Economy Industry Company Analysis of Glass Industry Co

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  • Topic: Economy of India, Soda-lime glass, Economics
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  • Published : August 29, 2012
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EIC ANALYSIS
World Economy and Indian Economy

Economy
Container Glass industry

Industry

Hindustan National Glass Industries Ltd.

Company
Name : Shasank Sekhar Jalan Roll No : 37B Indian Institute of Foreign Trade MBA(IB) 2012-14

Global Economy
•The Financial Crisis had a huge impact on the economy the world over. • Global Economy is slowing down with IMF revising growth projections downwards to 3.5% •Growth in Emerging markets to fall to 5.75% from 6.25% •But with improved activity in United States of America and better policy coordination in the EURO area, things are looking better and growth is expected pick up by 2014 9 8 7 6 5 4 3 2 1 0 2007 2008 2009 2010 2011 2012 Japan U.S.A Spain Germany Italy India

World GDP Growth
6

Growth expected to be back on a Upward Trajector y

5 4 3 2 1 0 2009 2010 2011 2012 2013 2014 2015

World GDP Growth

Sovereign Yields
But high Governm ent Debts and in effect Yield remain a concern

•The decision to merge European Stability Mechanism (ESM) and European Financial Stability Facility (EFSF) is welcome, along with availability of Long Term Repurchase Obligations (LTRO’s), as they will induce much needed liquidity after the crisis period. • Commodity prices softening has happened, but further rationalising needs to be done to help the economy asAll data source – IMF a whole website

Increase in Real Asset Formation
20.00%

•The brightness lingers in the Real Asset Formation 15.00% rising •This also leads to an increase in the manufacturing activity, as was shown by the HSBC PMI till the 2011 10.00% 2012 (E) beginning of the year 2013(E&P) •The Stabilisation of Commodity Prices also seems 5.00% to be a boon to the global economy •Also, the increase in savings rate in different 0.00% economies and a decrease in the percentage of USA Euro Japan China India Latin Africa Zone America region household debt are turning as favourable indicators -5.00% for the economy Gross National Savings as a •These factors along with the monetary easing 40.00% expected to be announced by the governments Percentage of GDP 35.00% are expected to envigour the economy 30.00% • Indian Economy on the other hand requires to re25.00% engineered with a dose of liberalisation and policy 2007 making to remove the slack it has acquired 20.00% 2012 •The weak monsoons may be a risk factor, but 15.00% 2016 (E) addressing proper supply side issues, labour and 10.00% land policies may help 5.00% • Glass Container Industry is benefited when there 0.00% is demand in the economy and the cost of Factors USA Euro China India Brazil Area of Production in the Economy are low

India and the Glass Container Packaging Industry
India GDP Growth Rate
12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00%

GDP Growth Rate

•The Indian Container Glass Industry is expected to be a Rs. 30 Billion business and is expected to grow at 10% to 12% per annum. •India's is one of the lowest per capita glass container consumption at 1.4 kg as compared to 27.5 kg in the USA and 10.5 kg in Japan. •Demand for container glass is driven by the growth in user industry i.e. liquor, beer, pharmaceuticals, cosmetic, perfumery, food and beverages. •Optimism in the Industry is due to Increased consumption of Alcohol and beverages (CAGR of 12%), continued growth of the 3rd largest pharma industry in the world (CAGR 15%), expected doubling of the food processing Industry and a CAGR growth rate of 17% in the cosmetic sector. Per Capital Glass Container Consumption (kg) 100 80 60 40 20 0 South Korea France USA Japan India

•A fall in Investment activity over the year made the GDP fall for the resilient economy of India. •Per Capita Income grew 17.5% during the period. •Foreign Investments came in good numbers during the year and a change in policy is expected to attract further Investments, even in this sector •Swift recovery in consumption led to a proportionate rise in the production of consumer durables •Capacity additions...
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