© Copyright 2017Beroe Inc. All rights reserved.

Pharma segment to boost glass container procurement

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Table of Contents (1/3)

01

Executive Summary

• Global Market Outlook• Global Market Demand• Regional Demand Overview• Countries of Focus

02

Manufacturing Process and Value Chain Outlook

• Category Definition - Glass Containers• Manufacturing Process - Glass Containers• Value Chain Analysis - Molded Glass

03

Market Analysis

• Global Glass Container Market Overview:– Current Market Size – Supply–Demand Trend and Forecast– Regional Market Outlook– Key End-use Industries– Trade Dynamics– Key Drivers and Constraints

• Regional Market Outlook: (Europe, North America, APAC, and LATAM)– Current market size – Demand trend and forecast– Key end use industries– Trade dynamics

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Table of Contents (2/3)

04

Industry Analysis

• Porters Five Forces Analysis – Developed Markets– Developing Markets

• Key Trends and Innovations

05

Supplier Analysis

• Market Activity – Capacity Expansions/Supply Base

Development– Mergers and Acquisitions

• Global Capacity Share by Suppliers• Key Global Suppliers• Key Regional Suppliers (North America,

Europe, APAC, LATAM, Middle East, and Africa)

06

Supplier Profiles

• Key Global Supplier Profiles (Ardagh, Owens-Illinois, Verallia, Anadolu Cam, Vidrala)– Key Financial Performance Indicators– SWOT Analysis

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Table of Contents (3/3)

07

Cost Analysis and Industry Practices

• Cost Drivers & Forecast• Industry Sourcing Practices

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Appendix

• Expert Profiles

55

Preview

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Executive Summary (1/4)Global Market Outlook

MARKET OVERVIEWGlobal glass market size –

50.6 MMT (2015)Expected to grow at a CAGR of 3–4 percent

to 60.8 MMT by 2020

KEY REGIONAPAC (34 percent share)17.2 MMT (2015),expected to grow at a CAGR of 4–5 percent to reach 21.7 MMT by 2020.

Supply Base of Container Glass

Concentration High Medium Low

Key TrendsRecycling: Suppliers are gradually increasing cullet usage to reduce landfill and production costLight weighting: Glass container weight has reduced by 30 percent over the past decade

Key DevelopmentsEurope: Apollo Group buys Verallia for €2.95 billion bid HNG Global acquired by BA VidroVidrul – Vidreira invest $60 million to install two furnaces in Angola

COST BREAK UP - GLASS CONTAINERS

TOP GLOBAL SUPPLIERS (No. of Plants)

Owens-Illinois

80

Ardagh

35

Verallia

33

Anadolu Cam

10

Vidrala

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Global supply base is fragmented, with the top three suppliers having around 35 percent market shareOwens-Illinois is the largest glass manufacturer globally with around 19 percent production share, followed by Ardagh (7 percent) and Verallia (6 percent), respectivelyEurope and North America are the consolidated markets, with the top 2–3 suppliers holding over 50–60 percent share, conversely, developing markets are fairly fragmentedChina is the largest producer and exporter of glass containers, with 900 convertors present in the market

2015

2018 (F)

0 20 40 60 80 100 120

Raw Material Labour Energy

O/H Charges Gross Margin

Container glass price is expected to remain stable for the next 2–3 years.

2- 3%

Sources: Primary Expert 1, Primary Expert 2, Beroe Analysis

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Executive Summary (2/4)Global Market Demand

High Medium LowMarket Maturity

• The global glass container market is expected to grow at a CAGR of 3–4 percent during 2015–20 and reach 60.8 billion MMT by 2020, driven by increasing consumption of alcoholic beverages in the developing markets, like India and China. Maturing consumption of alcoholic beverages in the West will be offset by the developing markets

• Pharmaceutical segment is expected to witness the fastest CAGR of 5–6 percent from 2015 to 2020 across end-use segments, driven by increasing consumption of OTC drugs globally. Cosmetics segment will contribute to the value growth, owing to the increasing demand for high aesthetics

• Suppliers in the West are primarily investing to upgrade plant equipment, in order to achieve higher energy saving and reduce carbon emission. Emerging markets will experience increasing investments in new furnace installation and refurbishment over the next 3–5 years

01 North America

9.6 MMT, growing at 3–4 percent

03 APAC

17.2 MMT, growing at 5–6 percent

04 Middle East and Africa

4.0 MMT, growing at 3–3.5 percent percent

02 Europe

14.6 MMT, growing at 3–4 percent

Sources: Primary Expert 1, Primary Expert 2, Beroe Analysis

05 LATAM

5.0 MMT, growing at ~5 percent

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Executive Summary (3/4)Regional Demand Overview

Sources: Primary Expert 1, Primary Expert 2, Beroe Analysis

Regions Regional Supply

Capacity Additions Buyer Power Demand Trends

(2015–2020)Top Regional

Suppliers Key Supply Base Trend

North America

Alcoholic Beverages: CAGR: 2–3 percentFood: CAGR: ~3 percentPharma: CAGR 4–5 percent

• Anchor Glass• Gallo Glass• Kelman Brothers

Local convertors are focusing on boosting the recycling rates to reduce the production cost.

EU

Alcoholic Beverages:CAGR: ~1 percentFood: 2–3 percentPharma: CAGR 3–4 percent

• BA Glass• Vetropack• Vidrala• Warta

Supply base is gradually consolidating with a number of brown field investments.

APAC

Alcoholic Beverages:CAGR: 6–7 percentFood: 6–7 percentPharma: CAGR 12–13 percent

• HNGIL• Bangkok Glass• Nihon Glass• Yantai NBC Glass

Supplier are investing to enhance production capacity to boost international trade.

LATAM

Alcoholic Beverages:CAGR: 3–4 percentFood: NAPharma: CAGR 11–12 percent

• Vitro SAB• Fevisa• Rigolleau SA• Cattorini Hnos SA

Suppliers will be scaling up production to cater to the increasing global demand for local beer, wine, oil, etc.

Growing consolidation of supply base and maturing consumption of alcoholic beverages, especially in the West, might drive the buyers to expand their presence in the developing markets, like India, China, Vietnam, Thailand, Mexico, etc.

High

High

High

Medium–High

Low

High

Medium

Medium

Low

Medium

Medium–High

Medium

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Executive Summary (4/4)Countries of Focus

Sources: Primary Expert 1, Primary Expert 2, Beroe Analysis

- Developed

- Emerging

The highlighted countries are the most prominent production location for glass containers in each region. Developed markets have matured supply base and technological advancements and emerging markets have high growth potential, driven by increasing consumption and trade attractiveness.

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