EXPORT OPPORTUNITY PROFILE (EOP)

Insulated & Tempered Glass

Export Consultancy Unit (ECU)

Marketing Consultancy Division (MCD)
Jumada Thani, 1431
(June, 2010)
 Export Opportunity Profile

Insulated & Tempered Glass

Purpose

The purpose of this Export Opportunity Profile (EOP) is a cursory investigation

into the potential for exporting the range of insulated and tempered glass
products from the KSA to various international market sectors.

It is hoped that this EOP will provide local manufacturers with direction indicators
to potential export markets. The prospective opportunities identified in this EOP
should be used by the local producers to spot suitable export markets for their
respective products. However, it is highly recommended that once the local
companies have identified their respective export opportunities, they should
undertake more detailed primary and secondary market research and any other
suitable investigations to evaluate the specific potential, in an appropriate manner,
in each/any of the overseas territories selected.

Product & Application

The insulated and tempered glass sector covers a wide range of products, a
description is provided in the following:-

 Insulated glass is composed of two or more glass panes separated by aluminum spacers and
glued together. Modern factories usually put special chemical granules inside the spacer in
order to absorb humidity and prevents the formation of dew inside the glass cavity. The
theory of insulated glass is to trap the air (or sometimes inert gas) between the two glass
panes and prevent the conventional current from transferring heat between the building and
the external environment.
 Tempered glass is basically a single sheet glass, which is toughened by tempering. The
tempering process involves heating the glass panels to a very high degree inside special
furnace followed by sudden cooling. The purpose of the tempering process is to give the
glass extra strength and make it safe when/if it breaks. In the Kingdom, tempered glass is
used in the following applications:-

Thickness (mm) Main Application

6 Double glazing, especially in residential windows
8 Office partitions
10 & 12 Frameless doors, showroom facets and partitions

Applications for the two types of glass include double glazing (especially in
residential windows), office partitions, frameless doors, shower facets, etc. The
glass can be proccesed in different geometry shapes with it being processed to be
clear, tinted, and/or reflective.

 
 Local Manufacturing Activities

In respect to the above types of insulated glass, there are currently 11

manufacturers in the KSA who produce both the insulated and tempered glass
products, a further five that produce only insulated glass and another six that
produce only tempered glass – a total of 22 local companies producing the range of
glass identified in this EOP. From the estimated total installed capacity, the under
utilised capacity available for exports, from these producers, appears to be in the
region of 28% for the two types of glass products. The following table provides
estimates of installed capacity, together with local and export sales (in M2) for
2009:-
Total Active Tot. Inst. Est. Local Est. Export Available Est. Capacity Avail Cap - % of
Glass Type Est. Total
Factories Cap. Sales - 2009 Sales - 2009 (Surplus for Export) Installed Capacity
Insulated 2,062,000 1,048,995 148,081 1,197,076 864,924 42%
22 Tempered 3,325,234 2,633,115 29,376 2,662,491 662,743 20%
TOTAL 5,387,234 3,682,110 177,457 3,859,567 1,527,667 28%

From the table it can be clearly seen that there is a level of local installed capacity
available for potential export. The KSA producers’ range of insulated and
tempered glass products could utilise the idle capacity to export to countries
where a demand exists for these products.

HS Codes
Primarily, the customs/tariff codes used for the import and export of the
insulated and tempered glass products by local producers is covered by the
following 6-digit HS Code:-

HS CODE COMTRADE DESCRIPTION

700719 Safety glass, toughened (tempered), non-vehicle use
700800 Multiple-walled insulating units of glass
Source: Comtrade

In respect to this EOP, it should be noted that the above HS Codes have been used
to identify export opportunities for the KSA’s insulated and tempered glass
products. In terms of import/export statistics, it should be noted that the UN
Comtrade data is available only in 6-digits.

The last full years’ data available on Comtrade is for 2008 and this has been used
to view the trade status on an international and regional basis. So far, for 2009,
Comtrade data is not available from a number of Countries (their percentage of
world trade is given in brackets) which include:- Japan (4.03%), Netherlands
(2.91%), S. Korea (2.44%), Singapore (1.84%), Spain (1.82%), India (1.43%), Poland
(1.00%), KSA (0.93%), Czech Rep. (0.78%), and Others (7.34%). In total, the trade

 
statistical data not received so far by Comtrade represents 24.52% of world
trade. For this reason, 2009 information to date is provided but has not been
used.

