Value Added Coatings Can Save Struggling Glass Manufacturers

The glass industry is more competitive today than any time in history. Manufacturers must have value
added products to remain competitive. In developed countries, most windows have a Low-E coating.
Low-E is expected to remain the highest volume value added product produced for most facilities. With
Low-E being the mainstay value added product, manufacturers must focus on providing the best Low-E
product when looking to add or expand their range of value added products.
Analysis of trends in energy costs, regulations, and markets all point to an increased demand for Low-E
in the future. Facilities with existing value added product lines should consider expanding their installed
capacity now to stay ahead of market expansion. Major capacity upgrades and new value added
installations often take a year or longer to complete. Long lead times on upgrades mean that in a strong
market manufacturers without adequate capacity will lose market share.
Even as efforts to increase energy efficiency become increasingly popular, energy demand continues to
rise. According to the "EU Energy Trends to 2030" report (prepared by the European Commission)
global fossil fuel prices (oil, gas, and coal which the glass industry relies on heavily) will increase by 39%
over the next 10 years. As energy prices rise market forces will drive the cost per ton of base glass up.
Value added process such as CVD coating use relatively little energy, therefore the incremental cost to
produce value added products will remain relatively constant compared to growing base glass costs. As
the price gap between base glass and value added glass shrinks, demand for base glass will fall.
Regulations aimed at reducing emissions and lowering energy use have had a major negative impact on
glassmaker's profit margins in developed areas such as Europe, the US, and even China. Glass
production while an environmentally clean industry produces a large amount of CO
2
. Many new
regulations are aimed at reducing CO
2
emissions and even developing countries are under increasing
pressure to meet even more stringent regulations. As with energy costs, meeting these new
requirements will drive up base glass prices. Value added products tend to fall under easier to meet
pollution regulations and the price of complying with these regulations are already built into the cost of
the system.
Sudden changes in regulations can and do occur quickly, leaving manufacturers in an unprofitable state.
While it would be wise to build compliance with stricter regulations into existing budgets, there are
often exemptions and credits for manufacturers that produce green or energy saving products. CVD and
sputtering systems can both produce energy saving coated products such as Low-E, but the AcuraCoat
CVD system in particular can produce TCO (Transparent Conductive Oxide) coatings that are in demand
by large solar manufacturers. Producing components for solar panels may qualify manufacturers for
exemptions and or credits. TCO products have a substantially higher profit margin than base glass, or
even Low-E; higher margins will put producers with these systems in a better position to comply with
regulations and remain profitable.
Sputter coatings have traditionally been able to comply with energy standards that CVD coatings have
struggled to meet but modern CVD coatings such as those produced by the AcuraCoat systems can now
exceed even the most stringent requirements. IG units with AcuraCoat glass can have U values (U
value is a standard measure of thermal conductivity) down to 0.2 and a R5 (R value is a standard
measure of thermal resistivity) insulation rating. High haze has traditionally been a problem with CVD
coatings at lower U values but new advances have allowed Stewart Engineers' AcuraCoat Low-E to have
haze so low it cannot be perceived.
Market demand for value added glass is increasing faster than demand for base glass. Growth in
demand for energy efficient glass alone is growing by 15% per year (base glass demand is growing by
5%.) Consumers are concerned about energy efficiency which is driving them to Low-E products with
lower U values that older coating facilities cannot produce. Window units are being produced with
double or even triple glazing, and lower cost and higher performance windows are also decreasing the
payback time for investment in energy saving windows. Combined the above factors are dramatically
increasing demand for coated glass.
Overall glass demand will grow in the future meaning manufacturers with a high value added capacity
will fare the best. Sputter coating installations have a much lower capacity than similarly priced CVD
systems. Manufacturers seeking to install or expand their value added capabilities should strongly
consider the AcuraCoat systems offered by Stewart Engineers. AcuraCoat systems are capable of
converting up to 75% of base glass production into a broad range of value added products. Further,
installation and production costs are lower than sputtering systems; the AcuraCoat system is the best
choice for most facilities.
Manufacturers who do not invest in value added products early enough and gain the skills necessary to
produce them efficiently and profitably will be caught on the wrong side of the trends in the glass
industry. Stewart Engineers provides both the equipment and knowledge that can keep your facility at
the forefront of technological changes in the glass industry.