The production capacity of Bangladesh’s float glass industry grew rapidly over the past decade. Entrepreneurs also made sequential investments anticipating increased demand for glass in residential buildings, commercial complexes, industrial plants and infrastructure construction. Existing factories have also expanded their production capabilities, while market demand has not kept pace with these investments. Demand for float glass has recently declined due to a slowdown in the construction sector, high inflation, rising interest rates and sluggish public and private investment. Current production capacity in the sector consequently far exceeds actual local market demand.
This wide gap between demand and capacity has created new risks for the industry. With a large portion of factory capacity remaining idle, fixed cost pressures are mounting. Uncertain supplies of gas and electricity are also disrupting production. In this furnace-dependent industry, once the manufacturing process is initiated, maintaining continuous operation is crucial. Interruptions in energy supply not only reduce output but often drive up production costs and equipment maintenance expenses.
In the early stages of the float glass market’s development in Bangladesh, local production capacity was limited. Recognising the potential for expansion in the construction sector and the opportunity to reduce import dependency, entrepreneurs stepped forward with large-scale investments. At one point, local production capacity reached a level capable of fulfilling a major share of domestic demand. New investments and expansions also continued unabated.
The journey of the glass industry in Bangladesh began in the early 1960s, with an initiative to establish the state-owned Usmania Glass Sheet Factory in Kalurghat, Chattogram in 1959, and the facility began production in 1961. For a long time, this remained one of the primary industrial glass manufacturing institutions. As construction and urbanisation increased, the demand for glass gradually rose. Following this, the private sector became more active in glass production during the 1990s. MEB Glass began producing sheet glass in 1997. But even during this period, a significant portion of the glass market remained dependent on imports.
A major shift occurred in the country’s glass industry in the mid-2000s, when the local production of modern float glass began. In 2005, the PHP Group and Nasir Group started manufacturing float glass domestically. This not only reduced import dependency but also established a new industrial foundation for modern glass production in the country. With the rapid expansion of construction, real estate and urbanisation, the float glass market also grew quickly, resulting in local entrepreneurs investing large sums to increase production capacity.
In the following decade, the rapid growth of the construction and housing sectors accelerated the pace of new investments in the country’s glass industry. As the use of glass increased in high-rise buildings, residential and commercial structures, industrial factories and various infrastructure projects, the demand for float glass expanded rapidly. During this period, major producers planned to set up new units in addition to expanding the capacity of existing factories, as well as in the production of various value-added glass products, including tempered, reflective and soundproof glass, beyond standard float glass.
At the end of the second decade of the 21st century, the industry saw further structural shifts, with new entrepreneurs entering the market with substantial investments. In 2024, Akij Bashir Group established a large-scale glass factory in Madhabpur, Habiganj, with an investment of BDT 32 billion. With a daily production capacity of approximately 600 tonnes, this project significantly increases the production capacity of the country’s glass industry. Meghna Group has also planned investments in this sector.
Silica sand is the primary raw material for glass manufacturing, which is produced by heating it at high temperatures along with soda ash, dolomite, limestone and salt cake. The current annual demand for glass in the country is 350,000 tonnes, against a production capacity of 1 million tonnes. The local availability of silica sand, the core component, played a role in the growth of this industry; however, several other raw materials must be imported. During the tenure of the interim government, sand extraction was halted due to environmental concerns, consequently nearly doubling the sand price and further increasing production costs for manufacturers in this sector.
Industry insiders say that the country’s economic, urbanisation and future growth of the construction sector were taken into account at the time of investment decisions. But the momentum in the construction sector did not increase at the expected level subsequently. Consequently, the market expansion expected to be driven by the new capacity has not fully materialised in reality. Around 2018–19, the float glass market in the country experienced an average growth rate of 15 percent, with some instances reaching 20 to 30 percent. At that time, the float glass market was expanding rapidly, prompting entrepreneurs to become interested in new investments with the expectation that it would double within five years.
But a slowdown in the construction sector and the overall economy followed the COVID-19 pandemic, preventing the rapid market growth that had been anticipated. The growth of the glass market has declined significantly compared to before. It is now difficult to say that there is significant growth in the float glass market; rather, with demand having fallen, its growth is currently in a stagnant stage. In other words, the high growth expectations held by entrepreneurs before investing did not play out in reality, creating a situation of overcapacity in the industry.
The high inflation over the past few years also reduced investments in housing and personal construction as people’s real purchasing power has declined. Rising bank interest rates have concurrently increased the cost of financing new projects for developers and entrepreneurs, slowing down the pace of constructing new buildings, residential projects and commercial structures. This slowdown in the construction sector has directly impacted the float glass market.
A major vulnerability of the industry is that a large portion of its market depends heavily on the construction sector. Float glass is used in various applications, including building windows, doors, facades, partitions and shopfronts. When investments in housing and commercial construction decline, the demand for glass drops rapidly. Delays in the construction of large projects particularly impact glass orders. If a project’s construction is delayed by several months or a year, the corresponding demand for glass is not generated during that period. A reduction in the approval and implementation of new projects similarly creates a long-term deficit in market demand.
Under these circumstances, it has become crucial to establish new factories along with creating new markets to develop the new industry. Expanding the market for value-added products such as high-value processed glass, energy-efficient glass, tempered glass and laminated glass can enable greater value addition from the same production capacity.
