Glass Jar Production 

Assessments of the jar market volume vary because some experts count jars regardless of their capacity, while others count them on the basis of the 0.5-litre equivalent. The latter method is correct.

From 2007 to 2009, the output of glass jars increased by 26.1%. The largest increase fell on 2008, when it constituted 20.9% against the previous year. In 2009, their output grew by 4.3%, or 64.1 million.

The main capacities of glass jar production are concentrated in two federal districts – the Southern and the Central ones. The output structure can be illustrated by the following diagram:

 

It should be pointed out that the largest increase in the glass jar output over the past three years occurred in the Central District, with its share in the total output rising from 20.8% in 2007 to 37.9% in 2009.

In 2009, about one third of all glass jars in the Russian Federation was produced at the Kamyshinsky Glass Container Plant.

The first place in the production of glass jars in the Russian Federation is held by the Kamyshinsky Glass Container Pant CJSC with its 31.4%. The enterprise started to operate in 1939, and today its annual capacity is approximately 500 million glass jars. Besides glass jars, it also produces glass bottles.

The second place belongs to the Kamensky Glass Container Plant OJSC with its 9.5%. The enterprise founded in 1913 is one of the oldest in Russia’s glass industry. In 1994, it started to produce glass jars. Today it produces 0.5, 0.65, 1, 1.5 and 2-litre glass jars.

Yugrosprodukt OJSC rates third, and the Korkinsky Glass Container Plant Ltd. rates fourth among Russian glass jar producers.

As for the structure of the glass jar output by capacity, 3-l jars, which used to be very popular, are gradually losing ground although they still account for about 20% of the market.

0.35-l glass jars account for about 10% of the glass jar output in the Russian Federation, while the share of 0.5-l jars is 12%.

0.65-l jars are sufficiently popular in the Russian market; they account for 12% of the jar output in Russia. 

0.25-l jars become increasingly popular; in 2009 their share was equal to 8% of the output. 1.0-l jars account for 10% of the output.

The demand of the food industry that cannot be met by Russian producers and reuse of secondary glass containers is met by import, which exceeds the volume of export dozens of times.

Import mostly meets the demand of the Russian industry for high-quality and non-standard glass containers. At the same time, the past few years have witnessed an obvious trend towards a reduction in the import of glass jars. Nonetheless, in the nearest future the import of glass jars will continue to exceed their export.

In 2009, 7.4% of Russia’s annual jar consumption was imported into the country. Their import has been steadily decreasing of late. In 2009, it went down by 38.6% against 2008 and 52.8% against 2007.

Major suppliers of glass jars into the Russian market are Ukraine and Germany, which account for over 76.7% of the total import. Polish, Finnish, Estonian and Spanish companies are also sufficiently active in the Russian market.

The largest companies supplying glass jars for their own production needs are Ukrainian companies – Peskovsky Glass Wares Plant OJSC and Buchansky Glass Container Plant Ltd, which jointly account for over 40.2% of the total volume of import.

Besides, major suppliers are German companies Noelle + Von Campe glashutte gmbh and Ardag Glass Germany GmbH accounting for 16.4% and 13.8% of the total import respectively.

The rating of companies supplying glass jars is presented below.

Source: Abercade Research Company

The structure of jar import is as follows: the largest share of glass jars imported in 2009 consists of 0.45-l jars (about 10.7%), 0.23-l jars (8.4%) and 0.37-l jars (7.6%). Jars of such capacities are used for packing instant coffee. A sufficiently substantial percentage (6.3% of the 2009 import) falls on 1.5-l jars, which find a ready market among producers of canned mushrooms, vegetables and fruit.

In 2009, the export of glass jars decreased by 5.7% against 2008. On the whole, the export of glass jars from the Russian Federation had stabilized. This was connected with the fact that there was a certain shortage of jars in the Russian market. Any volumes of output of Russian companies were consumed by the domestic market, and manufacturers had no need in entering external markets.

The volume of export remained insignificant constituting as little as 2.1% of 2009 glass jar consumption in the Russian Federation.

The structure of the Russian export of glass containers is traditionally orientated towards CIS countries. Half of all export deliveries go to Ukraine.

