Float glass cracking under overcapacity, low demand

Highlights:

• Bangladesh's float glass capacity now nearly triples domestic market demand
• Post-pandemic slowdown shattered optimistic construction and real estate growth projections
• Furnaces cannot shut down, forcing loss-making production during weak demand
• Major producers face financial stress amid oversupply and falling prices
• Dumped imports from China and India intensify pressure on local manufacturers
• Industry seeks survival through value-added products and stronger policy support

Bangladesh's float glass industry is grappling with a growing mismatch between supply and demand, as production capacity has surged to nearly three times the size of the domestic market, industry insiders say.

Monthly glass demand stands at around 30,000 tonnes, or roughly 350,000 tonnes a year. By contrast, installed production capacity now exceeds 10 lakh tonnes annually, creating severe pressure on manufacturers who expanded aggressively on the back of optimistic growth forecasts.

Most major investments were planned in 2018–19, when daily demand exceeded 1,000 tonnes and was projected to double by 2025. Those expectations were fuelled by rapid urbanisation, a booming real estate sector and a pipeline of mega infrastructure projects.

However, the Covid-19 pandemic and the subsequent global and domestic economic slowdown derailed those projections. Demand has stagnated and, in some segments, declined, leaving factories operating well below capacity and margins under strain.

Major producers, including AkijBashir Group and Nasir Group, are now facing mounting financial stress amid slowing construction activity, a global downturn and aggressive dumping of imported glass. Fresh uncertainty has also emerged over Meghna Group's planned Tk2,500 crore entry into the sector, raising concerns about whether the market can absorb additional capacity.

Mohammad Hossain Alamgir, president of the Bangladesh Glass Merchants Association, said glass consumption has fallen sharply due to economic deceleration, a slowdown in real estate and mega projects, and weak private investment.

"Local production capacity has expanded significantly, but the construction ecosystem itself has lost momentum," he said.

Infograph: TBS

Inability to scale down production

Two decades ago, Bangladesh imported 80–90% of its glass demand. Strong construction activity at the time made local manufacturing commercially attractive. That dynamic has now reversed, industry sources said, with domestic production surging while demand remains subdued.

Khorshed Alam, chief operating officer of AkijBashir Group, said a fundamental structural challenge of the float glass industry is its inability to scale down production during downturns.

"Once a furnace is switched on, it must run continuously for 10 to 12 years. If production stops, the furnace is damaged, causing losses worth hundreds of crores," he said.

As a result, factories are forced to keep producing even when demand is weak, often selling at a loss or destroying unsold glass simply to keep furnaces running.

"This is not unique to Bangladesh. Globally, factories have been built everywhere, but demand has not grown at the same pace," Khorshed added.

AkijBashir's Tk2,200cr bet under pressure

AkijBashir entered the float glass sector in 2024 with an investment of around Tk2,200 crore, banking on long-term economic growth. Within a year, the investment has turned into a major financial burden.

Company officials concede that assumptions made in 2018–19 no longer hold. Sluggish real estate activity and delayed infrastructure spending have sharply reduced demand.

Currently, total daily glass demand is estimated at about 1,000 tonnes. One established producer supplies nearly 600 tonnes a day, while AkijBashir alone has an installed capacity of close to 2,000 tonnes.

"There is simply no market large enough to absorb this capacity. Competition has intensified, prices have fallen and companies are incurring continuous losses," Khorshed said.

Rising global raw material prices, currency depreciation since 2020 and sharply higher constructiotn coss have further undermined investment viability. Industry estimates suggest factory construction costs have nearly doubled.

Small market, rising investments

Despite the difficult market conditions, Meghna Group is preparing to enter the float glass sector with a Tk2,500 crore investment.

Defending the move, Md Hasan, general manager for public relations at Meghna Group of Industries, said the company is taking a long-term view. "Rapid urbanisation and long-term economic growth offer strong potential," he said.

He added that Meghna plans to focus on quality, product diversification and export opportunities as part of its broader construction business ecosystem.

Nasir Group, which began production in 2005 and operates two major plants with a combined daily capacity of around 1,000 tonnes, is also considering an additional Tk1,000 crore investment. PHP and AB Glass have expanded capacity, while Bogura-based AB Glass is preparing a new unit with a daily capacity of 450–500 tonnes at an estimated cost of Tk1,500 crore.

Dumping compounds local challenges

Local producers said dumping, particularly from China and India, has compounded domestic pressures.

Moshiur Rahaman, head of business at Naasir Group of Industries, said low-priced imports have distorted the market. "Nearly 20% of the glass used in Bangladesh still comes from China and India," he said.

"They are offering discounts of up to 40% to cope with competition," he added. While India has imposed strict anti-dumping measures against Chinese glass, Bangladesh's tariff structure and enforcement remain inadequate.

"Without effective anti-dumping action, domestic producers are competing on an uneven playing field," Moshiur said.

Survival through value-added products

To offset falling prices, manufacturers are increasingly shifting towards value-added and specialised glass products aimed at niche markets.

"This may be the only way to survive. Standard float glass has become a high-volume, low-margin business," said one industry insider. However, he cautioned that diversification alone would not resolve the deeper imbalance between capacity and demand.

Policy gaps risk worsening crisis

Entrepreneurs warn that without stronger policy support, the industry's crisis could deepen further. They point to gas supply constraints, high energy costs, import duties on raw materials and what they describe as policy inconsistencies.

"Local capacity and quality exist, but policy gaps are undermining domestic manufacturers," said one executive.

Industry stakeholders are calling for effective anti-dumping enforcement, rationalised tariffs, reliable energy supplies, export incentives and policies that encourage wider use of locally produced glass.