Flat Glass - The Freedonia Group

US outlook forFlat Glasswith forecasts to 2005 and 2010New study finds:• Demand for flat glass in the United States is forecast to risethree percent per year to almost seven billion square feet in2005, valued at $9.1 billion• The construction industry will remain the largest outlet forflat glass, accounting for 56 percent of total demand in 2005• In 2000, the top four suppliers -- PPG Industries, AFG Industries(Asahi Glass - Japan), Pilkington North America(Pilkington - United Kingdom) and Guardian Industries -- accountedfor nearly half of total sales

Freedonia Industry Study #1446Flat GlassStudy Publication Date: June 2001Price: $3,500Pages: 209Flat Glass, a new study from The Freedonia Group, providesyou with an in-depth analysis of major trends in theindustry and the outlook for product segments and majormarkets -- critical information to help you with strategicplanning.This brochure gives you an indication of the scope, depthand value of Freedonia's new study, Flat Glass. Orderinginformation is included on the back page of the brochure.Brochure Table of ContentsStudy Highlights ............................................................................... 2Table of Contents and List of Tables and Charts ............................. 4Sample Pages and Sample Tables from:Market Environment .................................................... 6Products ....................................................................... 7Markets........................................................................ 8Industry Structure ........................................................ 9Company Profiles ...................................................... 10List of Companies Profiled ........................................ 11Forecasting Methodology ............................................................... 12About the Company ....................................................................... 13Advantages of Freedonia Reports ................................................... 13About Our Customers .................................................................... 14Other Titles From Freedonia ......................................................... 15Ordering Information..................................................................... 16

Study HighlightsFlat Glass Demand by Market, 2000Construction55.8%Specialty13.9%Motor Vehicles30.3%Flat Glass Demand(million square feet)% Annual GrowthItem 1990 2000 2005 2010 00/90 05/00Gross Domestic Product (bil 1996$) 6708 9319 10670 12270 3.3 2.7sq ft flat glass/000$ GDP 0.60 0.64 0.65 0.66 -- --SUMMARY TABLEFlat Glass Demand 4037 6000 6940 8095 4.0 3.0Construction 2105 3344 3865 4550 4.7 2.9Motor Vehicles 1250 1820 2160 2520 3.8 3.5Specialty 682 836 915 1025 2.1 1.8$/sq ft 1.07 1.20 1.31 1.42 1.2 1.8Flat Glass Demand (mil $) 4300 7200 9100 11530 5.3 4.8© Copyright by The Freedonia Group, Inc.Flat Glass #1446Order form on last page3

