Production Of Russian Glass Packaging Vessels To Increase Moderately In 2023

Production Of Russian Glass Packaging Vessels To Increase Moderately In 2023

Date:Dec 27, 2019

According to data quoted by BusinesStat's Russian glass packaging container market analysis compiled in 2019, Russian glass container manufacturers have been in a difficult situation in recent years. Production dynamics show that the growth rate of output in 2017 slowed to 1.6% compared with the previous year, and the output in 2018 was 12.5 billion, a year-on-year decrease of 5%. The main reasons for the decline in output were the closure of several glass container production plants and the reduced demand for products by consumer companies.

The production of glass packaging utensils has its own characteristics: the life cycle of the enterprise is 10 years. After the end of the production cycle, the factory needs to replace the glass furnace, which may cost billions of rubles. Most glassware factories in Russia started production before the 2008 crisis, and their production cycles are now coming to an end. Given the high interest rates on loans and rising prices for raw materials, natural gas and electricity, not all manufacturers can afford the installation costs of new glass melting furnaces.

According to BusinesStat estimates, Russia's glass container production will grow at a moderate rate of 1.8-4.1% per year in 2019-2023. By 2023, the output of containers on the domestic market will reach 14.5 billion. The steady demand for glass containers by Russian food and beverage producers will ensure a positive production trend. The main products consumed by Russians are closely related to glass packaging: this includes baby food, canned vegetables, alcoholic and non-alcoholic beverages. In addition, export development will also help increase output.

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