e-glass weekly - February 12, 2008 | Vol 3, Num 6
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U.S. companies need to find ways to offset Chinese advantages

A typical production worker in China earns about 53 cents an hour compared to $15 in the United States. Chinese employers also have access to tens of millions of rural workers to fill those production positions...

A typical production worker in China earns about 53 cents an hour compared to $15 in the United States. Chinese employers also have access to tens of millions of rural workers to fill those production positions.

Michael E. Collins, a senior associate with Jordan, Knauff & Co., an investment banking firm in Chicago, shared information about Chinese companies during an overview of the residential and commercial window and door industry Jan. 31 at the Insulating Glass Manufacturers Alliance 8th Annual Conference in Sanibel Island, Fla., Jan. 28-Feb. 1.

The other advantages the Chinese companies have compared to counterparts in the United States are lower business costs that include labor, land, taxes, energy and commodities, Collins said. The government loans in China often are not repaid, the Chinese infringe upon intellectual property rights and the country graduates 350,000 engineers a year who can duplicate products, he said. He also noted that the quality of their product continues to improve.

“The people who don’t think the quality is there are the people who have made up their minds that they don’t want to buy from Chinese companies anyway,” Collins said. “Companies that are using Chinese glass report that the quality is absolutely there. They’ve addressed the shipping issues, and it’s coming over undamaged. The price is there. The proof is that the Chinese are starting to win more and more jobs over here.”

The Chinese are picking up more business because American companies can actually see completed, quality jobs on buildings in the United States, Collins said. When an attendee at the IGMA conference told him about a curtain wall project in New York City using Chinese glass, he said he expected a West Coast to East Coast migration but was surprised how quickly the Chinese reached New York.

U.S. companies could compete effectively with China by providing faster delivery times and other services, Collins said.

“Focus on orders that have to be delivered in a very short time period,” Collins said. “Companies should cater to the customer with frequent design changes that require different styles and varieties. You just don’t want four choices. Jobs that need to be customized at the last minute and delivered to the customer are types that typically have to stay over here. Companies also could integrate installation and provide seamless services from selection of glass all the way through installation.”

Disadvantages for U.S. companies include: research and spending viewed as a luxury and being replaced by applied product development; and structural costs, which include corporate taxes, pension benefits and health care, are 31.7 percent higher in the United States than the U.S.’s nine major trading partners--Canada, China, France, Germany, Japan, Mexico, South Korea, Taiwan and the United Kingdom--Collins said.

To stay competitive, U.S. companies can hire an outside consultant to help redesign the organization, Collins said. Also, employees should interact with end customers and, if possible, their customers. Manufacturers surprisingly know little about the people who use their product, he said. "You've got to be a miner of data about your company,” he said.

Companies need to embrace lean manufacturing, decrease setup and change-over times, cross-train workers and increase the technology content of a product, Collins said.

Other topics at IGMA conference

  • Collins displayed a list of trends affecting the industry: consolidation, automation, conservation, litigation, globalization, innovation, professionalism, expansion and contraction.
  • FMI, management consultants and investment bankers to the construction industry, predicted green nonresidential construction to increase to $21.2 billion in 2008 compared to $13.4 billion in 2006. The greatest concern in green building is the first costs of the projects, Collins said. The industry’s key challenge is refocusing life cycle costs. He pointed to a limited willingness to pay for more green buildings despite a cost that is less than 10 percent in most cases.
  • The environment for commercial construction remains favorable because of inexpensive financing, ongoing government and educational construction as well as high corporate profits and plenty of cash on balance sheets, Collins said. The expected strongest sectors are health care, public safety, office and transportation facilities, he said.
  • Collins noted the Association of Foreign Investors in Real Estate ranked the United States the top country in the categories of providing the most stable and secure real estate investments and providing the best opportunity for capital appreciation.
  • Collins also mentioned that larger window and door manufacturers are contemplating an investment in garage doors.
IGMA’s next meeting is June 16-19 at the Westin Resort and Spa in Whistler, British Columbia.

