Operational Environment

Glaston is a frontrunner in glass industry technologies and services, responding globally to the glass processing needs of the architectural, solar, display and automotive industries. Demand for Glaston’s products and services is dependent on demand for glass and glass processors’ capacity. Glaston’s addressable glass processing equipment market is expected to grow by more than 5% annually, on average, during the strategy period 2021-2025.

Use of glass in construction is increasing through urbanization. Special requirements for glass are growing due to changing environmental factors, increasing safety regulations and energy-efficiency demands. In the automotive industry, the relative proportion of glass in vehicles is growing and use of thin glass, in particular, is increasing. Growth of solar energy, smart glass and energy-efficient glass is being supported by increasing environmental awareness and investments in renewable energy.

Glass processed using Glaston’s processing machines is supplied to the architectural glass, automotive glass, solar energy and display industries. Most of the glass produced with the company’s technology is supplied to the architectural glass industry (measured by volume).

Glaston operates in a global market, and the company’s business is to a large extent linked to trends in global investment demand.

Listen to CSO Sasu Koivumäki’s CMD presentation about Market trends.

Market

Glaston has divided its market areas into EMEA, America, and APAC. The EMEA area has traditionally been a strong market for Glaston and in 2020, it generated approximately 56% of Glaston’s net sales. In 2020 Americas’ share of the company’s total revenue was approximately 26% and APAC’s share 18%.

In 2020, market activity remained relatively stable in the EMEA region, although with large variations between countries. In the beginning of the year, market uncertainty was largely observed. This had a direct impact on willingness to invest and demand clearly weakened.

Market activity for Heat Treatment machines was subdued for most part of the year. However in the last quarter of the year, driven by strong demand in Central Europe, the Heat Treatment equipment market saw a strong recovery from the very weak levels in the second and third quarters. In the insulating glass equipment market positive development continued throughout the year, and demand was on a good level considering the exceptional circumstances.

During the latter part of the year, adjustments to “a new normal” were evident in the automotive markets thereby weakening the impact of the pandemic. Demand remained lower than normal, although it was much improved from the levels earlier in 2020 or even 2019.

The Asia-Pacific area is expected to be the fastest growing market area for glass processing in the coming years. The Chinese glass industry market is the largest in the Asia-Pacific area. Price competition is intense and local operators have a significant competitive advantage in a cost-conscious market.

During the end of 2020, market activity in China continued to grow, with particularly good development in the mid-range market for Insulating Glass equipment. In addition, spare parts services experienced strong development in China. Elsewhere in the APAC area, restrictions continued to be imposed, with a negative impact on equipment market activity. Despite travel and other restrictions, the Services markets developed positively, although with major variations in activity across the region.

In North America, the brisk market activity early in 2020 was followed by a sharp turnaround as customers reacted quickly to the situation caused by the corona pandemic. Towards the end of the year, markets recovered despite economic and political turmoil.

Growth Drivers

Competitors

The glass technology market is still fragmented and Glaston has many competitors. However, due to the challenging market situation, consolidation has accelerated in recent years.

The glass processing technology market is highly fragmented, with many small players manufacturing and selling machines and solutions to different parts of the flat glass processing chain.

The market can be divided into the high-end segment, mid-market segment and low performance segment in accordance with the customers’ quality and performance standards for the product. Glaston’s main addressable markets are the high-end and mid-market segment. Glaston estimates that in the high-end market segment, the customers have the highest requirements for machine capacity, uptime and services, as well as the highest quality requirements for the end product.

In the mid-market segment, the glass processors are usually regional or local processors and the quality requirements for the end product are lower than in the high-end segment.

Glaston’s main competitors are from Europe, China and Japan. For heat treatment equipment, Glaston’s main competitors are from China, for insulating glass equipment, the main competitors are from Central Europe and for automotive equipment, the main competitor is located in Japan.

In the Services business area, Glaston’s customer service network is the sector’s most extensive both geographically and in terms of personnel. There are more than 20 service locations. In addition, the service range provided by the Services business is the most comprehensive in the sector. Glaston’s comprehensive Glaston Care service agreements distinguish Glaston from its competitors. Maintenance services are available for every stage of the life cycle of products.