Flat Glass

SIC 3211

Companies in this industry

Industry report:

This group includes establishments primarily engaged in manufacturing flat glass. Manufactured flat glass covered under this industry includes such types as building glass, cathedral glass, float glass, colored glass (including both cathedral and antique), insulating glass, laminated glass, optical glass, picture glass, sheet glass, structural glass, and window glass. This industry also produces laminated glass, but establishments primarily engaged in manufacturing laminated glass from purchased flat glass are classified in SIC 3231: Glass Products, Made of Purchased Glass.

Industry Snapshot

The flat glass manufacturing market is dominated by products intended for use by the office and housing construction industry. The construction market accounts for more than 50 percent of flat glass demand in the United States. The automotive industry accounts for a quarter of total demand, and the specialty glass market (mirrors, solar panels, and signs) accounts for 17 percent.

The fate of the flat glass industry, like that of most manufacturing industries, is inextricably linked to the status of the nation's general economy. Although low interest rates kept the new housing market robust into the early 2000s, commercial and industrial construction fell off significantly in the early twenty-first century, and the industry faced the effects of the shaky new housing market in the late 2000s due to mortgage industry troubles. The value of U.S. flat glass product shipments had remained relatively flat through 2003, when sales were $2.8 billion, the same value as in 1998. Sales rose during the next two years, however, to reach $3.3 billion in 2005.

The value of industry shipments plummeted in the late 2000s as a result of increasingly challenging economic conditions. From construction spending to the automobile industry, the worldwide flat glass market was feeling the strain. According to industry statistics, total flat glass shipments fell to $1.8 billion in 2008.

Organization and Structure

Flat glass producers can be divided into two major classes: makers of raw float glass and fabricators, and companies that treat raw glass with special coatings for finished products. Two widely used types of treated glasses are tempered and laminated flat glass. The flat glass industry includes tempered glass, while laminated glass and other glass products can be found in SIC 3231: Glass Products, Made of Purchased Glass.
The distribution of flat glass after it has been manufactured and, when applicable, processed with special coatings occurs along a multi-leveled chain, with sales possible at all levels. According to Glass Magazine, the normal distribution routes for domestic and imported flat glass are directly from domestic or foreign producers to fabricators, glazing contractors, and retailers, or through independent glass distributors who, in turn, serve manufacturers, fabricators, glazing contractors, and retailers. However, many companies, which may have originated as either manufacturers or distributors, find it profitable to expand from one segment of the market into another and have integrated manufacturing, fabrication, and sales into their operations.

The flat glass industry is subject to regulation by many government agencies and branches, including the Consumer Product Safety Commission, the Environmental Protection Agency (EPA), the Occupational Safety and Health Administration (OSHA), the National Bureau of Standards, and the Department of Commerce, among others. Standards and recommendations for the glass industry are also set by such groups as the American National Standards Institute and the Building Officials and Code Administrators International, and more specialized groups such as the National Glass Association, the Chemical Manufacturers Association, the Glazing Industry Code Committee, and the American Architectural Manufacturers Association.

Background and Development

Archeological remains indicate that glass was first made in the form of beads or small rods in the Near East (possibly Mesopotamia) beginning about 2500 B.C. Ancient glass was made from the same basic raw materials as modern glass: sand, soda, and lime, with other materials like dolomite and salt cake added. Early glass was used to make beads, vases, and other largely aesthetic objects. Its fragility and limited transparency, as well as the difficulties inherent in its production, precluded other uses.

From ancient times until the beginning of the nineteenth century, glass was made by laborious hand methods. However, mechanization followed on the heels of the great advances made in science and technology in that century, which led to decreased production costs. Flat glass also became more functional, and by 1925, 42 plants in the United States were producing 600 million square feet of sheet glass.

In 1959, the English firm of Pilkington Brothers perfected the revolutionary float glass manufacturing process, which made the production of flawless clear or tinted glass possible without the cumbersome grinding and polishing steps that were previously necessary. The transparency of the new float glass allowed 75 to 92 percent of visible light to be transmitted to the interior of a room. The float glass manufacturing process also brought about savings as capital investment costs decreased by 25 to 50 percent per ton of glass, and manufacturing outlays decreased by 15 to 30 percent.

The energy crisis of the 1970s forced glass manufacturers to develop energy efficient glasses, such as tinted and coated glasses. However, since these glasses absorb and reflect heat, they reach higher temperatures than ordinary windows. Thus, manufacturers developed tempered glass, which is heat-treated to increase its strength and ability to resist thermal stress. Tempered glass is considered safer than ordinary glass, because when broken, it shatters into cube-shaped particles without jagged edges. This makes tempered glass ideal for high- and rough-use areas and come into contact with high heat, such as storefronts, shower doors, and fireplace screens. In addition, tempered glass cannot be cut, drilled, or edged, so it is used as a security glass in the construction and motor vehicle industries. However, the use of tempered glass is limited in situations where building codes require fire-resistant glazing. In 1972, demand for tempered glass was at 317 million square feet, rising to 1 billion square feet in 1996.

