The glass industry in Russia is facing a crisis of overproduction

Dear Colleagues! We are publishing an interview with Osipov Viktor Ivanovich, President of the Association "StekloSouz" of Russia from the information and news portal "Sector Media".

In a year and a half since the imposition of sanctions, Russian glass producers have lost about 30% of their exports. The problem of the resulting surplus has seriously hit the industry. To return to the "pre-crisis" sales volumes, it is necessary to stimulate consumption in the domestic market, while simultaneously reviving the lost science and engineering. But for this, first of all, the will of the state is needed.

- Viktor Ivanovich, more and more glass and translucent structures are used in modern construction projects. How have the requirements for such products changed and are our enterprises ready to completely meet the changing demand?

- In 1999, when StekloSouz was created, the situation in the Russian glass industry was sad. At that time, we brewed no more than 86 million square meters. m of glass per year (for comparison, under the USSR - 310 million sq. m). As a result, 63% of the glass on the market was imported. Then the country's leadership set the task of doubling its own production, reaching the figure of 190 million square meters. m annually. A number of state programs have appeared that contribute to increasing consumption, including the construction of affordable housing. Investors rushed into the industry: new glass factories began to be built, existing production facilities were reconstructed. For ten years, by 2010, almost all industrial enterprises of the country were equipped with modern equipment - of course, imported, but nonetheless. And we were able to produce the planned 190 million "squares" of glass.

By 2020, according to the Strategy for the Development of Industrial Building Materials, it was planned to produce 300 million square meters. m glass. But the building complex began to lag behind during this period, and the risk of overproduction arose in the glass industry. It was necessary to develop domestic consumption and glass processing technologies, focusing on new market needs. For example, a promising direction was the production of double-glazed windows, which in 2020 in our country accounted for only 3–5 sq. m per person (in Europe - 23-25 "squares"). Demand for various types of glass also grew: safety, noise-absorbing, heat-insulating, double-glazed windows with heating, tempered glass. Some technologies came to us from the defense industry, we borrowed something from the West.

A landmark project for the industry was the business center "Moscow-City", which opened a new era in the use of glass in construction. Previously, the proportion of glass in a building did not exceed 4-5%. However, the demands of the market have changed, the interest of architects and designers in glass has begun to rise sharply, as well as the percentage of its use in construction. Translucent structures began to play the role of walls, ceilings, floors. Starting from the capital, this global trend has already clearly manifested itself in other cities of the Russian Federation. Yes, we still don't have all-glass facilities like in Europe (remember, for example, the all-glass college in Düsseldorf, Germany). We do not yet use glass for load-bearing structures and interfloor ceilings, however, we are able to make such objects - if there is an order. In my opinion, this is not tomorrow, but today, and tomorrow it will become the norm, and we are preparing for this. It's up to the architects, developers - and the glaziers will supply the necessary products in the right volume.

- With the introduction of sanctions in 2022, the industry lost about a third of exports, which it could not replace in the domestic market. How to get out of this situation?

- Even before the events of last year, when deliveries on the domestic market and in the CIS were growing dynamically, we already saw that Kazakhstan, Azerbaijan, Uzbekistan and other neighboring countries were building their own glass production facilities. Therefore, we began to develop exports to far abroad countries, entered the world glass association, participated in all major international industry exhibitions in Germany, Italy, and India. Let me remind you that by 2020 we were supposed to produce 300 million square meters of glass, but, given the decline in construction, we produced 245 million square meters. m. At the same time, we began to actively develop exports. And, according to EU statistics at the beginning of 2022, the glass industry entered the top 5 exporting industries of the Russian Federation, along with metallurgy, chemistry, the production of mineral fertilizers, etc. We had such successes. It didn't happen out of nowhere. In 1998, we understood that with the existing quality of products and applied technologies, we would not be able to compete in the world market. And even then we changed all the standards to international ones. Western buyers were attracted by our price - with a quality similar to the European one. After all, it must be said that the equipment at factories is approximately the same everywhere - both in Russia and in Europe. Therefore, it was not difficult for us to meet the requirements of foreign consumers, and they willingly bought our products.

Today Russia remains in the top ten world exporters of glass products. However, in 2022, of course, there was a sharp decrease in supplies abroad - by about a third. This has seriously affected the industry. After all, before the start of the SVO, we exported about 40% of all glass products produced in the country. And today the surplus in the market reaches 30%.

Therefore, our task today is to return the “dropped out” volume due to the growth of domestic consumption. But due to objective reasons, this is not so easy to do. Now, if at some plants there were scheduled repairs or reconstruction of furnaces, investors are in no hurry to launch them due to the uncertainty of the situation. There are practically no reserves for double-glazed windows either: the provision per capita in the Russian Federation has reached the European level. We are actively looking for solutions: we continue deliveries to the CIS, we look at the Middle East, Africa.

At the same time, we need to think about how to stimulate domestic consumption - to offer new products, to work intensively with architects and consumers. On the one hand, this will make it possible to change the appearance of our cities for the better, to create many new beautiful modern buildings. On the other hand, it will support the glass industry.

- It's no secret that all advanced technologies for the manufacture and use of glass in construction came to us from the West. What is now to be done with the equipment of factories, the purchase of equipment? Do we have our own developments in this direction?

- Of course, there are problems with the equipment, and we are looking for solutions - first of all, we cooperate with our machine builders. Unfortunately, after the collapse of the Soviet Union, the glass engineering industry was almost completely lost. In those days, we did everything ourselves: machines, equipment, furnaces, automation, refractories - everything was domestically produced. Now we can produce some individual elements. The main equipment, of course, is foreign, we carry something through parallel imports, but this affects the cost of production and the competitiveness of factories.

Of course, we need to develop our machine-building plants. But for this they also need to understand the volume of demand. And in any case, it will not be possible to quickly replace imports, it takes time - not a year, not two, not five years. It is necessary to revive science, education, training of personnel.

At the same time, we keep the market under control in order to prevent its “capture” by foreign suppliers. For example, we transport flat glass to the Far East, although it is very expensive and does not bring profit to manufacturers due to high logistics costs. But if Chinese products flood the market, this will create additional serious problems for our glassmaking and increase the surplus in the industry.

Today, despite all the difficulties, our factories are working, and no one has changed their course for development even for a second. But we must look forward to the future. And if the state does not change its attitude towards glass engineering, towards industry science, this future is unlikely to be “bright” for us.