—By Matt Slovick, editor in chief, Glass Magazine

More top stories

For all of the week’s stories, including news about Asahi Glass’ agreement to pay price-fixing fines, click here. Visit www.GlassMagazine.net for daily headline news updates.

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Gymnasium reopens after teen’s fall through glass
Contra Costa College, San Pablo, Calif., reopened its gymnasium about two weeks after a 17-year-old boy fell through a glass roof panel, according to a Feb. 6 article from the college’s newspaper, The Advocate. The teen fell 50 feet after the glass panel broke, injuring his left leg and receiving cuts to his face … read more

Asahi Glass to expand solar cell production
Officials at Japan’s Asahi Glass Co. announced Feb. 5 that the company will spend more than $120 million to establish a new furnace for the cover glass of solar cells and coating lines. The facility will start mass production in the second quarter of 2009 … read more

Schott-Gemtron wins patent infringement suit against Saint-Gobain
The U.S. District Court for the Western District of Michigan ruled in favor of Gemtron Corp., Sweetwater, Tenn., in a patent infringement suit against Saint-Gobain Corp., France, according to a news release Feb. 6. Gemtron is a joint venture between Schott Corp., with North American headquarters in Elmsford, N.Y., and AGC-Flat Glass North America Inc., Kingsport, Tenn. The jury found that Saint-Gobain is infringing United States Patent No. 6,679,573 (“the ‘573” patent”), owned by Schott-Gemtron … read more

NFRC sets 2009 release for nonresidential rating program
The National Fenestration Rating Council, Greenbelt, Md., announced it will release its Component Modeling Approach nonresidential system rating program in early 2009, according to the NFRC February newsletter, released Feb. 4 … read more

PPG announces white paper on low-E glass
Officials at PPG industries of Pittsburgh announced Feb. 1 the release of a white paper summarizing a comparative analysis of four common low-emissivity glasses. The 24-page paper, A Comparison of Energy, Economic and Environmental Benefits of Tinted Low-E Glasses, explores the potential savings of money and electricity in commercial buildings. The report is available from www.ppgideascapes.com or by calling 888/774-4332 … read more

RHI strengthens sales network
Austria’s RHI, the largest refractories supplier to the global glass industry, is expanding its sales network to offer the complete range of refractories to its U.S. customers. New offerings will include fused cast materials, basic and non basic products … read more

USGBC ups grant money
The U.S. Green Building Council, Washington, D.C., has doubled its funding commitment for green building research grants to $2 million for 2008, according to a release Feb. 6. Of the additional $1 million in grants, $500,000 has been allocated for K-12 school facility research related to occupant impacts … read more

Hands, feet, head, eyes, face, respiratory system—all are subject to safety standards designed to protect your workers and reduce the risk
of injury...



Hands, feet, head, eyes, face, respiratory system—all are subject to safety standards designed to protect your workers and reduce the risk of injury.

Personal protective equipment—such as gloves, helmets, goggles, and masks—does not eliminate hazards in the workplace. But it should be an integral part of your overall safety program that includes administrative and engineering controls, workplace analysis, training, and a strong commitment to safety on the part of management and workers.

Find out more about safety programs important to the glass industry through the NGA-sponsored GlassInsure program. Contact the program administrator, Intercorp, at 800/640-7601, or check out www.glassinsure.com.

'American Idol' loves glass

After seeing Binswanger Glass employee Josh Jones on a segment of "American Idol", glassblogger Katy Devlin jumped on the phone to talk glass (and find out if he makes it past Hollywood)...

Well, more accurately, "American Idol" contestant Josh Jones loves glass.

Jones, a 26-year-old lead installer at Binswanger Glass Co. in Atlanta, graced America with a lesson on glass before moving to the music during the Feb. 5 episode of "American Idol." "I have a passion for glass," Jones said during the show... read more

Triple glazing

German manufacturer Interpane Glas Industrie AG introduced iplus 3L and iplus 3CL neutral-colored triple insulating glazing ...