In 1983, the glass industry took energy efficiency a step further by introducing "low-emissivity" (low-E) glass. "Emissivity" refers to an object's power to radiate heat and light. In the flat glass industry, the term is used to measure the ability of window glass to control energy and minimize heat loss in cold weather. The lower a product's emissivity, the more energy efficient it is. The development of low-E glass is considered to be the industry's greatest advance in energy efficiency since the 1970s. Low-E glass is similar to aluminum foil in that it has an invisible, colorless, thin metallic coating that reflects radiant heat and maintains cool temperatures. Low-E glass in commercial buildings is believed to have decreased heating, cooling, and lighting needs as much as 40 percent.

A trend that became apparent in the 1980s was an increased use of glass walls in new construction. Designers and building owners choose to incorporate them into building design for many reasons, including their dramatic aesthetic effect and the fact that glass is cheaper per square foot than most comparable building materials.

The financial success of the flat glass industry waxed and waned over the years, usually in step with the health of the U.S. economy. The industry entered a healthy growth period in 1983, which peaked in 1987 when the value of product shipments reached $3.5 billion, the highest in 15 years. However, the value of flat glass shipments diminished in each subsequent year until 1992 when only $2 billion in flat glass products were shipped.

Concurrently, the industry experienced rising prices for raw materials. In 1992, Glass Magazine reported that "the cost of materials as a percentage of the value of industry shipments rose from 31.8 percent in 1970 to 38.9 percent in 1989."

The industry's labor force also suffered during this time. In 1990, the flat glass industry had 17,000 employees, and in 1992, at the height of the U.S. recession, that number dropped to 14,700. In fact, the trend toward a smaller workforce started much earlier than the recession. As early as the 1970s, manufacturers began to actively seek ways to further automate production processes, largely in an effort to reduce payroll costs. Their efforts resulted in a smaller glass workforce.

The recession and its effects on demand and sales levels were not the only challenges the industry faced in the 1980s and 1990s. For example, the flat glass industry's pricing methods came under scrutiny. Since the eighteenth century, it was standard practice for glass manufacturers, distributors, and fabricators to calculate the price of total square footage by rounding up fractional amounts. However, after a glass retailer complained of unfair pricing due to this method, officials began to reexamine the flat glass industry's overall pricing methodology. Suggested alternatives included the adoption of either a unit price method or a fractional-inch computational method. Both methods require manufacturers, wholesalers, and the entire distribution chain to reprogram or recalculate glass costs to the actual fractional-inch square footage.

The industry was also rocked by a new standard proposed by the American Society of Heating, Refrigeration, and Air Conditioning Engineers (ASHRAE). ASHRAE 90.2, which was adopted in 1993, imposed limits on fenestration (the arrangement and design of windows and doors in a building) in the design of energy-efficient, low-rise residential buildings. Fenestration area is normally 20 percent of conditioned floor area in a newly constructed single family detached home, but ASHRAE 90.2 limited that amount to 15 percent. It was estimated that the new limitation could lead to 2.75 million fewer windows sold for single-family detached homes and 750,000 fewer patio doors.

The industry also faced challenges in the 1980s and 1990s on environmental, energy, and safety fronts. Several landmark legislative actions were handed down by the Environmental Protection Agency (EPA), the Department of Energy, and various local regulatory agencies. The EPA's Clean Air Act Amendments of 1990 specifically address the hazardous rate of air pollutants emitted by specific facilities and processes. The flat glass industry has been forced to find ways to manufacture high-quality glass more cleanly. The costs connected with the new law and standards, which are associated with the requirements of the law itself, the steps that a manufacturer must take to obtain an EPA permit, and the penalties that can be and are levied against the law's violators, represent one of the most serious and long-lasting legacies of this period. Other environmental concerns include water pollution and waste recycling.

Laid low by the U.S. economic recession of the early 1990s, the flat glass industry struggled to recover, managing to increase shipments from slightly less than $2.1 billion in 1992 to nearly $2.7 billion in 1996. Shipments in 1997 and 1998 reached $2.7 billion and $2.8 billion, respectively.

Some promising research and product development took place during the 1990s, much of it focused on making glass windows more energy efficient. It was found that adding gas between the sections of an insulating glass unit improves both thermal and sound control values. Heat loss by conduction occurs because glass has a tendency to flow toward cooler temperatures. Argon gas filling in insulating glass slows the flow of building heat to the outside in winter and reduces the amount of outdoor heat entering the building.

