The Russian invasion of Ukraine has led many businesses to withdraw their operations from Russia. Companies in industries such as banking, entertainment, retail and travel have all withdrawn or suspended operations. The same can’t be said for all companies in the glass industry.
Koch Industries, parent company of Guardian Industries, is the only U.S.-based glass company with float operations in Russia. The company has two glass manufacturing facilities in the country with 600 employees; an additional 15 employees are employed in Russia outside of Guardian.
Dave Robertson, president and COO of Koch, issued a statement last week defending the company’s decision to not shut down its Russian float operations.
“While Guardian’s business in Russia is a very small part of Koch, we will not walk away from our employees there or hand over these manufacturing facilities to the Russian government so it can operate and benefit from them (which is what The Wall Street Journal has reported they would do),” he said in the statement. “Doing so would only put our employees there at greater risk and do more harm than good.”
The company isn’t unfamiliar with such a takeover. In 2016, the government of Venezuela reportedly seized Guardian Industries’ float glass plant in Venezuela. According to a 2017 USGNN report a year following the takeover, “the facility has reportedly restarted operations, while the workers have faced blatant political coercion from Venvidrio, the state-owned company that manages the factory.” (Part two of our report is available here.)
In his statement last week, Robertson added, “Koch companies are complying with all applicable sanctions, laws, and regulations governing our relationships and transactions within all countries where we operate. We will continue to closely monitor the situation and keep you updated as needed.”
The statement also notes, “The health, safety, and wellbeing of all employees is our top priority, including our employees in Ukraine, Russia, and thousands more across Europe at various Koch companies. Since the conflict started, Koch has provided financial assistance to employees and their families from Ukraine and humanitarian aid to those affected in neighboring countries, and we will continue to do so.”
Guardian isn’t the only float glass company with operations in Russia. AGC Glass Group and NSG Pilkington, both based in Japan, also have float operations there.
The AGC Group issued a news release addressing the status of its Russian operations. “In the light of the current situation, the group has decided to suspend investments in the country, including the periodic repair of glass manufacturing furnaces. Regarding the automotive glass business, the group has largely scaled down the production and shipments to automobile manufacturers in Russia.” According to Niels Schreuder in AGC’s press office, the float line is still operating.
Pilkington began its operations in Russia in 1998. According to the website, “The main task of the company is the production of energy-efficient glass and the development of new technologies for the production of functional glass and translucent structures.” At press time, company representatives had not responded to USGNN’s request for comment to confirm whether the plant is still operating.
Paris-based Saint-Gobain owns 30% of a float glass facility in Russia, but is not involved with its operations. Susanne Trabitzsch from the company’s press office says 70% is owned by Trakya Cam, a subsidiary of the Sisecam Group of Turkey. At press time, Sisecam had not responded to USGNN’s request for comment.
“Our local activities continue to operate, though in an autonomous and downgraded mode, in order to maintain the employment of our employees and to mitigate the consequences of this conflict for them and their families,” she told USGNN. “Saint-Gobain is respecting all applicable sanctions in addition to stopping all exports to customers in Russia and Belarus, as well as imports from the two countries. All new investment projects have also been suspended.”
According to Trabitzsch, Saint-Gobain has insulation, gypsum, and construction chemicals operations in Russia for the domestic market.
“ … Russia represents a very small part of our business (less than 1% of our global sales),” she said.
A glass manufacturer’s decision to cease production of a float line is one based on significant planning. According to Bernard Savaete, a retired industry consultant with more than 50 years in the industry, including many years with PPG, “Stopping a glass production line (float or container or for other usages) is a tragic process which jeopardizes the production equipment (mainly the furnace) and which could question a restart,” he told USGNN. Adding that, in the case of a crisis, manufacturers may opt to put their line on a “hot hold.”
According to a Glass For Europe white paper, “Hot hold operations are the primary option for a float glass manufacturer to cease production while preserving the integrity of its industrial equipment. Flat glass making is a high-temperature continuous production process … A float glass plant cannot switch-off production from one day to the other in an uncontrolled manner. The temperature inside the industrial furnace, normally between 1500 and 1600°C, needs to be lowered gradually while progressively feeding less raw materials. A flat glass furnace is on ‘hot hold’ when the furnace temperature has been lowered to approximately 1200°C, and glass production is stopped. Almost no virgin raw material is fed into the furnace anymore but only scrapped glass. This is meant to maintain the melt within the furnace to the very minimum (mixture of scrapped glass and raw materials which start melting) to preserve the furnace’s inner and outer structures that are made of refractory bricks. The adequate temperature of a flat glass furnace on ‘hot hold’ is around 1200°C. Lower temperatures would generate a thermal stress on refractory bricks, which would irreversibly damage the furnace.”
This story is developing and will be updated as new information becomes available.