For Jebel Ali Container Glass Factory (JACGF) 2003 was a satisfying year, the company’s sales having shot up by a tidy 12 per cent despite several constraints.

The year witnessed a very large jump in the cost of energy, insurance and shipping, but JACGF was able to register sales of Dh112 million ($30.4 million) against Dh100 million in the previous year.
The year also saw a significant surge in demand for glass containers worldwide, a development that was understandably welcomed with great enthusiasm by the company, which is about to complete a major expansion in its plant.
According to general manager Abdul Elah Al Hasso, the expansion entails putting up an additional production line to make it three in all, raising production capacity by 33 per cent from 1.2 million bottles per day to 1.6 million bottles.
There will also be a complete new facility to meet the increased demand for decorated refillable bottles, and this expansion will double the decorating capacity from 500,000 bottles per day to one million bottles per day.
With the additional facilities, the product range will be extended to cater to the demand for larger and heavier bottles and wide-mouth food jars. The new configuration will expand the range of glass containers to include 1.0 to 1.25 litre bottles and food jars.
JACGF, whose owner is Sheikh Abdul Khaliq Saeed, belongs to the Jeddah-registered AK Saeed for Trade & Industry Company Ltd. Commercial production started in the last quarter of 1998 with an initial investment of $65 million and a further investment of $8 million. The company operates in Dubai’s Jebel Ali Free Zone in an area of 70,000 sq m.
The demand for empty glass containers by bottlers and food manufacturers in the UAE is around 50,000 tonnes per year (tpy), all of which can be met by Dubai producers. The demand for empty glass containers in the Gulf is 300,000 tpy, all of which can be met by Gulf manufacturers. Demand from the UAE and the Gulf has been rather steady and has witnessed a modest increase in the last two years.  But Gulf producers no longer have to rely absolutely on regional demand. Their sights are clearly on the broader picture, and it is not uncommon in this global village era for manufacturers in the UAE to receive requisitions for their products from distant corners across the continents.
JACGF in fact exports 70 per cent of its annual production to the Gulf and countries beyond the region including Australia, Africa (east, west, north and south), Europe, the Far East and the Indian subcontinent.
It was with such a global clientele in mind and the possibility of fresh markets that JACGF ventured to expand its production. It will cost the company $30 million and work is already in an advanced stage with the first phase due to be operational by May 2004 and the rest of the project scheduled for completion by the third week of July this year.  Quality equipment will be the keynote of the expansion and it will come from various manufacturers from Europe, the US, Japan and New Zealand. Emhart Glass of Switzerland will supply the glass-forming machine while EW Bowman of the US will manufacture the Lehrs. The Palletisers are the latest technology using robots from the Japanese manufacturer Kawasaki. The decorating machines are from Struts of the US.
With the new equipment and additional capacity, JACGF has already secured new customers while existing customers have enlarged their order book. But it is upbeat, mindful it has what it takes to withstand the competition. Optimistic from 2003’s good results and encouraged by the markets it has already penetrated, the company expects to still achieve a modest growth in sales, pushing the turnover to Dh120 million in 2004.
“The key to finding new customers to book and sell the machines’ production time is to provide top-quality glass to the food and beverage industry,” says Al Hasso. “It is a business-to-business environment. Expanding market share comes as the direct result of meeting customer requirements from beginning to end.”
JACGF has been doing that admirably. It provides full customer care, from the concept and design stage to door-to-door delivery on time. Its products also have the sure mark of quality, the factory having received the ISO 9001, HACCP (Hazard Analysis and Critical Control Point) and SPC (Statistics Process Control) certifications. Observes Al Hasso: “It is the ability to provide an excellent product and deliver it on time that keeps the new buyers coming.”
That excellence in products and service has seen it winning orders from some of the biggest names in the food and beverages market — from leading carbonated drinks makers Coca Cola and Pepsi to Heinz, Master Foods, Nestle, Canada Dry, South African Breweries, Schweppes and RC Cola.
Al Hasso tells just how JACGF bagged such a roll call of bigwigs. “JACGF has two distinct features, which keep it as a major player in the glass bottle manufacturing business: it has the most technologically advanced manufacturing capabilities and world-renowned glass-making experts. The overseas buyers are always keen on acquiring lighter weight containers, which are strong enough to meet strict quality specifications and be commercially viable. JACGF has proved over the years it can manufacture and deliver such containers.” Last year, demand from customers far afield was also driven by the weaker US dollar in 2003, which made their own currencies stronger.
A heartening point for glass manufacturers is the preference that bottlers have for glass containers, the trend being to have used bottles refilled. As glass bottles can be refilled up to 25 times before they are discarded, it is cheaper in the long run for bottlers to use glass bottles than other packaging material. Incomes would have been higher but for the higher costs of fuel and freight which drive up the cost of raw materials and consequently of production.  Once natural gas replaces heavy fuel oil, costs will dip with the consequent positive impact on production.
“The main challenge is to keep the cost of production low enough to achieve an acceptable return on investment,” says Al Hasso. “Finding new production techniques and cheap sources of materials will always be a challenge; there is however a complete dependency on imported expert manpower in the field of glass technology. We are not aware of a single institution or university in the Middle East that offers a degree course in glass technology.
“The industry also relies on the outside world for the manufacture of moulds, as there is not a single foundry in the area that is producing reliable and durable moulds for the mass production of bottles. There are some capabilities in Iran and Egypt but these are not big enough to cater to the needs of the glass factories in the area.
“Glass is versatile when it comes to designing bottles for special campaigns or world events such as the World Cup for soccer. The bottlers in the Gulf and other markets are constantly seeking new designs to make their beverages more appealing to the consumer. The trend nowadays is to make more fancy bottles with less glass content without compromising bottle strength or quality.”