Excel Glasses Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENT

India occupies significant position in the world packing industry. During 2011-12, the glass industry is expected to have touched a market of 4,000 crore. However, despite robust growth of the related industries, the per capita consumption of glass is very low as compared to other developed countries. The glass industry is growing 11% annually and is anticipated to touch a market value of UDS 21.59 billion by 2015. The demand will be driven by liquor, beer, food, beverage and pharmaceutical industries.

OPPORTUNITY

Alcohol and beverage industry is expected to sustain 14-15 % CAGR continuously due to change in lifestyles and increased cash flow to the new generation. Food processing, being the thirst area by the Government of India, shall also increase the usage of glass bottles. This will have a positive impact on the Glass Industry including your Company.

THREATS

The Growth in the industry may result in some players entering in this market or new additions to capacities by existing players. This may result into a competition affecting the bottom-lines of the industry. Increase in input costs like soda ash, petro products etc. is a major concern for industry. Threats are also being continuously faced from unorganized market supplying uncontrolled and unhygienic second hand bottles.

OUTLOOK

The future prospects for the Glass business continue to be subdued and the margins are expected to continue to be under pressure until the demand supply matches. There is a over capacity in the Industry due to expansion by large players and hence the present trend is expected to continue for a year or so during which the Company is likely to face difficult times.