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    Primal Glass: (Case Study) Aswin - 36005

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    harish ramalingam
    Piramal Glass is a leading glass manufacturer that supplies cosmetics, pharmaceuticals, and food/beverage industries. In 2005, it acquired Glass Group to gain access to global markets and technologies. Piramal Glass' strategic shift involved shutting furnaces for food/beverages in the US, transferring pharma capacity to cosmetics/perfumes (C&P), and investing majorly in C&P to become a strong player in that growing segment and serve new customers in BRIC countries. This shift capitalized on Piramal's low costs, infrastructure, and existing premium C&P client base from the Glass Group acquisition.

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    Primal Glass: (Case Study) Aswin - 36005

    Uploaded by

    harish ramalingam
    42 views7 pages
    Piramal Glass is a leading glass manufacturer that supplies cosmetics, pharmaceuticals, and food/beverage industries. In 2005, it acquired Glass Group to gain access to global markets and technologies. Piramal Glass' strategic shift involved shutting furnaces for food/beverages in the US, transferring pharma capacity to cosmetics/perfumes (C&P), and investing majorly in C&P to become a strong player in that growing segment and serve new customers in BRIC countries. This shift capitalized on Piramal's low costs, infrastructure, and existing premium C&P client base from the Glass Group acquisition.

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    36005 Case Study

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    Piramal Glass is a leading glass manufacturer that supplies cosmetics, pharmaceuticals, and food/beverage industries. In 2005, it acquired Glass Group to gain access to global markets and technologies. Piramal Glass' strategic shift involved shutting furnaces for food/beverages in the US, transferring pharma capacity to cosmetics/perfumes (C&P), and investing majorly in C&P to become a strong player in that growing segment and serve new customers in BRIC countries. This shift capitalized on Piramal's low costs, infrastructure, and existing premium C&P client base from the Glass Group acquisition.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    42 views7 pages

    Primal Glass: (Case Study) Aswin - 36005

    Uploaded by

    harish ramalingam
    Piramal Glass is a leading glass manufacturer that supplies cosmetics, pharmaceuticals, and food/beverage industries. In 2005, it acquired Glass Group to gain access to global markets and technologies. Piramal Glass' strategic shift involved shutting furnaces for food/beverages in the US, transferring pharma capacity to cosmetics/perfumes (C&P), and investing majorly in C&P to become a strong player in that growing segment and serve new customers in BRIC countries. This shift capitalized on Piramal's low costs, infrastructure, and existing premium C&P client base from the Glass Group acquisition.

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    PRIMAL GLASS

    (Case Study)
    Aswin - 36005
    Piramal glass is one of the leading glass
    manufacturers in the world supplying to
    Cosmetics and perfumery, pharmaceuticals and
    food and beverage industries. In 2005, Piramal
    glass acquired Glass Group (An US Firm)
    through high leverage for gaining access to
    global markets and latest technologies. They
    spent 300 crore in the firm to turn it around.
    • Piramal Glass had three categories of products: Cosmetics &
    Perfumeries (C&P), Pharmaceuticals and Specialty Food &
    Beverage. As of 2011, C&P was the category generating the
    most revenue (5968 million Rs). 
    • Piramal success in C&P segment was mainly due to difference in
    labour costs between India and Developed countries.

    Reasons for •
    •
    The industry is growing at 5 percent CAGR
    In Pharmaceutical sector in India, there was a shift towards PET

    strategic
    leading to a de-growth of 10 percent.
    • The strategic shift involves a decision to shut down some
    furnaces in US relating to food and beverages. Plus some

    shift
    additional pharma capacity is transferred to C&P segment.
    • The strategic shift was to invest majorly in the C&P segment and
    to shift production capacity  from other categories of glass
    segment to C&P  and become a strong player in that segment.
    • To serve the new customers and the anticipation of increase in
    customer base in BRIC countries Piramal shifted capacity from
    pharma to C&P
    • When you look at the category's performance from 2010 to 2011, only
    C&P has shown a major increase in revenue while the increase in
    revenue in the Pharma category is negligible and the revenue has
    decreased in the Food & Beverages category. Trend wise, this seems
    the most logical shift.

    Advantages • Piramal is a low-cost manufacturer and has a marquee list of clients


    acquired through Glass group acquisition which makes them credible
    for business to other premium cosmetics players looking for

    of the expansion in BRIC countries


    • They have the infrastructure and employees present in the important
    markets of Western Europe and USA which constitute 80% of

    strategic the premium C&P business.


    • There is a huge increase in Revenue generated from C&P segment.
    From 585 Million INR in 2004 to 5968 Million INR in 2011. The

    shift increase in around 10 times. So, increasing the capacity of C&P


    segment makes much sense and it gives better opportunity to
    capitalize the booming segment.
    • The premium products in C&P segment prefers mostly glassware. So,
    the threat of substitutes in this segment is also low.
    • They have an existing marquee client base.
    • They risk moving from a diversified segment to a single segment.
    • The move is based on the forecast of the changing customer demand in India
    to C&P which has been steadily giving revenues for the company with 20% YOY
    growth, but there is risk of stagnation in the C&P market in India, as demand,

    Disadvantag awareness and affordability couldn’t be as same as US & France


    • The decision to shift majority of operations to India in favour of labour costs

    es of the
    can have an impact in developed markets where people mostly buy premium
    products.
    • With rising competition form PETs in India and the shift of capacity from

    strategic
    Pharma to C&P, Piramal could lose market share in Pharmaceuticals Industry in
    India which is already experiencing a 10% de-growth
    • Reducing the capacity in US and reduction in pharma capacity will present an

    shift opportunity for other companies to tap the Pharmaceuticals sector in US.
    • With regards to exporting these premium glass bottles from India (where the
    labor is cheaper), they need find safe and reliable freight options as any
    damage while transport could prove costly.
    • There should be some proper acquisitions similar to
    Glass group where they were able to benefit from
    their technology.
    • Piramal Glass has a good financial background and a
    Recommendation decent global market share of 6% in the C&P category.
    • Focusing more on the C&P market which is
    s growing well will bring in more revenue and establish
    Piramal Glass as a major player in the category.
    • The company must try to increase its presence and
    widen the opportunities in Pharma and food &
    Beverages segment.
    • They must ensure production standards of the
    highest quality so that marquee clients don't drop off
    and in order to attract more clients.
    Thank
    You!

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