts to expand domestic demand and foster new areas of consumption growth will materialize. China's GDP growth rate is expected to reach 7.8% in 2012 and 8.5% in 2013. Although it has decreased compared to the past, it is a very high growth rate. In September 2012, China plans to continue investing in infrastructure, including announcing plans to build a new subway line of 43,000 km. In fact, the amount of investment in fixed assets made in 2012 increased by 20.6% compared to the previous year.

Chairman Deny Meus said India is a threat to China's growth, explaining that China has a strength in manufacturing, while India has a strength in services. He cited an increase in population that could stimulate labor and consumption as India's greatest strength. This is because population growth will lead to an increase in the middle class and an increase in consumption. However, he added that India needs a lot of investment in infrastructure such as transportation, roads, water supply facilities and hotels.

In the case of Japan, which has been in a difficult situation recently, it is still strong in high-tech industries, and the construction market, including residential and office buildings, is recovering again, he explained. He also noted the remarkable growth potential of Asian countries such as Indonesia, Singapore, Thailand, Malaysia and the Philippines. In particular, as an emerging developing country in Southeast Asia, Vietnam is expected to grow 7% per year from 2011 to 2014 on the basis of export and production expansion, oil and gas, agriculture and private consumption. emphasized that it is high.

Although there are various variables in the Korean economy, we expected positive changes. As the domestic economy relies heavily on exports, it is expected to be affected by economic conditions in China, the United States, and Europe. Chairman Denis Meuss said that Korea has many potentials such as strong and creative companies, competitive brands, high-tech industries, and global corporate image as strengths of Korea, and expected to further develop these strengths under the leadership of the new president.

global flat glass market

In the aftermath of the global economic crisis, most countries are experiencing stagnation in domestic demand, and the flat glass industry is also facing problems of oversupply and deterioration of profitability. The oversupply phenomenon is high in Asia and Central Asia. In particular, countries with low energy prices and some countries with an excess of supply compared to their domestic markets are increasing their export volume by forming various selling prices.

Under these circumstances, the overall profitability of flat glass production is even worse. Countries with severe oversupply have a high proportion of losses, and regions with relatively less oversupply are also experiencing difficulties due to imported goods flowing in at low import prices. Chairman Denis Meuss explained that China is expanding its market dominance by making breakthroughs in flat glass production capacity as a representative example. As of November 2012, 210 lines out of a total of 255 lines in China were in operation, and it was reported that overproduction means that price competition will intensify soon.

Differentiation is the solution into a professional, efficient and productive organization

In this global crisis, what kind of path should the workers in the flat glass industry take to satisfy customers of various classes? As a solution, Chairman Denis Meus suggested focusing on differentiation into a more professional, efficient and productive organization. He explained that this can strengthen the company's internal stability and ultimately contribute to the development of the domestic market.

“Differentiation is not limited to products and technologies,” Meuss said. Differentiation includes the concept of creating a personality that other companies cannot imitate in the company's service quality, communication, reliability, management philosophy, and employee training, he emphasized. He also said, “Companies that have succeeded in differentiation through dynamic, proactive and innovative changes in the changing market will be able to lead the market. argued He said that he hopes that 2013 will be a year in which all companies and members in the flat glass industry grow and leap together in the face of difficulties.