World Market Trends – Imports & Exports

To provide a better insight to local producers of glass products, the following table
provides some historic information on world product trends. These can be utilised,
in a general manner, to give some indication of likely future trends for the
concerned products (US$ million), under their respective HS Codes:-
HS CODE Trade 2004 2005 2006 2007 2008 CAGR % 2009*
700719 Import 716.1 867.9 1,124.9 1,270.9 1,466.8 15.4% 894.5
Export 674.3 732.0 852.7 1,109.8 1,379.5 15.4% 1,100.3

700800 Import 670.9 739.2 882.1 1,110.9 1,239.9 13.1% 768.0

Export 706.8 834.8 1,001.1 1,245.9 1,430.4 15.1% 974.4
Source: Comtrade
NOTE: * Partial data available only for 2009

As will be noted, the overall world import/export trends show growth in both of
the glass product sectors, even during the recent/current world economic crisis –
which has affected other industry sectors significantly. This growth could be due
to several factors, including:- (a) continuously growing population, (b) increase in
infrastructure and construction activities, and (c) product substitution (i.e.
switching due to price or quality).

Major International Importing Countries

The identification of the importing/exporting countries for glass products,

selected for this EOP, has been undertaken using the 6-digit UN Comtrade
statistics available for the latest full year, which is 2008. Knowing the main
importing countries can provide (a) an indication of the market size in the
particular target market, and (b) an indication of the existing competition from
other exporting countries (see Section on Competition – Major & Regional
Exporting Countries). The main international importers and source countries for
those imports are identified in the following table by HS Codes:-
MAIN IMPORTING COUNTRIES MAIN EXPORTING COUNTRIES
HS CODE VOLUME
COUNTRY VALUE $ SHARE %
Tonnes
700719 Germany 179,409,000 12.2% 118,132.6 China, Poland, USA, France, Switzerland
USA 96,778,005 6.6% 43,937.6 China, Canada, Colombia, UK, Germany
France 75,797,804 5.2% 34,412.5 Germany, Italy, Turkey, China, Spain
Japan 65,103,731 4.4% 46,678.7 China, Philippines, USA, Malaysia, S. Korea
China 61,535,536 4.2% 27,937.4 USA, Hong Kong, Australia, Taiwan
Others 988,183,541 67.4% Source: Comtrade
TOTAL 1,466,807,617 100% NOTE: On average 1M2 = 10.5kg

 
 MAIN IMPORTING COUNTRIES MAIN EXPORTING COUNTRIES
HS CODE VOLUME
COUNTRY VALUE $ SHARE %
Tonnes
700800 USA 184,479,348 14.9% 58,443.4 China, Mexico, Canada, Germany, Italy
Netherlands 113,199,146 9.1% 35,861.7 Germany, Belgium, Switzerland, Italy, China
Canada 92,457,441 7.5% 29,290.7 USA, China, Austria, Vietnam, Spain
Denmark 90,651,112 7.3% 31,627.6 Germany, Poland, France, Slovakia, Netherlands
Switzerland 81,698,152 6.6% 25,250.8 Germany, Austria, Italy, France, Poland
Others 677,410,240 54.6% Source: Comtrade
TOTAL 1,239,895,439 100%

In the context of the tables, the data from the main importing countries indicates
the size of the import market in each of the target countries together with details
of the main countries supplying the import demand. For the KSA to enter these
markets a concerted effort by local companies to export could enable them, over
time, to enter these overseas markets and establish a market share. This would be
subject to their prices being competitive and their distribution, specifications and
after-sales service/support being able to meet local (wholesale/retail) needs and
requirements. As an example, the after-sales service/support required to deal
with product damages or the return of out-of-date products to
distributors/producers.

However, to export glass products, two major considerations need to be

considered:- (a) to export goods of high quality product which meets the
requirements of its intended markets and (b) to transport the product in a manner
consistent with maintaining its quality and texture over a long period of time. The
key to exporting products overseas is to ensure that appropriate transportation
vehicles and logistical programmes are in place to transport the products to the
export market quickly and without damage.

Major Importing Countries – MENA Regional & GCC

The majority of major importing countries for glass products are outside MENA
(Middle East & North Africa) and the surrounding Region. Hence, to enter these
international markets, the KSA producer will need time and funds to:- (a) identify
local requirements, (b) investigate the market potential properly, then (c) develop
an export marketing plan that could be successfully implemented – based on the
requirements of the target markets, and finally (d) set-up suitable operations and
appropriate logistical support facilities in the selected countries.

While the exporter is developing his medium to long-terms plans to potentially

enter international markets, a short-term development that can be more easily set
up, is to expand into markets in the Arab countries and the surrounding Region as a
whole. Though the markets closer to home are relatively small in relation to other
markets, they nonetheless offer the exporter the potential to develop Regional

 
markets for the KSA’s glass products, although in some markets there could be
competition from local producers as well as other imports. The following tables
uses UN Comtrade data for 2008 (by HS Codes) to identified:- (a) the size of the
import market in several countries in the Middle East/North African (MENA) and
surrounding Regions, and (b) any KSA recorded imports into those markets, as per
the following tables:-

MENA & Surrounding Region - Excluding GCC

IMPORTING IMPORTS HS: 700719 HS: 700800
COUNTRY from Value $ VOLUME Tonnes Value $ VOLUME Tonnes
Algeria World 1,167,141 355.2 1,061,394 382.2