The float glass industry is fundamentally dependent on furnaces operated at high temperatures. So gas and electricity are among the primary production inputs for this industry. Unlike many other industries, float glass factories cannot start and stop production at will. Maintaining continuous furnace operations is vital for production. But manufacturers have long been facing problems due to low gas pressure, irregular supply and power crises in the country. Without adequate fuel, it is impossible to fully utilise the factory’s production capability, disrupting production planning.
Nasim Biswas, president of the Glass Manufacturers and Exporters Association of Bangladesh (GMEAB) and managing director of Nasir Float Glass Industries, told Bonik Barta that the country’s glass industry currently faces excess production capacity relative to demand. He noted, “If exports could be increased alongside the local market, a significant portion of this underutilised capacity could be harnessed. The most severe problem facing this industry is now the energy crisis. Due to the lack of adequate fuel, maintaining furnace operations has become challenging. Once a furnace is ignited, it must remain operational for ten years; if it is shut down for any reason, restarting it requires one to two years and incurs a cost of BDT 1.5 to 2 billion. While diesel or furnace oil can be used as alternatives to gas, these are significantly more expensive, and ensuring the necessary oil supply is difficult. The government shouldn’t view the glass industry like other sectors but should instead consider the reality of the situation and prioritise ensuring energy supplies. The government should implement an urgent policy to secure energy for the few remaining glass factories, considering the significant investments and employment they support.”
Industry insiders point out that even when production declines, fixed costs for factories do not decrease at the same rate. Expenses such as loan interest, employee salaries, factory maintenance and infrastructure costs must still be met. When the capacity utilisation rate drops, the production cost per unit of glass increases. Beyond energy supply, the prices of raw materials and other import-dependent inputs are also exerting pressure on the industry. Since a significant portion of the raw materials and machinery is imported, fluctuations in dollar exchange rates, import costs and international commodity prices directly impact production expenses. Meanwhile, rising bank interest rates have increased financial burdens for manufacturers. Companies consequently are caught between rising production and operating costs and weak market demand that limits their ability to increase product prices. In this situation, not only are profit margins shrinking, but many firms are also facing pressure on their cash flow.
In the current situation of the industry, the most pressing question is how much of the existing capacity is actually being used. When production capacity significantly exceeds demand, there is a natural tendency for intense market competition. If producers resort to price discounts or selling products at comparatively lower prices to maintain market share, their profit margins may shrink further. Conversely, even when a large portion of capacity remains idle, factories must continue to bear fixed operational costs. The prolonged underutilisation of capacity may consequently weaken the financial indicators of some enterprises over the long term.
Under such circumstances, the economic justification for new investments is also being called into question. If new factories are established or major expansions are undertaken even though existing market capacity is already sufficient, the supply-demand gap may widen further, posing the risk of increased pressure on prices and profit margins across the entire industry.
Another critical aspect of the float glass industry is its heavy reliance on bank financing. Since setting up a float glass factory requires a substantial amount of capital, entrepreneurs must rely not only on long-term project loans but also on working capital loans. When sales decline due to weak demand, the company’s cash flow decreases, yet bank interest payments and other financial obligations must still be met regularly. If this situation persists for an extended period, it can create significant pressure on debt repayment.
Consequently, excess capacity in the float glass industry represents not only a business risk for entrepreneurs but also a credit risk for financing banks. The risk to repayment capacity is increasing, particularly for projects with large loan volumes and low capacity utilisation rates. But stakeholders note that electricity and fuel crises are affecting all industries, not just the glass sector. This has placed many sound borrowers at risk of defaulting on their loans.
Pubali Bank PLC, a private sector bank, has investments in Nasir Glass, a major enterprise in the glass industry. Mohammad Ali, the top executive of the bank, told Bonik Barta that gas is an essential element in glass production. He noted, “It’s only natural for a gas crisis to adversely affect glass manufacturing companies. Aside from glass, nearly all industrial establishments require gas. So the economy can’t function without it. The government must find a long-term and sustainable solution to the gas crisis.”
According to industry insiders, evaluating the current situation of the float glass industry based solely on total production capacity is insufficient at this moment; considering indicators such as factory capacity utilisation rates, sales growth, production costs, average selling prices, cash flow and bank loan volumes collectively is crucial instead. Having high production capacity in an industry is not inherently a problem if the market expands rapidly. Problems arise only when the capacity utilisation rate remains low for an extended period while new investments continue. In such cases, excess capacity risks turning from an industrial asset into a financial burden.
The float glass industry also holds potential for the future. With the long-term growth of the country’s economy and construction sector, there is an opportunity for glass demand to increase. Creating export opportunities beyond the domestic market can open up new avenues for utilising excess capacity. Increasing investments, particularly in the production of high-value processed glass alongside ordinary float glass, can enable greater value addition from the same raw materials and production infrastructure. The specialised glass usage is also likely to grow in modern buildings, green buildings and energy-efficient structures. Boosting the volume of glass exports abroad will also create opportunities to utilise production capacity more thoroughly.
Overall, the country’s float glass industry currently stands at a critical crossroads. On one hand, massive production capacity has been built over the past few years, while on the other hand, market demand is not growing proportionally due to weaknesses in the construction sector. Uncertainties regarding gas and electricity, high interest rates, import costs and intense market competition are also creating extra pressure on producers.
If this situation prolongs, its impact will not be limited solely to the profits of float glass producers; it could also affect the quality of bank loans and the ability to recover investments. So the recovery of the construction sector, stability in energy supply, effective utilisation of existing capacity, production of value-added goods, and expansion of export markets have now become the four most crucial factors for the sustainable future of the float glass industry. In this state, surviving the current circumstances and waiting for market recovery have become major challenges for the producers in this sector.