List of Contents,Tables and ChartsI. EXECUTIVE SUMMARYSummary Table ................................................................ 3II.MARKET ENVIRONMENTGeneral ................................................................................. 4Macroeconomic Overview .................................................... 4Table - Macroeconomic Indicators .................................... 6Population & Household Trends ......................................... 6Table - Population Trends................................................ 9Personal Consumption Expenditures ................................... 9Table - Personal Consumption Expenditures .................11Building Construction Industry Overview .........................11Table - Building Construction Expenditures ..................13Residential Building Construction ..................................13Table - Residential BuildingConstruction Expenditures .......................................15Housing Starts & Dynamics........................................15Table - Housing Starts & Dynamics ........................17Residential Repairs & Improvements ..........................17Table - Residential Repair & ImprovementConstruction Expenditures ...................................18Nonresidential Building Construction ............................18Table - Nonresidential BuildingConstruction Expenditures .......................................20Window & Door Outlook..................................................20Table - Window & Door Supply & Demand ................22Motor Vehicle Industry Overview ......................................22Table - Motor Vehicles in Use, Production & Retail Sales .....24Manufacturing Sector Overview .........................................24Table - Manufacturers’ Shipments ..................................26Market Cyclicality ..............................................................26Annual Cyclicality ..........................................................27Table - Market Trends in Flat Glass, 1990-2000 .......28Chart - Market Trends in Flat Glass, 1990-2000 .......28Seasonal Cyclicality .........................................................29Chart - Seasonal Cyclicality in Flat GlassProduction, 2000 .....................................................29Pricing Trends ....................................................................30III.IV.Table - Flat Glass Pricing Trends ....................................31Foreign Trade .....................................................................31Table - Foreign Trade in Flat Glass .................................33Exports ...........................................................................34Table - Flat Glass Exports from the US .......................36Imports ...........................................................................36Table - Flat Glass Imports to the US ...........................39World Flat Glass Demand ..................................................39Chart - World Flat Glass Demand by Region, 2000 .......41RAW MATERIAL & MANUFACTURING TRENDSGeneral ...............................................................................42Raw Material Trends ..........................................................43Table - Raw Material Demand in Flat Glass....................45Silica Sand.......................................................................45Table - Silica Sand Demand in Flat Glass ....................47Soda Ash .........................................................................47Table - Soda Ash Demand in Flat Glass ......................50Lime & Limestone ..........................................................50Table - Lime & Limestone Demand in Flat Glass .......52Other Flat Glass Raw Materials .......................................52Table - Other Materials Demand in Flat Glass ............53Technology & Manufacturing Trends ...............................54Stages of Production .......................................................55Batch Production ........................................................55Melting .......................................................................55Forming ......................................................................56Finishing .....................................................................56Manufacturing Requirements .........................................57Operating Requirements .............................................57Capital Spending ........................................................58Table - Capital Spending Patterns:Selected Flat Glass Suppliers ..................................60Vertical & Horizontal Integration ...............................60Research & Development Trends ...................................61Table - Research & Development Spending Patterns:Selected Flat Glass Suppliers ......................................63Production Technology Trends ..................................63New Product Trends ..................................................64Environmental Considerations ...........................................65Glass Recycling ...................................................................67OVERVIEWGeneral ...............................................................................68Chart - Flat Glass Industry Flowchart .............................704Flat Glass #1446Freedonia Industry Study

Flat Glass Production, Shipments & Inventories ................71Table - US Flat Glass Production & Shipments ..............72Chart - US Flat Glass Production,Shipments & Sales, 1989-1999....................................73Flat Glass Production Capacity ...........................................73Table - US Flat Glass Production Capacity, 1995-2000 ....76Suppliers & Capacity Share ................................................77Table - US Float Glass ProductionCapacity by Company, 2000 .......................................80Chart - US Float Glass Capacity by Company, 2000 .....81Flat Glass Supply & Demand.............................................82Table - US Flat Glass Supply & Demand .......................84V. PRODUCTSGeneral ...............................................................................85Table - Flat Glass Demand by Type ...............................87Chart - Flat Glass Demand by Type, 2000 ....................87Tempered Flat Glass ...........................................................88Table - Tempered Flat Glass Demand by Market ...........89Motor Vehicle Markets ...................................................89Construction Markets .....................................................90Specialty Markets ............................................................90Insulating Flat Glass ...........................................................91Table - Insulating Flat Glass Demand .............................92Construction Market ......................................................93Specialty Market .............................................................93Laminated Flat Glass ..........................................................94Table - Laminated Flat Glass Demand by Market...........96Motor Vehicle Market ....................................................96Construction Market ......................................................98Specialty Market .............................................................99Unfabricated Flat Glass ......................................................99Table - Unfabricated Flat Glass Demand by Market ... 101Other Flat Glass Products ................................................ 101Table - Other Flat Glass Demand by Product & Market .... 103Mirrors......................................................................... 103Low-Emissivity Glass ................................................... 105Reflective Glass ............................................................ 107Tinted & Colored Glass .............................................. 108Miscellaneous Flat Glass Products ................................ 109VI. MARKETSGeneral ............................................................................ 111Table - Flat Glass Demand by Market ......................... 113Chart - Flat Glass Demand by Market, 2000 .............. 113Construction ................................................................... 114VII.Table - Construction Markets for Flat Glass................. 118Residential Construction .............................................. 119Table - Residential Construction Marketsfor Flat Glass .......................................................... 121Table - New Residential Construction Marketsfor Flat Glass .......................................................... 122Table - Residential Repair & ImprovementConstruction Markets for Flat Glass ....................... 124Nonresidential Construction ........................................ 124Table - Nonresidential ConstructionMarkets for Flat Glass ............................................. 126Table - New Nonresidential ConstructionMarkets for Flat Glass ............................................. 128Table - Nonresidential Repair & ImprovementConstruction Markets for Flat Glass ....................... 129Motor Vehicles ................................................................ 130Table - Motor Vehicle Markets for Flat Glass ............... 132OEM ........................................................................... 133Table - OEM Motor Vehicle Markets for Flat Glass ..... 135Aftermarket .................................................................. 135Table - Aftermarket Motor VehicleMarkets for Flat Glass ............................................. 137Specialty Market .............................................................. 137Table - Specialty Markets for Flat Glass ....................... 139Mirrors......................................................................... 139Furniture ..................................................................... 141Aerospace & Other Transportation Equipment ........... 141Appliances ................................................................... 142Other ........................................................................... 143INDUSTRY STRUCTUREGeneral ............................................................................ 144Market Share & Industry Concentration ......................... 145Table - Estimated US Flat Glass Salesby Company, 2000 ................................................... 147Chart - US Flat Glass Market Share, 2000 ................... 148Overview of Leading Suppliers ........................................ 148Competitive Strategies ..................................................... 153Acquisitions & Divestitures ............................................. 155Table - Selected Acquisitions & Divestitures ................ 157Cooperative Agreements .................................................. 158Table - Selected Cooperative Agreements ..................... 160Marketing........................................................................ 161Distribution .................................................................... 163Company Profiles .....................................................165-209Flat Glass #1446Order form on last page5