Egypt World 1,477,469 91.7 1,528,595 30.0

Jordan World 346,678 97.8 3,949,321 2,053.8

KSA 16,776 16.2 319,743 152.3
KSA Market Share % 4.8% 16.6% 8.1% 7.5%

Lebanon World 284,436 126.1 2,048,800 1,093.1

KSA 16,678 1.5 26,008 30.1
KSA Market Share % 5.9% 1.2% 1.3% 2.8%

Morocco World 630,057 348.6 440,132 187.1

Sudan World 24,940 31.0 278,607 89.1

KSA 11,059 3.6 5,268 7.0
KSA Market Share % 44.3% 11.6% 1.9% 7.9%

Tunisia World 1,659,895 893.0 385,136 186.8

Turkey World 7,897,613 4,542.6 3,049,242 726.3

Yemen World 38,699 38.4 68,868 40.9

KSA 0 0 1,593 2.3
KSA Market Share % 0% 0% 2.3% 5.6%
Source: Comtrade
NOTE: On average 1M2 = 10.5kg for HS Code 700719.

GCC Countries
IMPORTING IMPORTS HS: 700719 HS: 700800
COUNTRY from Value $ VOLUME Tonnes Value $ VOLUME Tonnes
Bahrain* World 1,929,923 1,168.7 1,104,489 945.3
KSA 1,197,681 775.9 349,660 482.4
KSA Market Share % 62.1% 66.4% 31.7% 51.0%

Kuwait World n/a n/a n/a n/a

Oman World 355,920 31.0 1,134,913 303.9

Qatar World 1,065,466 371.8 17,581,916 8,860.7

KSA 100,704 47.6 563,162 641.7
KSA Market Share % 9.5% 12.8% 3.2% 7.2%

UAE World 5,929,716 2,508.1 13,103,256 6,229.8

KSA 484 0.3 21,870 27.6
KSA Market Share % 0.01% 0.01% 0.17% 0.44%
Source: Comtrade.
NOTE: Where Comtrade data is missing, GOIC data has been used as it is compatible with Comtrade.
On average 1M2 = 10.5kg for HS Code 700719.

 
 Countries in the Middle East, and North African Regions offer potential export
opportunities for the local producers, but the respective market size for the
Countries are, of course, relatively smaller when compared to the major importing
countries. However, this should not deter the local producers from entering
Regional markets as this can:- (a) help to iron out any initial export problems that
the local exporter may experience due to implementation of their export delivery
systems in the nearby market areas, and (b) help the exporters to develop a good,
working export marketing plan that can be tried out in the Regional countries, prior
to being implemented in more distant export locations. Finally, the above indicates
the opportunities that are awaiting KSA exporters in the identified markets,
provided they can supply quality products, on time and at the right price. This will
allow the KSA to develop existing markets and enter new ones.

Competition - Major Exporting Countries

On an international basis, the analysis of the UN Comtrade’s 2008 export

statistics (6-digit) indicate the top countries exporting insulated and tempered
glass products (potential competition) in the world to be as follows:-

MAIN EXPORTING COUNTRIES MAIN IMPORTING COUNTRIES

HS CODE VOLUME
COUNTRY VALUE $ SHARE %
Tonnes
700719 China 324,011,946 23.5% 128,738.0 Germany, Hong Kong, USA, Japan, Italy
Germany 231,460,000 16.8% 79,102.5 France, Spain, Switzerland, Austria, Netherlands
USA 120,476,836 8.7% 47,868.5 Canada, Germany, Mexico, Japan, France
France 94,165,520 6.8% 37,414.3 Germany, Spain, Switzerland, Austria, Netherlands
Italy 82,778,229 6.0% 5,699.4 Slovenia, France, Germany, Spain, Austria
Others 526,610,711 38.2% Source: Comtrade
TOTAL 1,379,503,242 100% NOTE: On average 1M2 = 10.5kg

MAIN EXPORTING COUNTRIES MAIN IMPORTING COUNTRIES

HS CODE VOLUME
COUNTRY VALUE $ SHARE %
Tonnes
700800 Germany 480,968,000 33.6% 169,598.3 Netherlands, Denmark, Switzerland, Poland, Austria
USA 124,622,472 8.7% 38,238.8 Canada, Mexico, Thailand, Singapore, Australia
China 89,211,313 6.2% 51,020.9 UAE, USA, Hong Kong, Macao, Australia
Poland 86,314,288 6.0% 41,619.4 Sweden, Norway, Denmark, Czech Rep., Ireland
Belgium 78,025,177 5.5% 23,784.4 Netherlands, France, Luxembourg, Spain, Germany
Others 571,253,762 39.9% Source: Comtrade
TOTAL 1,430,395,012 100%

As KSA exports develop, they will tend to compete directly with the major
producers of insulated and tempered glass products as well as distributors from a
range of other exporting countries – both near and far. As exporting countries
have usually established their distribution and sales networks in the respective
markets, the local KSA companies should evaluate and understand how these
countries and their respective companies have managed to carve a market for the

 
respective producers and their products. This evaluation should assist the KSA
exporter to identify what actions need to be undertaken to establish export
markets for their own products. For the KSA to compete effectively and
efficiently, a concerted effort by the local companies will need to be undertaken in
a systematic way and possibly an initial start could be made by developing an
effective working export plan.

