Glass container demand benefits Europe's soda ash makers - bank

02 January 2013 16:53  [Source: ICIS news]

LONDON (ICIS)--Growing demand for container glass is helping European soda ash producers offset weaker orders from more cyclical flat glass customers, Raiffeisen Centrobank said on Wednesday.

In western Europe, purchasers of soda ash for the production of flat glass, including the construction and automotive industries, represent only one quarter of demand, while container glass and detergents buyers represented 38% and 9%, respectively, it added.

“That implies resistance versus the cyclical slowdown, and there is growing container glass demand,” Raiffeisen analyst Dominik Niszcz said.

“The growing demand is probably related to customer willingness to use healthier food packaging than plastics, with this becoming more important especially in central and eastern Europe,” he added.

“And, of course, there is the general trend of growing packaging usage when it comes to all sorts of food and drinks sold,” Niszcz said.

Europe's biggest soda ash producer is Belgium-based Solvay, while the second-largest is Poland-based Ciech group, which has lately opted to concentrate on its core production units – largely its soda ash production plants in Poland, Germany and Romania – while closing its lossmaking Zachem toluene diisocyanate (TDI) business and divesting other non-core units.

On 19 December 2012, Standard & Poor's noted that Ciech's “soda ash business will remain resilient to the currently volatile economic climate”, while issuing its latest rating of the group.

By: Will Conroy
+44 20 8652 3214

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