Glass Manufacturer Feels Impact of Low Packaging Demand

North America’s largest glass manufacturer, O-I Global, saw a 12 percent drop in glass shipments from last year’s second quarter. But, demand was up 14 percent over the first quarter of 2009, which the company credits to improved market conditions in Europe and North America.

Glass containers are 100 percent recyclable and can be recycled endlessly. Recovered glass is used as the majority ingredient in new glass containers. Photo: Amazonaws.com

O-I’s sales were down from $2.2 billion in Q2 2008 to $1.8 billion in Q2 2009, and over the first six months of 2009, net earnings were down $162.9 million.

The decrease in sales across many packaging industries has affected recycling because lowered demand for new containers causes a decreased need for recycled material.

For example, the price of clear glass, the most valuable color to recycle, dropped from $24 to $15.20 per ton from January to July 2009, according to the RecycleNet Composite Index.

These market conditions not only affect those who buy glass, but also recyclers who can’t turn a profit collecting the material.

Since September 2008, Earth911.com’s listings for clear glass recyclers in the U.S. and Canada have dropped almost 19 percent. Additionally, the U.S. glass recycling rate has hovered at only 25 percent. However, O-I is focusing on the positive growth over early year numbers.

“As expected, earnings improved from the first quarter,” said O-I’s Chairman and Chief Executive Officer Al Stroucken. “In addition, monthly sales volume comparisons versus the prior year improved throughout the quarter.”