Market dynamics have created the right opportunity for Arglass
Due to market consolidation, there are currently 42 glass container manufacturing facilities operating in the United States, down from over 120 plants in the early 80’s.
The three largest players own 36 of the 42 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 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.
Since 2009, imports of glass containers have been increasing at an 8.3% CAGR, with Chinese imports growing at an even higher rate. However, imports are not the ideal supply source, as they present logistic, quality control and customer service issues.