Market EnvironmentThe Market Environment Sectiondiscusses factors influencing flat glassdemand, including building constructionand motor vehicle trends.MARKET ENVIRONMENTThis information provides you with anunderstanding and an analysis of theclimate in which the flat glass industryoperates.Window & Door OutlookWindows and doors are essential components of structures, playing roles inregulating access, security, ventilation, illumination and energy usage of thestructure’s interior. Demand for windows and doors is dependent not only uponSAMPLE PAGEthese functional concerns, but also upon aesthetics, as these products servedecorative purposes as well. Product developments have thus been driven by bothfunctional and aesthetic considerations, particularly efforts to improve durabilityof the products and increase the energy efficiency of windows and doors. Forexample, double-pane windows and better glazings have improved windows’ abilityto deliver the desired combinations of light and heat transmission, reducing heatingand cooling costs, and spurring greater replacement demand.RAW MATERIAL & MANUFACTURING TRENDSUS demand for windows and doors is forecast to rise 2.1 percent annually through2005 to $24.6 billion. Gains will be significantly slower than during the 1995-Production Technology Trends2000 period, when robust building construction activity, especially in residential,office and commercial markets, boosted demand for windows and doors in newOngoing research to improve production methods and processes is commonplaceand will remain an important consideration instructures.the US flatTheglasslargeindustry.residentialEffortsmarkettowill suffer from an expected fall in housingimprove the basic flat glass manufacturing processstarts,generallythanks infocuspart toondemographicthree goals:changes that will result in slow growth in theSAMPLE PAGEnumber of individuals in the 25-34-year-old age range, a prime segment for firsttimehomebuyers. The drop in starts will be cushioned, however, by increasingreducing the defect rate, increasing efficiency and making the process lesspolluting. These goals may be enhanced through the use of pure oxygen in glassadoption of features that boost residential window and door demand, such as largerfurnaces instead of air. Oxygen-fed burners produce higher temperatures, whichgarages and wider use of patios and decks. Repair and improvement demand willreduces temperature fluctuations and transfers more heat into the glass, both ofwhich improve quality. In addition to improvedbecomeproducta largerquality,fractionthereofareoverallseveralsales in both residential and nonresidentialmajor advantages for glass producers by switchingmarkets.from air to oxygen in combustionprocesses including lower total off-gas and nitrous oxide emissions, as well asUS shipments of windows and doors are expected to reach $24 billion in 2005,lower fuel consumption. Environmental laws, particularly the Clean Air Actbased on annual gains of 2.1 percent. Metal windows and doors will remain the(CAA), are the primary driving force behind the switch to oxygen.largest segment in terms of dollar value through 2005. Vinyl and other plasticPilkington and PPG Industries operate two oxygen-fuelwindows willfurnacesforce woodin thewindowUS.producers to focus on higher-end markets in newPilkington’s oxygen-fuel furnace plant has been in operation for several years. In2000, PPG Industries completed the installation of a 100-percent oxygen-fuelmelting furnace at its float glass plant in Fresno, California. In addition, thecompany announced it will convert a float line in Meadville, Pennsylvania to an6Flat Glass #1446Freedonia Industry Study