Fire-resistant glass was another important and exciting segment of the glass market in the late 1990s. So-called fire-rated glazing was expected and required to contain fire and allow visibility for building occupants and fire fighters during a fire. Various building codes and construction standards dictate which types of buildings and which areas within buildings must be fitted with fire-rated glass. Glass fire ratings are given in terms of time (i.e., 45 minutes). In the United States, a fire rating is achieved by first subjecting a particular glass to high-temperature flames. If a rating of more than 30 minutes is sought, the glass must then be blasted with water from a fire hose. Thus, most fire-rated glass is expected to not only withstand heat but also to remain intact, and thus continue to contain fire, even after being sprayed with water from a fire hose. A related concern is the ability of glass to resist heavy impact. Glass that has been tested for impact resistance is called safety-rated glass. In many cases, builders are required to install glass that carries both ratings.

Wired glass was the original fire-rated glass, and in 1996, wired glass continued to be the most popular type of fire-rated glass both because of its relatively low cost, at $7 to $12 per square foot, and because it was the oldest and best-known fire-rated glass on the market. Most wired glass carries a fire rating of 45 minutes.

Wired glass had some limitations, however, such as its less than artful appearance and the fact that standards prohibit its use in sizes larger than 1,296 square feet. These have made wired glass an increasingly unattractive choice for building designers and owners seeking to use larger, clear glass windows and even walls in new construction. Two of the more promising alternatives that gained acceptance in the 1990s were glass ceramic and transparent wall panels. Glass ceramic looks like ordinary window glass and can be manipulated like glass, but its ceramic properties enable it to pass both portions of the fire test easily with ratings up to three hours. Safety-rated versions of glass ceramic are also manufactured. A transparent wall panel, like wired glass, is fire rated and safety rated, but since it has no wire mesh reinforcement, it is more aesthetic. Because it is able to act as a barrier to heat, it can be classified as a wall, not a window, so its size is not restricted. Transparent wall panels are made of several laminated sheets of float glass, and the lamination enables them to carry the highest levels of glass safety ratings.

The issue of window labeling exploded in the 1990s. In 1995, the Canadian Window and Door Manufacturers Association (CWDMA) began a voluntary labeling program, which sets and uses a uniform "energy rating" (ER) standard for windows. This standard makes it easier for consumers to compare products and for building inspectors to confirm code compliance. The Canadian market is extremely important to U.S. glass manufacturers, so the Canadian initiative helped push the National Fenestration Rating Council (NFRC) of the United States to begin developing similar window and door energy performance standards. Those efforts were still under way in early 1997, but other, distinctly non-voluntary labeling programs have already begun in the United States. The 1996 Building Codes include detailed, complex rules on the labeling of wired and laminated glass. In some cases, the labels must be permanent, and the code specifies that labels for tempered glass be either etched or ceramic fired. A February 1996 Glass Magazine article titled "Building Codes Update," quoted an industry analyst saying that the new regulations were "one of the most onerous things that have happened to the glass industry."

One of the avenues for the industry's growth was a result of expanding exports. U.S. flat glass producers were somewhat frustrated in this arena by the tariff and non-tariff barriers many countries put in place to keep out U.S. flat glass. In November 1999, Japanese government officials indicated that they saw no need to negotiate a new flat glass trade agreement with the United States. Under the 1995 flat glass accord, which expired at the end of 1999, U.S. and Japanese officials agreed to facilitate Japan's purchases of foreign-made glass. In rejecting U.S. pleas for a new glass trade agreement, Hideo Hato, director of the Ministry of International Trade and Industry's press division, told United Press International that "The market for flat glass is sufficiently deregulated and the object of the agreement has already been attained. It's not necessary to extend the '95 measures."

By 2001, the U.S. flat glass industry produced and shipped 6.4 billion square feet of flat glass, accounting for 5.26 million short tons. Automotive glass production was 1.67 billion square feet. Of that, 45 percent was standard performance, 29 percent was high performance, and 26 percent was privacy glass. Of the 4.72 billion square feet produced for non-automotive use, clear glass less than 5 mm thick dominated the market share with 3.44 billion square feet of production.

Flat glass prices increased an average of about 2 percent a year in the early 2000s. A lack of demand and a worldwide production capacity that easily accommodated the market caused stagnant prices. Flat glass, like many manufacturing sectors, became more robust in the early 2000s due to new commercial and industrial development. By 2004, worldwide demand was projected to grow 4 percent annually, with China increasing nearly 12 percent. Architectural markets were the biggest growth area in that part of the world.

Other uses for flat glass boosted the market for this industry's products beginning in 2005. Sales and demand of flat screen televisions, computers, and electronic equipment increased along with new specifications for vehicles and new expectations from architectural glass.