An initial market size can be estimated from the main importing countries, whose
import statistics provide a rough indication of the market size for imports within
their respective markets. In the same manner, identifying the exporters to those
markets will enable the local KSA producer to identify the countries that will be in
competition with them in their respective export markets.

Estimate of Importer’s Landed Costs

An indication of average landed cost is provided to assist the local producer to

gauge initial exporting costs to a particular country. These costs do not include
any clearance charges, duties/taxes or local distributor mark-ups. It should also
be noted that many producers make a particular product in various quality grades
and this is reflected in their final price for these products. While these
producers may have a ‘base’, ‘medium’ and/or ‘high’ price and/or quality levels, these
price ranges cannot be easily identified from the trade data as the ‘product mix’
varies from country to country and, therefore, all statistical costs are averaged
out within the specific product HS Code. It should also be noted that the
variations in costs are also affected by the cost of the raw materials used for
producing the product. High quality and pure raw materials are obviously more
costly than their cheaper lower quality or synthetic counterparts and, hence, this
is also reflected in the final price of the goods.

The cost indications given in the following table, therefore, reflect only the
average landed costs of all the products covered in the HS Code categories under
evaluation. In relation to the major importing countries and those in the nearby
Regions, an estimate of the average landed costs of selected countries in 2008, for
the World, MENA and GCC imports are indicated on a US$/tonne basis (where
available KSA imports are also detailed) for some representative countries:-

World
TOP 5 WORLD IMPORTING COUNTRIES –
AVERAGE LANDED COST
Importing Country HS 700719 HS 700800
Canada - 3,156.55
China 2,202.62 -
Denmark - 2,866.20
France 2,202.62 -

 
 Germany 1,518.71 -
Japan 1,394.72 -
Netherlands - 3,156.55
Switzerland - 3,235.47
USA 2,202.62 3,156.55
NOTE: On average 1M2 = 10.5kg for HS Code 700719.

MENA Countries
MAJOR IMPORTING COUNTRIES – AVERAGE LANDED COST
Importing Imports: HS 700719 Imports: HS 700800
Country World KSA World KSA
Algeria 3,285.87 - 2,777.06 -
Jordan 3,544.76 1,035.56 1,922.93 -
Lebanon 2,255.64 - 1,874.30 864.05
Morocco 1,807.39 - 2,352.39 -
Sudan - 3,071.94 3,126.90 752.57
Tunisia 1,858.78 - 2,061.76 -
Turkey 1,738.57 - 4,198.32 -
Yemen 1,007.79 - 1,683.81 692.61
NOTE: On average 1M2 = 10.5kg for HS Code 700719.

GCC
5 IMPORTING COUNTRIES – AVERAGE LANDED COST
Importing Imports: HS 700719 Imports: HS 700800
Country World KSA World KSA
Bahrain 1,651.34 1,543.60 1,168.40 724.83
Kuwait n/a n/a n/a n/a
Oman 11,481.29 - 3,734.49 -
Qatar 2,865.70 2,115.63 1,984.26 877.61
UAE 2,364.23 1,613.33 2,103.32 792.39
NOTE: On average 1M2 = 10.5kg for HS Code 700719.

It must be stressed that within the above product ranges there are considerable
cost variations which can be due to the ‘quality grade level’ (high/medium/low) of
the products, the raw materials used in the production, the type of packaging used,
the transport, logistical, distribution costs, the ‘product mix’ being imported, and
the market price acceptable in the target country – which would be based on GDP,
available disposable income and demand. As an example, a third world country is
unlikely to import large amounts of high quality products as the local GDP and
income compels the local populace to purchase lower cost/quality products. The
converse would be true in developed western countries. It is likely for these
reasons that there could be considerable landed cost differential between the
countries.

This information should assist local KSA companies to ascertain, in a very general
manner, whether their respective products are likely to be competitive in the
above identified export markets or not. Landed costs, by sea shipments, are
normally based on CIF value - purely as a general guide, it is estimated that the
variation between FOB and CIF costs could be somewhere in the region of 10% to
15% of FOB.

 
Transportation

All road haulage within the Kingdom is usually undertaken using 20 or 40-foot
trailers. Loads up to 22 tonnes can use the road system without any special
permission, however, loads over this tonnage require a special police licence.