ProductsPRODUCTSThe Products Section provides demandfor historical years and forecasts growthto 2005 and 2010.This information helps you:• Analyze your company'sgrowth potential inthe industry.Low-Emissivity GlassDemand for low-emissivity (low-E) glass is forecast to increase 2.6 percent peryear to 250 million square feet in 2005. Gains in demand will be promoted bySAMPLE PAGEimproved product quality and greater demand for the solar control properties ofthis glass due to energy concerns. This segment includes low-E glass used in singlesheets or panes. For example, low-E glass can be used to produce a single panewindow as long as the coating is on the interior and not exposed to moisture.Low-E glass can also be used to produce insulating glass, where it is most effective.(These quantities are included in the insulating glass segment.) In 2005, low-Eglass will account for 30 percent of total other flat glass product volume demand.• Outline your strategicplans for five and tenyears out.• Establish sales goals.The outlook for low-E glass has improved since suppliers have concentrated onproduct quality. For example, one of the main concerns about early generations oflow-E glass -- since alleviated -- was color distortion from the application of thecoating. Other areas of product development include the reduction of emissivity,varying solar heat gain, improving aesthetics and increasing light transmission.The increasing popularity of low-E glass is pushing suppliers to offer a widervariety of products. In 2000, PPG Industries reintroduced low-E glass under theSOLARBAN tradename, first introduced in the 1960s. SOLARBAN 60, forexample, is a low-E glass that is produced by magnetic-sputtered, vacuumdepositioncoating, and is designed for solar control while maintaining a neutralcolor aesthetic and providing high visible light transmittance.Laminated Flat Glass Demand by Market(million square feet) Low-E glass such as Cardinal IG’s LOE line of low-E coated glass products arecoated with microscopically thin, transparent layers of silver, which are in turnItem 1990 1995 2000 2005 2010surrounded by two layers of anti-reflective metal oxide coating. This type of glass,including Pilkington North America’s ENERGY ADVANTAGE, is designed toMotor Vehicles & Parts Shpts (bil 96$) 237.2 324.1 386.9 444.0 511.2significantly reduce radiation heat transfer while improving the U-value of thesq ft flat glass/000$ shpts 3.2 2.9 2.9 3.1 3.1SAMPLE TABLELaminated Glass Demand 750 930 1120 1355 1580Motor Vehicle Markets 580 725 890 1100 1300Construction Markets 122 150 170 190 210Specialty Markets 48 55 60 65 70$/sq ft 1.33 1.41 1.55 1.68 1.83Laminated Glass Demand (mil $) 1000 1310 1735 2280 2890% laminated 23.3 23.8 24.1 25.1 25.1Flat Glass Demand (mil $) 4300 5500 7200 9100 11530© Copyright by The Freedonia Group, Inc.Flat Glass #1446Order form on last page7