German manufacturer Interpane Glas Industrie AG introduced iplus 3L and iplus 3CL neutral-colored triple insulating glazing. Solar radiation passes through the glazing for solar energy gains, and thermal heat cannot escape due to low-E coatings, according to a company release. The glazing provides 55 percent solar heat gain and 72 percent light transmittance. Iplus 3L reaches a Ug value of 0.8 W/m²K, or watts per square meter Kelvin, at 44 millimeters thick, and reaches 0.6 W/m²K at 36 millimeters thick. Iplus 3CL reaches 0.6 W/m²K at 36 millimeters thick, and reaches 0.5 W/m²K at 32 millimeters thick.
+49 5273 809-0 | www.interpane.net

Construction spending damaged, saved economy last year

According to a recent New York Times article, construction spending is both the cause of America’s recession threat and the only thing that kept the economy out of recession in late 2007. The distinction is between residential and nonresidential construction...

According to a recent New York Times article, construction spending is both the cause of America’s recession threat and the only thing that kept the economy out of recession in late 2007. The distinction is between residential and nonresidential construction.

While falling residential construction contributed significantly to the economic slow-down, the decrease was offset by rapid gains in non-residential construction markets and local government spending. Those markets rose at an annual rate of nearly 16 percent and 10 percent in the fourth quarter, respectively, together adding a full percentage point to the overall growth rate and keeping the economy from decline.

Unfortunately, while residential spending is unlikely to continue falling at the same rate, commercial construction is expected to feel the negative impacts of the credit crunch, with employment rates declining and developers facing difficulty in securing financing. Government wallets also are expected to tighten this year as falling real estate values may reduce tax revenues, which could in turn reduce the number of construction contracts put up for bid … read more

Business headlines

Check out www.GlassMagazine.net for financial news stories throughout the week.

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Novum Structures acquires three European companies
Novum Structures LLC, Menomonee Falls, Wis., acquired three European companies, according to a Feb. 1 company release. The company bought United Kingdom-based companies CoverTex Management Systems Ltd. and Rig’n High Ltd. to form Novum Structures UK Ltd. The existing Novum Structures GmbH, Germany, acquired KFM GmbH, also of Germany … read more

Sapa AB to buy Chinese extrusion company
Sapa AB of Sweden signed a letter of intent to purchase Kam Kiu, one of China’s largest extrusion companies. The company has more than 30 extrusion presses and also provides anodizing, painting and fabrication. Sapa sees the acquisition as a way of getting a strong foothold in China, says CEO Ole Enger. The transaction is still awaiting approval by relevant boards and authorities … read more

Heinaman breaks ground on new facility
Heinaman Contract Glazing of Lake Forest, Calif., broke ground on a 20,000-square-foot fabrication facility and a 5,000-square-foot office, both in Las Vegas, according to a Feb. 4 company release … read more

Glaston Group ends year well
Consolidated net sales grew by 23 percent at Glaston Corp., Finland, according to a company release, Feb. 6. Operating profit, excluding non-recurring items, was 6.2 percent of net sales. In the final quarter of the year, operating profit was 8 percent of net sales.

"Glaston's new strategy, development programs and financial targets were announced in January 2008,” said Mika Seitovirta, president and CEO. “The architectural glass segment, supported by the solar energy market, creates a foundation for the Group's profitable growth. In terms of the appliance and automotive industries, we are focusing on improving cash flow and profitability." … read more

ersol Thin Film, Schott enter agreement
ersol Thin Film GmbH, a subsidiary of ersol Solar Energy AG (ersol), both of Germany, and Schott Solar GmbH, Germany, entered into a cooperative agreement under which they will jointly develop micromorphous technology for thin-film solar cells, according to a news release Feb. 6. Micromorphous thin-film modules have a double-layer structure consisting of an amorphous and a microcrystalline silicon film that allow in more sunlight than amorphous thin-film modules because the two silicon layers convert the whole light spectrum into power … read more