Road transport to surrounding countries is usually undertaken using a 22 tonne

vehicle. In many surrounding countries (Lebanon, Jordan, Syria, Turkey and
Yemen) the Saudi registered cabs pulling the trailers has to be changed at the
border of the target country, to a locally registered cab before the goods-trailer
can be delivered to the purchaser – in Yemen, the cab changeover occurs in the city
of Hodeida. As will be appreciated, transport costs are subject to negotiation
between the exporter and the transporter and, hence, it is not possible to provide
precise data on the subject.

Average sea freight costs (CIF/C&F) are more difficult to estimate but can be
generally assumed to be in the region of 10% - 15% of the FOB price of the
product but this can vary depending upon product type. Delivery charges would
need to be confirmed by the exporter at the time of delivery.

Depending upon the product, airfreight charges can also be variable – being based
on either weight or volume, whichever is greater. Again the delivery charges would
need to be confirmed by the air carrier at the time that the goods are despatched.

Insurance for Goods Being Transported by Road

Essentially, there are two types of insurance cover that is available for land
transportation, namely:-

 Basic Insurance – cover is against loss of or damage to the goods being insured, directly
caused by fire, collision, overturning or derailment of the carrying conveyance.
 Comprehensive Insurance – cover for ‘all risks’ of loss or damage to the goods insured,
subject to certain insurance clauses.

However, the nature of goods being transported play a major role in determining
which type of insurance is required. For instance, no insurance company would
insure on a ‘comprehensive’ basis if the goods are fragile or perishable such as eggs
or vegetable. The fees for both types of insurance cover are based on the value of
shipment. Hence, an exporter is required to submit a number of documents to
determine the insurance fees prior to being issued an insurance policy. These
documents are as follows:-

 
  Cargo insurance proposal form.
 Goods invoice (to determine the value of the goods).
 Way bill.
 Packaging list.

As indicated, insurance fees are determined by three main factors, namely:-

 Value of goods shipment.

 Type of packaging.
 Reputation of carrier/transport company.

Hence, the exporter would secure the minimum insurance fees if he could prove
that the carrier has insured his trucks and the shipment has been packaged
properly. The range of fees for basic insurance is between 0.05% and 0.20% of the
shipment value. In the case of comprehensive insurance, the range of fees is
between 0.10% and 0.50% of the shipment value.

Export/Trade Barriers & Opportunities

There are a number of export/trade barriers and opportunities that are identified
in the following:-

 Company Specific Barriers & Opportunities

 Lack of availability of commercial information or not having undertaken market research
can be considered to be a barrier to entry, as specific country profiles that could
highlight opportunities would not come to light.
 The internal corporate export structure and manpower resources could be an advantage
for companies. In this instance, some KSA companies are developing their export
capabilities but perhaps need to put more emphasis on this development.
 Investment in manpower development for export and good MIS (management information
systems) could pay dividends in the future.
 Many overseas companies will only purchase from those companies that have secured
ISO 9000 certification and in some instances not having this certification could be a
barrier.

 Market Specific Barriers & Opportunities

 Desk research should initially be carried out to determine the market viability for entry
– this can be undertaken through written data relating to the target country (e.g.
reports) and also via the internet.
 Having a good and reputable local agents/distributors can be a benefit as:-
o The exchange of information between the two parties minimises the information
barriers and allows the exporter to have a better understanding of his target
export markets.
o Enables the exporter to have a physical representative in the target market,
through someone who is responsible for local distribution and sales.
 Conversely for the exporter, not knowing what is happening in the selected target export
markets becomes a barrier.

 
  Selecting an inactive and/or poor agent/distributor could bar the exporter from
marketing their good properly and professionally in the target market and, thus, this
could be a barrier.
 Customs duties/tariffs can be a barrier for exporters - importing countries in many
instances use this mechanism as a means of protecting their local industry. However, it
is be a positive aspect for the KSA producers exporting to neighbouring GCC countries.
 Trade agreements between two countries can sometimes either reduce duties/tariffs or
exempt them. This means that in some instances a number of countries may have a
preferential tariff advantage over other countries.
 The Arab Free Trade Market Agreement has brought down tariff barriers for KSA
exporters within the Arab countries.
 The KSA’s accession into the WTO has enabled local producers to more actively compete
in export markets as the trade barriers have come down. However, conversely the trade
barriers in the Kingdom are also reducing and, thus, bringing in overseas competition.

Distributors & Competitors in the Potential & Regional Export Markets

In the international market, it can be quite difficult for local exporter to easily
identify:- (a) their potential local competition and (b) possible local
importers/agents/distributors that they can work within the targeted markets.
Any exporter wishing to develop overseas markets will need to undertake initial
primary and secondary market research to identify the relevant information that
needs to be sought from that market. The short list below, identifies producers,
importers/agents and distributors for glass products, is an example of the
information needed to identify potential in-country competitors in the target
market and to contact overseas importers/distributors/agents who are dealing
with the exporters products in the selected target markets. This and further
information can be obtained via the website www.kompass.com.