MarketsThe Markets Section analyzes trends andconsiders the threats and opportunities ineach of the major markets for flat glass.The information presented willhelp you:Motor Vehicles - AftermarketMARKETS• Focus your sales and marketingefforts on high growth areas.• Propose new areas for development.Demand for flat glass in the motor vehicle aftermarket (often called ARG, orSAMPLE PAGEautomotive replacement glass market) is forecast to increase 4.7 percent per yearto 830 million square feet in 2005. This market for flat glass encompasses all usethat occurs after the vehicle has left the manufacturer’s assembly line. Growth inflat glass demand will be promoted by the rising average number of miles driven pervehicle, since the higher the number of miles driven per vehicle, the more likely itwill encounter roadway debris or obstacles resulting in greater stress on automotiveglass products. However, the increasing durability of installed glass at the OEMlevel will be a restraining factor for flat glass demand in the ARG. In 2005, theaftermarket will account for 38 percent of total flat glass demand in the motorvehicle market.Gains in flat glass demand will also benefit from the large number of vehicles thatwent into service over the past decade. Not only is flat glass demand benefittingfrom the large number of vehicles in use, but also from the types of motor vehiclesin use. As such, flat glass will continue to benefit from the rising proportion oflarger-sized vehicles (e.g., SUVs, pickup trucks and minivans) in use, as thesevehicles tend to use greater amounts of glass than passenger cars on a per-vehiclebasis. The popularity of SUVs, pickups and minivans is expected to continue intothe next century, although growth will decelerate from the strong pace set duringthe past decade, reflecting slower retail sales of these vehicles.New Nonresidential Construction Markets for Flat Glass(million square feet)ItemA major1990restraining1995factor2000in flat glass2005demand2010in the ARG market is the durabilityof glass installed at the OEM level. Over the past decade, product innovationsNonresident Building Constr (bil 96$) 219.0 198.6 260.8 279.5 307.8have resulted in thinner and stronger automotive glass that is more resistant tosq ft flat glass/000$ expend 1.6 1.7 1.9 2.1 2.2stress. While favorable SAMPLE for the glass TABLE industry over the long term because of itsNew Nonresidential Construction Mktsvalue-added 350 characteristics, 340 500 this stronger 580glass tends 690 to reduce replacement% new 42.2 39.5 40.7 40.6 40.8Nonresidential Construction Markets 830 860 1230 1430 1690© Copyright by The Freedonia Group, Inc.8Flat Glass #1446Freedonia Industry Study

Company ProfilesThe Profiles Section analyzes 25companies active in the U.S. flat glassmarket. These profiles represent asampling or cross-section of the types ofcompanies involved in the industry.COMPANY PROFILESDivisions, subsidiaries, jointventures, etc., are discussed underappropriate parent companies.Sources for profiles included:• Information provided bykey staff members in therespective companies• Annual reports• 10-K reports• Security analysts reports• Corporate product literatureUnited Glass Corporation415 Broad Street, Suite 410Kingsport, TN 37660423-246-1200United Glass Corporation (UGC) was formed in August 1999 through the mergersof Hartung Glass Industries and its Oregon Glass Company subsidiary and LamiGlass Products affiliate; GlassWerks Group of Companies; Mid Ohio Tempering;Tempered Glass Incorporated; Thad Ziegler Glass Incorporated; PerilsteinDistributing Corporation and its PDC Glass of Michigan Incorporated affiliate;TFC Incorporated; and Louisville Plate Glass Company Incorporated. At the timeof the formation, UGC operated a total of 37 fabrication and distribution facilities.The privately-held company has estimated annual sales of $220 million andemploys approximately 1,700.SAMPLE PAGEThe Company’s Hartung Glass Industries subsidiary (Seattle, Washington) producesinsulating, laminated and spandrel glass. Insulating glass is produced for bothresidential and commercial applications. The vertical insulating line includeslaminated, annealed, tempered and high-performance types of glass. Among theapplications for these glass products are transit, automotive, residential andinstitutional security, sound and energy control, and safety end uses. Spandrel glass isheat-strengthened or tempered for use in exterior commercial applications. To coatits spandrel glass, Hartung Glass Industries uses OPACI-COAT 300, a silicone-basedspandrel coating manufactured by ICD Incorporated. Hartung Glass Industriespurchases glass mainly from PPG Industries Incorporated (Pittsburgh, Pennsylvania);and Pilkington North America Incorporated, a subsidiary of Pilkington plc (UnitedKingdom).Hartung Glass Industries’ Agalite division produces bath and shower enclosures.The division offers four main styles of enclosures, including the V-Series, the F-© Copyright by The Freedonia Group, Inc.Flat Glass #144610Freedonia Industry Study

About Our CustomersFreedonia's clients include major US and international companies inthe manufacturing, services, consulting and financial sectors.Typical purchasers of Freedonia studies :• Key Executives• Corporate Planners• Market Researchers• Financial Analysts• Information Centers• New Product Developers• Merger & Acquisition SpecialistsSince 1985 we have provided research to customers ranging in sizefrom global conglomerates to one person consulting firms. More than90% of the industrial companies in the Fortune 500 use Freedoniaresearch to help with their strategic planning.Some of Freedonia's customers in the flat glass market include:PPG Industries, CRH plc, Pilkington plc and Heywood WilliamsGroup plc.14Flat Glass #1446Freedonia Industry Study

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