In 2009, the volume of jar export in the 0.5-l equivalent stabilized. If we compare the dynamics of export of jars of various capacities in kind, the data will vary. This is connected with the fact that the export structure has considerably changed in the past three years. Previously, jars of large capacities (1-l and 3-l) accounted for a large share of export, while after modernization of equipment in Russia a change in demand entailed a change in the export structure. In 2009, jars with a capacity of up to 0.5-l constituted about half of the export volume.

Most of the glass jar export – 54.1% - goes to Kazakhstan. In 2009, the shares of Ukraine, Turkmenistan and Azerbaijan constituted 19.9%, 6.6% and 5.7% respectively. The aggregate share of the other countries Russian-made glass jars were exported to was equal to approximately 13.7% of the entire export volume.

The largest companies exporting their glass jars to external markets are the Kamyshinsky Glass Container Plant CJSC and the Veda-Pak CJSC, whose aggregate share constitutes more than 76.2% of the total export volume.

Besides that, major exporters are the Kamensky Glass Container Plant OJSC (7.7%), Krasnoye Ekho Ltd. (6.2%) and the Korkinsky Glass Container Plant (3.5%).

As compared to 2007, the 2008 volume of consumption increased by 12.7%. In 2009, it decreased by 0.6%. It should be pointed out that this decrease was due to a considerable reduction of the 2009 glass jar import. Russian manufacturers increased the volume of output, and total reduction of the market volume was insignificant.

The main glass jar consumers are producers of all kinds of canned foods. Juice producers prefer to bottle their drinks, although a certain part of the juices is stilled packed into jars. As an alternative to glass jars, sauce producers use polymer packing. The 2009 jar consumption structure is presented in the diagram below.

The economic crisis has had a considerable impact on the market. The share of Russian-made glass jars has increased whereas their import has dropped. The increase in the volume of output has been promoted by the fact that in the past few years, glass-jar producers, in an attempt to reduce their shortage, invested considerable funds in modernizing production and increasing their capacities. The assortment of jars has considerably increased. The 2009 ruble devaluation against the main currencies had a strong impact on the import of glass jars, prices on which rose sharply.

In the past few years, the assortment of glass jars has considerably widened, especially that of jars of capacities unusual for this country such as 0.24-l, 0.9-l and 0.48-l jars instead of the standard 0.25-l, 1-l and 0.5-l ones.

Volume-saving leads to some advantages in prices as compared to foods canned in jars of standard capacities. Besides that, new packing and sealing lines permit a diversity of jar shapes, capacities and neck diameters. 

Today producers give preference to jars of 250-750 ml. Such jars are in great demand among canned food consumers.

In the next 2 or 3 years, the glass jar market will resume its growth in kind, although the growth rate will be somewhat lower.

In the glass container market, the originality of shape and design of glass jars is currently of great importance to consumers, although the quality and the price are important as well. As competition increases, consumers will pay more attention to design, more intricate packing and better logistics conditions offered by suppliers.

Jars of non-standard capacities of less than 1 liter will be increasingly popular. 

Thanks to the fact that demand for glass jars is not yet fully met, their producers survived the 2009 crisis comparatively easily. Almost all glass plants either increased their volume of output or retained it at the 2008 level. Ruble devaluation, which led to a rise in prices on imported jars, served as another incentive for glass jar production growth. It should be pointed out however that the total volume of the 2009 Russian market of glass jars decreased by 0.6% in kind due to a considerable reduction of imports.

Besides that, an important factor, which will influence the industry’s development in the nearest future, is the 2008 slow down of the growth rate of the sectors consuming glass containers and, consequently, a reduction in demand for them.

Some time before the financial crisis began, the volume of output of the main glass container consumers had stabilized after a period of a rapid growth.

The totality of the above factors makes the forecast of the further development of the situation rather complicated. On the one hand, based on the results of the first months of 2010 it can be said that Russian economy has started recovering from the crisis, but on the other hand, growth rates in the glass container consuming sectors are substantially different.

It can be assumed that the market will stabilize in the next few years. A small annual growth of 1% to 3% is possible.