COUNTRY STATUS COMPANY PRODUCT SECTOR CONTACT DETAILS

GLASS TIME, 3, rue Aissat Idir, 16002 Chéraga, Algeria
Algeria Producer Glass, laminated, safety
Sarl Tel: +213 20 35 39 74, Fax: +213 771 32 88 02
ABM SAFETY Glass, tempered, toughened, 5 ème Km, 18000 Jijel, Algeria
GLASS, Sarl safety, flat, plate Tel: +213 34 47 47 42
A W G Northern Glass, sheet, flat, laminated, 3424 Highway 16, Smithers, BC V0J 2N0, Canada
Canada Producer
Industries Inc tempered, toughened Tel: +1 250 847-9211, Fax: +1 250 847-5169
Beixiaohongmenqiao, Jiugongzhen, Nanjiao, Beijing,
Beijing Tehua
China Producer Glass, tempered, toughened Beijing 100000, China
Glass Co. Ltd.
Tel: +86 10 87969272, Fax: +86 10 87969271
Qingdao Yu Rong 21/FL, No.18 BaoDing Road, Shandong Qingdao,
Glass, sheet, flat, laminated,
Glass Company Shandong 266000, China
tempered, toughened
Limited Tel: +86 532 82843509, Fax: +86 532 82843266
3rd Ind. Zone, B6, 10th of Ramadan,Sharkeya,
Egyptian Glass Glass, flat, tempered,
Egypt Producer Sharkeya, Egypt
Technology toughened,
Tel: +20 15 411603, Fax: +20 15 410020
Venice Tower, El-Sharkawia El-Bahareya, beside
Egyptian Yassin Glass Factory, Shubra El-Kheima, Kaliubeya,
Glass, sheet, flat, safety
Industry Glass Kaliubeya, Egypt
Tel: +20 2 44458902, Fax: +20 2 44458902

 
 Bauglasindustrie Hüttenstraße 33, 66839 Schmelz, Germany
Germany Producer Glass, laminated, safety
GmbH Tel: +49 6887 3030, Fax: +49 6887 30345
No.10,3rd floor,2nd Bldg, Corner of First St.,
Carglass Ind. & Glass, sheet, laminated,
Iran Producer Northern Kargar Ave., 14136 Tehran, Iran
Mfg. Factories tempered, toughened, safety
Tel: +98 21 88002071, Fax: +98 21 88000215
No.34,Shahid Sarafraz St., Ostad Motahari Ave.
Producer, Ghazvin Glass Glass, sheet, flat, laminated,
15876 Tehran, Iran
Distributor Co.(P.L.C) tempered, toughened, safety
Tel: +98 21 88730832-6, Fax: +98 21 88735762
Glassline Building, Off Old Saida Road, Kobbeh
Glassline Glass, sheet, laminated,
Lebanon Producer Area, Choueifate (Aley), Lebanon
Industries Sal tempered, toughened
Tel: +961 5 432045, Fax: +961 5 432044
Horizontal Company's Building, Mar Elias Street, Jisr El-Bacha
Producer, Glass, plate, flat, laminated,
Tempering Glass Area, Mkalles (Metn), Lebanon
Distributor tempered, toughened
Sarl Tel: +961 1 683074, Fax: +961 1 683075
Société 71, bd Haj Ahmed Mekouar -ex C.Caillat, 20250
Glass, sheet, flat, laminated,
Morocco Producer Marocaine du Casablanca, Morocco
safety
Verre (Somaver) Tel: +212 5 22 35 05 66, Fax: +212 5 22 35 28 62
Allée des Mimosas (Aïn Sebâa), Lot. 08, 20250
Distributor Flashglass Glass, laminated, safety Casablanca, Morocco
Tel: +212 5 22 67 45 01, Fax: +212 5 22 67 45 02
Contour Glass, temperedtoughened, Hoofdstraat 143, 5121 JD Rijen, Netherlands
Netherlands Producer
Glasbuigerij safety, flat Tel: +31 161 220278, Fax: +31 161 222905
Krug Portegies Zijtocht 1, 1507 CD Zaandam, Netherlands
Distributor Glass, sheet, laminated, flat
BV Tel: +31 30 2624814, Fax: +31 30 2614326
Cemal Sahir Sok. 26 / 28 K.2, Mecidiyeköy, 34394
Orim Sanayi ve
Turkey Producer Glass, tempered, toughened Ýstanbul, Turkey
Ticaret A.ª.
Tel: +90 216 345 4101, Fax: +90 216 345 0134
Met Cam Ýthalat Baðdat Cad. No:78/9 Kýzýltoprak, 34726 Ýstanbul,
Distributor Ýhracat ve Flat glass-various Turkey
Mühendislik Tel: +90 216 345 4101, Fax: +90 216 345 0134
Al Abbar PO Box 1626 Dubai, Al Abbar Bldg., Ras Al Khor,
UAE Producer Tempering Plant Glass, tempered, toughened Indl. Area, Dubai , UAE
LLC Tel: +971 4 3331362, Fax: +971 4 3331283
Al Rawaa Glass & PO Box 23336 Sharjah, Industrial Area No.10,
Distributor Mirror Factory Glass, sheet, flat, laminated Sharjah, UAE
LLC Tel: +971 6 5342025, Fax: +971 6 5342023
Source: Kompass

