Glass industry recovering from the crisis
Published: 15 August 2012
The Czech glass industry, according to the Association of the Glass and Ceramic Industry of the Czech Republic (ASKP ČR [1]), accounts for 1.5% of global glass production. The sector is strongly export-oriented and therefore dependent on foreign demand, especially from EU countries. The biggest sales are generated by the sale of flat glass for the construction and automotive industries.[1] http://www.askpcr.cz/
The first signs of recovery can be seen in the glass industry in the Czech Republic, one of the traditional sectors of the nation’s economy, after the crisis it suffered in 2008 when the bankruptcy of several large companies led to thousands of job losses. The number of people working in the export-oriented glass industry has increased slightly, thanks partly to the success of smaller ornament companies. As the situation stabilises, wages in the sector have begun to rise.
Background 2007–2011
The Czech glass industry, according to the Association of the Glass and Ceramic Industry of the Czech Republic (ASKP ČR), accounts for 1.5% of global glass production. The sector is strongly export-oriented and therefore dependent on foreign demand, especially from EU countries. The biggest sales are generated by the sale of flat glass for the construction and automotive industries.
In 2008, the glass industry was in crisis (CZ0810039I, CZ0811029I). The bankruptcy of several producers within Bohemia Crystalex Trading and the Porcela Plus group – companies related in terms of their assets – and the collapse of glass and ornament-making company Jablonex meant thousands of people lost their jobs in 2008 and 2009.
| Year | 2007 | 2008 | 2009 | 2010 | 2011* |
|---|---|---|---|---|---|
| Sales in current prices (billion) | CZK 52.67 (€1.98) | CZK 49.81 (€1.87) | CZK 38.07 (€1.44) | CZK 36.72 (€1.42) | n.a. |
| Number of employees | 34,380 | 31,240 | 19,869 | 18,885 | 20,000 |
| Average wage in sector | CZK 19,276 (€725) | CZK 20,794 (€781) | CZK 22,364 (€847) | CZK 23,495 (€931) | CZK 25,000 (€969) |
* Preliminary results in 2011 – Source: Trade Union of Workers in the Glass, Ceramics, Glass Jewellery and Porcelain Industry (OS SKBP)
Source: ASKP ČR
According to the ASKP ČR, 2010 was not as tough for the glass and ceramic industry as 2009. Although forecasts for 2011 were less favourable, with difficulties caused by growing competition from the Third World, the increasing prices of energy and raw materials, and unfavourable economic development in the EU, the results have been surprisingly positive. The partial recovery has been, to some extent, thanks to a development of relatively small ornament and trinket-making companies. The number of employees in the sector grew, returning to somewhere near 2009 levels.
Vladimír Kubinec, Chair of the Trade Union of Workers in the Glass, Ceramics, Glass Jewellery and Porcelain Industry (OS SKBP) which represents about 12,000 employees said:
Not only is the number of employees increasing, but also wages are growing. Last year they grew by about 5% to CZK 25,000 (€969) and thus exceeded the national average. For this year we have also managed to negotiate another wage rise of 2–3%.
The number of employees in the sector is also expected to continue its slight growth. In Kubinec’s opinion, traditional producers of beverage glass and household glass are particularly optimistic about a further rise in production.
Trade union membership dips
Nevertheless, the collapse of large companies has, according to Kubinec, seriously affected trade union membership. He said: ‘We have no representatives in many new companies.’ In Kubinec’s opinion, employees have quickly forgotten that it was the glass industry trade union that defended their interests when they were left without incomes after the collapse of the glassworks. The glass industry trade union, says Kubinec, fought for compensation for wages and state support for these employees (CZ0810039I). It pushed for legislative amendments, so that the situation should never be repeated where employees were left without any income at all after the start of insolvency proceedings.
Commentary
At present, the situation in the glassmaking sector is stabilising, according to the ASKP ČR. However, the future of the industry depends on how far companies are capable and willing to invest in research and development.
Soňa Veverková, Research Institute for Labour and Social Affairs
Eurofound recommends citing this publication in the following way.
Eurofound (2012), Glass industry recovering from the crisis, article.
