BG Container Glass (BGC), a subsidiary of Bangkok Glass, is to build a 400 tonnes a day furnace in Ratchaburi, Thailand at a cost of Bt2 billion ($58.8 million).

Supasin Leelarit, Bangkok Glass executive vice president for the group, told The Nation newspaper the factory would support greater domestic demand for glass containers.

It will also help overcome an energy shortage in the company’s factory in Rayong, which is facing an inadequate supply of natural gas.

The Ratchaburi plant will be completed and ready to start operations in the third quarter of next year.

“As we want to supply our glass container products and services to our customers, we have to locate our factories in various areas where our customers’ plants are located. For example in Khon Kaen and Prachin Buri, our factories are located next to our customers’, such as Boon Rawd and Kratingdaeng,” Supasin said.

BGC currently operates five glass-container factories in Pathum Thani, Ayutthaya, Khon Kaen, Rayong and Prachin Buri, with combined production capacity of 3,335 tonnes per day or 1.2 million tonnes a year (around 4.5 billion bottles a year).

The company currently controls 39% of Thailand’s glass-container market, which is worth more than Bt30 billion.

Supasisn said Bangkok Glass was ready to move forward with its strategies to enter different business segments across the Asean region.

Last year, Bangkok Glass confirmed its intention of becoming a “total glass solutions provider”.

Thus BGC was established as Bangkok Glass’s latest subsidiary and in charge of the production and distribution of glass containers, both in Thailand and elsewhere in the Asean region.

“BGC aims to grow its sales by 10% to 920,000 tonnes this year. We increased our sales by 4% year on year in the first six months of this year,” Supasin said.

The company exported almost 10% of its production to countries including Myanmar, Malaysia, Australia, Spain and South Africa. In Spain in particular, its prices are competitive with local suppliers.

“Our exports are aimed at coping with the problem of economic fluctuations in Thailand. However, the internal demand for glass containers in Thailand is still high and we are able to sustain our growth every year.

"So we need to respond to domestic demand as our priority. That is why we keep the export proportion at only 10% of our production,” he said.

The total value of Thailand’s glass-container industry was estimated at more than Bt30 billion this year. It grew by 4-5% year on year in the first six months.

Some 10 years ago, the Thai glass-container industry enjoyed an annual growth rate of between 12 and 13%.

The lower growth rate now is due to the decrease in volume of glass packaging production and distribution, as there is a tendency for more usage of plastic bottles for certain types of beverage products.