Tariffs/Duties & Taxes

Tariffs for insulated and tempered glass products vary considerably from country
to country. Details of the specific tariff/duty rates, which would be payable by
KSA exporters in several sample countries, for the HS Codes under review, are
outlined in the following table:-

COUNTRY HS CODE 700719* HS CODE 700800*

Algeria**
Egypt**
Jordan**
Lebanon** 0% 0%
Morocco**
Tunisia**
Sudan** 12% 12%
Yemen** 1% 1%

Canada 0% 0%
China 14% 14%

 
 Denmark
France
Germany 3% 3%
Netherlands
Turkey
Japan 3.5% 0%
Switzerland 2.39% - 5.54% 2.11%
S. Africa 15% 15%
USA 5% 3.9%
Source: ITC – Market Access Map.
NOTE: * Where a tariff range is provided, it indicates that the
tariff varies based on 8-digit, or more, HS Codes.
** Preferential tariff for the League of Arab States.

Apart from the KSA exporter paying the relevant tariff/duty charges at the
border of the importing country, additional taxes are also imposed on top of the
tariff/duty rates. These general tax terms for imports are detailed, in the
following table, for the relevant HS Codes under review for several sample
countries who are importers of the concerned products from the KSA:-

GENERAL TAX TERMS for ALL IMPORTS

COUNTRY
(In Additional to the Nominal Tariff/Duty Rates Detailed Above)
Consumption tax of 2%-3% (varies according to province) applied on CIF. Also there is a VAT of 17% for
China most items. Necessities, such as agricultural products and utilities, are taxed at 13%. VAT is applied on
CIF + duty.
Sales Tax: 10% of adjusted value determined by Egyptian Customs. Customs Surcharge: 2% of the value
Egypt
of the consignment if the rate of duty applicable to the product is between 5% to 30%.
EU tariff rates are based on CIF + duty. Value Added Tax (VAT) is based on CIF + Duty. ‘Standard VAT
applies for most products and Exceptions are noted in ‘Reduced VAT’ rates for some of the major EU
Countries are:-

COUNTRY STANDARD VAT% REDUCED VAT%

Austria 20% 10%-14%
Belgium 21% 1%-12%
Denmark 25% 0%
Finland 22% 8%-17%
European Union France 19.6% 2.1%-5.5%
(EU) Germany 19% 7%
Greece 18% 4%-8%
Ireland 21% 4.2%-12.5%
Italy 20% 4%-10%
Luxembourg 15% 3%-12%
Netherlands 19% 0%-6%
Portugal 19% 5%-12%
Spain 16% 4%-7%
Sweden 25% 6%-12%
United Kingdom 17.5% 0 – 5%
Japan There is a 5% consumption tax applied on CIF + duty.
Jordan There is a VAT tax of 13% applied on CIF + duty.
Lebanon There is a 10% VAT tax on CIF + duty.
Morocco There is a VAT that varies between 0% and 20% depending on the product, applied on CIF + duty.
S. Africa There is a VAT of 14% applied on FOB + duty value.
Sudan n/a
Value Added Tax (VAT): 18% of duty paid value + the sum of the tax. Customs Service Fee: 3% of
Tunisia
customs value + VAT payable.
For most goods there is an 18% VAT. For basic necessities and foodstuffs the rate is 8%. For electronics
Turkey
and some luxury items the rate is 26%. Tax is applied on CIF + duty.
USA n/a
Yemen n/a

 
The Arab Free Trade Zone came into effect on January 1, 2005, marking the
elimination of Customs Duty on intra-Arab trade. However, individual states still
have a ‘negative list’ of trade items which will not qualify for exemption from
Customs Duty. The Arab Free Trade Zone comprises of the following member
states:- Algeria, Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Morocco,
Oman, the Palestine Authority, Qatar, the KSA, Somalia, Sudan, Syria, Tunisia, the
UAE, and Yemen. Imports from non-member countries will continue to be subject
to Customs Duty based on the individual country's legislations.

On January 1, 2003, the Gulf Co-operation Council (GCC) countries (i.e. the KSA,
Kuwait, Oman, Bahrain, Qatar and the UAE) formed a Customs Union removing the
barriers to free trade between member states. A flat rate of duty of 5% is now
imposed on most imported goods apart from listed exemptions at the first point of
entry into the GCC. Those goods may then move freely between GCC countries
without the imposition of any further duty.