Current Conditions

According to industry statistics, there were an estimated 781 establishments primarily engaged in manufacturing flat glass valued at $1.8 billion in 2008. Industry-wide employment was 29,236 workers that year. The majority of companies were in California, Texas, Florida, and Michigan. Collectively, these states shared nearly 32 percent of the flat glass market. Major categories within the industry were producers of flat glass, manufacturers of clear and colored window glass, manufacturers of insulating glass (sealed units), manufacturers of skylight glass, manufacturers of tempered glass, and manufacturers of construction glass.

Following a three year downturn in the construction market, there were positive signs of recovery despite a 25 percent decline for construction spending in 2009. Construction starts were projected to increase 11 percent to $466.2 billion in 2010, which in turn would also boost demand for the flat glass market.

Global demand for flat glass plummeted in the late 2000s, including demand in China that fell from 12 percent annually in 2004 to 6.8 percent in 2009. "They were building plants like crazy and making more than the economy needed," Russell J. Ebeid, president for the Glass Group at Guardian Industries Corp., noted in Glass Magazine in February 2009, adding that "The glass industry is hurting and seeing the squeeze due to the economic slowdown." In fact, China's exports have fell dramatically in 2009 compared to the previous year.

Despite the bleak economic conditions, and the subsequent closings of plants, the specialty flat glass market was expected to grow five percent annually between 2008 and 2012, reaching $7.2 billion. Continued interest in solar control applications, LCD screens, and laminated glass used in sunroofs by the automobile industry will help to spur that growth.

Industry Leaders

PPG Industries Inc., a flat glass and fiberglass manufacturer, was the overall U.S. glass industry leader. PPG sales were reported at $15.8 billion in 2008, a figure that included sales from its coatings division. The company increased its overseas presence with the acquisition of SigmaKalon from Bain Capital for $3 billion in 2008. A distant second in terms of U.S. flat glass sales, Apogee Enterprises Inc. had sales in 2008 of $925.5 million. All but one-fifth of the company's sales was from its architectural division. Guardian Industries Corp. was another U.S. glass leader, with 2007 sales estimated at $5.4 billion, which included all of its divisions.

Workforce

In 1979, the flat glass industry reported about 19,500 employees, but by 1996, that number had fallen to 11,500. Employment dropped slowly but steadily into the early 2000s, down to 10,323 in 2003, then rose to 11,454 employees in 2005. The 9,281 production workers earned an average hourly wage of $18.86. Industry-wide employment reached 29,236 workers in 2008.

Flat glass manufacturing can be difficult and dangerous work, although the rates of injury and work-related illness generally tend to be lower for companies with fewer than 50 employees and more than 100 employees than for mid-size establishments.

Research and Technology

Research of energy efficiency continued in the early twenty-first century. While great progress had already been made to improve the ability of window glass to keep heat and sound in or out of a room, some researchers turned their attention to the window edge, where spacer design and construction can lead to significant heat loss, decreasing overall window energy efficiency as much as 25 percent. "Warm edge technology" helped manufacturers seal window perimeters better by replacing the traditional frost-prone metal window spacers with high-strength, thin stainless steel, molded-in thermal breaks, and split spacers or silicone foam. This not only helps keep the temperature of the entire window higher, but it also reduces the incidence of condensation and frost. Though products using warm edge technology were available in 1997, the technology was still developing. It is not yet known, for example, how long existing products can be expected to last. In addition, manufacturers are looking for a way around the facts that warm edge materials are often more expensive than standard ones and that many require an entirely new production system.

Improving low-E glass technology was considered a cutting-edge research problem in the late 1980s and early 1990s, and great strides were made in reducing emissivity. In the late 1990s, a better and more energy efficient window was still on many researchers' to-do lists, but more demands were added. In Glass Digest, Day Chahroudi noted in May 1996 that "it is becoming apparent that the glass industry expects its next major market expansion to come from...optical shutters, or smart windows." The technologies called "optical shutters" allow windows to perform some of the same functions as shutters or curtains--keeping sunlight out of a room, allowing it into a room, and even allowing daytime one-way viewing.

Another promising product under consideration was switchable glass, a liquid crystal glass that can be wired to any structure's electrical system and operated by flipping a switch. Liquid crystals make the glass cloudy but permit sufficient light without obstructing visibility. The electrical current changes the glass from opaque to clear. Its current use is in interior applications such as partitions and conference rooms, where privacy and optional visibility are desirable.

Tighter environmental regulations, specifically emissions standards, brought about a significant manufacturing innovation with oxygen-fuel (oxy-fuel) combustion. According to Rich Deal in Glass Industry, oxy-fuel offers many significant advantages over conventional combustion systems. Significantly lower nitrogen oxide and particulate emissions are the most crucial among these for the U.S. industry. However, others include higher melt rates, reduced fuel consumption, improved workability of the resulting glass product, and the declining cost of producing on-site oxygen.

© COPYRIGHT 2018 The Gale Group, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. For permission to reuse this article, contact the Copyright Clearance Center.

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