There is no Excise Duty or Sales Tax in any of the GCC countries. The formation of
the GCC Customs Union, the Arab Free Trade Zone and various international
commitments - including those under the WTO agreement - all point to a probable
reduction in Customs Duty as a source of revenue for the Governments. There has
been debate, at the GCC level, regarding the possible introduction of another form
of indirect taxation, such as Value-Added Tax (VAT). The GCC Finance & Economic
Co-operation Committee has suggested a comprehensive study is undertaken by the
Member States to consider this further. While Governments in the GCC have
started exploring new indirect taxes, however, there has been no formal decision
on any specific form of tax or the timeline for introducing any such taxes. (Source:
internationaltaxreview.com – Feb, 2005).

Finally, it should be stressed that governments can change duty/tariff rates

whenever they consider it appropriate. Hence, the KSA exporter is encouraged to
check the duty/tariff applicable in his target country at the time of exporting.

KSA Competitive Advantage/Disadvantage

The main criteria can be summarised into the following points:-

 Accession to the WTO has enabled a level playing field in the KSA’s export markets of
member countries in terms of tariffs, duties, etc.
 Tariff/duty benefits with those countries which have existing trade agreements with the
KSA and/or the GCC.
 The proximity of the KSA within its Regional markets.
 Increase in Regional population creating demand for increased dwellings, construction,
infrastructure requirements, transportation and food products.

 
Some of the potential disadvantages/barriers are listed in the following:-

 Cost of transportation and goods insurance cover to destination country.

 The need sometimes to change the transport truck cabs at the border or at designated city.
 Customs procedures at borders can cause delays and incur additional costs.
 Delays in the delivery of products, which is caused by infrequent ship movements from KSA
ports and sometimes the need to tranship through third countries.

Conclusions

In conclusion, at the end of 2009, the KSA had an estimated surplus capacity of
1,527,667 tonnes of insulated and tempered glass products. This equates to a
conservative and nominal export potential of around US$1.5 billion (SR5.6 billion)
for the mentioned types of glass products. The aim of this report is to identify
major importing countries for the identified glass products, which could represent
an export opportunity for Saudi producers. The following are the main highlights
of the report:-

 World Imports of the Concerned HS Codes (2008)

o The major international importing countries for the range of specified glass
products were:-
 HS Code 700719 – Germany, USA, France, Japan and China.
 HS Code 700800 – USA, Netherlands, Canada, Denmark and
Switzerland.
o In the MENA and surrounding region (excluding the GCC), the following
countries imported the specified glass products:- Algeria, Egypt, Jordan,
Lebanon, Morocco, Sudan, Tunisia, Turkey and Yemen.
o In the GCC (excluding KSA), Bahrain, Oman, Qatar and UAE are known to have
imported both the mentioned HS Codes. However, no data is available on Kuwait
to ascertain their import demand.
o The total value (US$ million) of world imports (2008) of the specified glass
products are detailed in the following table, by HS Codes:-

HS Code: 700719 HS Code: 700800 TOTAL

1,466,807,617 1,239,895,439 2,706,703,056

 World Exports of the Concerned HS Codes (2008)

o The major international exporting countries for the range of specified glass
products were:-
 HS Code 700719 – China, Germany, USA, France and Italy.
 HS Code 700800 – Germany, USA, China, Poland and Belgium.
o The total value (US$ million) of world exports (2008) of the specified glass
products are detailed in the following table, by HS Codes:-

HS Code: 700719 HS Code: 700800 TOTAL

1,379,503,242 1,430,395,012 2,809,898,254

 
 o The KSA exporter should further investigate these countries to ascertain how
they have developed their export markets and what are their techno-commercial
and financial parameters for exporting.

 Arabian & Other Regional Countries

o Although the surrounding market is relatively small, exporters should start to
develop their export markets in the nearby countries.
o More effort needs to be undertaken by the local exporters to enable the KSA
to become a major exporting Country to the surrounding Arab and non-Arab
Countries in the Middle East, and North Africa.

In summary, while some exporting is being undertaken, more effort could be

directed towards developing further export markets. It is believed that these
markets offer promise to local producers and KSA companies are encouraged to
undertake evaluation of these markets to assess their specific exporting potential.

Furthermore, the KSA producers are encouraged to contact local export insurance
and credit institutions in order to utilise the available facilities for export credit
and the available insurance programme cover for higher risk countries.
Additionally, the Saudi Export Program (SEP), operated by the Saudi Fund for
Development (SFD) in Riyadh, is in a position to assist potential KSA exporters to
expand their export activities and assist them to increase their sales volumes, by
exporting to more countries, while also trying to help them to minimise their
export risks.

_________________________________________