Table of ContentsIntroduction.................................................................................................................................................3

Companies of the Group..........................................................................................................................3

Vision of Ghani Group.................................................................................................................................4

Products......................................................................................................................................................5

Ghani float glass..................................................................................................................................5

Size And Thicknesses...........................................................................................................................5

Ghani Green.........................................................................................................................................5

Ghani Brown........................................................................................................................................6

Standards.............................................................................................................................................6

Glass Container........................................................................................................................................6

Float Glass Production Process....................................................................................................................8

Introduction.............................................................................................................................................8

Production Process..................................................................................................................................8

The basic science:................................................................................................................................8

Raw Materials:.....................................................................................................................................9

Process Details:......................................................................................................................................10

Low-e coatings...................................................................................................................................11

Sputtering..........................................................................................................................................11

Pyrolytic Deposition...........................................................................................................................12

Float Glass - Manufacturing process..........................................................................................................13

1. Raw material feed..............................................................................................................................13

2. Furnace..............................................................................................................................................13

3. Float bath...........................................................................................................................................13

4. Annealing lehr....................................................................................................................................14

5. Cutting...............................................................................................................................................14

6. Stacking and offloading......................................................................................................................14

7. Distribution........................................................................................................................................14

The Production Process of Glass Containers..............................................................................................15

Glass Melting.........................................................................................................................................15

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Gob Distribution....................................................................................................................................15

Container Forming.................................................................................................................................15

Annealing Lehr.......................................................................................................................................15

Cold End Coating...................................................................................................................................15

Cold End Inspection...............................................................................................................................16

Bottle Filling...........................................................................................................................................16

Packaging...............................................................................................................................................16

Palleting & Wrapping.............................................................................................................................16

Warehousing.........................................................................................................................................17

Product Cost..............................................................................................................................................18

Cost of sales...........................................................................................................................................18

Period Costs...............................................................................................................................................19

Administrative and other expenses:......................................................................................................19

Selling and Distribution expenses:.........................................................................................................20

Other costs:...........................................................................................................................................21

Activity Based Accounting.........................................................................................................................22

Methodology.........................................................................................................................................22

Uses.......................................................................................................................................................23

Limitations............................................................................................................................................23

Activity Based Accounting in Ghani Glass..................................................................................................24

Share of Each Product in total Production:............................................................................................24

Cost Pools..............................................................................................................................................25

Recommendations:....................................................................................................................................26

References:................................................................................................................................................27

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Introduction

Ghani Group is a Lahore based Group. The founder of Ghani Group (Late) the Sheikh Abdul

Ghani started business carrier of the Group in 1963 and established a coal/ silica sand mining

firm in the name of Ahmad Brothers and Company. Alhamdulillah now the group is running a

diverse range of businesses including three glass plants, an automobile plant,  number of leading

mining companies, and trading houses and has an annual turnover of over Rs 8 Billion.

The origins of this group can be found in the mining industry given its involvement in coal, salt

and sand mining since 1959. The substantial strategic benefits of vertical integration led them to

consider venturing into the manufacturing field in subsequent years. The chosen manufacturing

field was glass manufacturing due to the robust demand for glass products in the country.

The Ghani Group was not new to the glass manufacturing industry. They had been supplying

silica sand to the glass industries four decades back. Their dedication to quality and customer

service allowed them to land an exclusive 25 year excellence certificate from Phillips.

Their venture into the manufacturing field took the form of Ghani Glass, incorporated in 1992

and starting production in 1995, forming the first step on the road to success of Ghani Glass

limited, which today own three glass plants namely GGL1 – Hattar, GGL2 – Landhi and GGL3 –

Sheikhupura Road.

Companies of the Group

The diversified businesses operating under the umbrella of Ghani Group are as follows:

Ghani Glass Limited, Hattar (GGL-I)

Ghani Glass Limited, Karachi (GGL-II)

Ghani Glass Limited, Sheikhupura (Float Glass Plant)

Ghani Automobiles Limited (formerly Ghani Textile Ltd.)

Makerwall Collieries Limited

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Ghani Mines (Pvt.) Limited>

Ghani Chromites Mines Pvt. Limited

Ghani International

Ghani Corporation

Ahmed Ghani Joint Venture

Al-Muhandus Corp.

Ahmed Brothers and Co.

Vision of Ghani Group

To indulge in honesty, integrity and self determination, to encourage excellence in performance

and most of all to put our trust in Allah, so that we, eventually through our efforts and belief,

become the leader amongst glass manufacturers not only in Pakistan, also in Asia.

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Products

Ghani float glass

Ghani Float has taken the lead to establish Pakistan’s first state of the art Syno European

Technology based float glass plant. The plant called GGL III, is located at 29 kms Lahore –

Sheikhupura Road with a covered of 400,000 square feet on 25 acres (approx. 1.1 Million square

feet) of land.

The plant features an automatic and virtually intelligent Digital Control System (DCS) facility

that ensures error free production of extremely high quality grade.

A full fledged Nitrogen processing plant, based at the plant, has the capacity to produce ample

Nitrogen gas, used during tin bath of the float glass to make it oxide free, so as to facilitate

bubble/distortion free production of float glass.

The spectacular float line thus receives 100% crystal clear, bubbles and distortion free glass

ready after being cut into required sizes and to be taken to the ware house.

With an extremely advanced and sophisticated technology, Ghani Float’s plant is capable of

producing 350 tons of float glass per day.

The plant has its own power generation plant and focuses on concern for environment.

Therefore, it has all the relevant certifications of ISO and other operative standards.

Size And Thicknesses

Ghani Float available in more than 180 sizes in thickness of 2mm to 12 mm throughout the

country. 

Ghani Green 

Ghani Green, the first ever green float glass of Pakistan, made in Pakistan, had been launched by

Ghani Float. This green float glass is available in all thicknesses from 2 mm to 12 mm. Ghani

Float did a tremendous effort from of going into color float glass successfully within just one

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year of its operations. Ghani Green has saved a lot of foreign exchange for the country, as the

imports of green float glass from outside of Pakistan almost stopped.   

Ghani Brown   

At Ghani Glass Limited, innovation is our stance and R& D is our tradition. Keeping in line with

this vision, Ghani Float has released the second color in its float glass range. This is a break

through not only in the Pakistan's history but also worldwide that a float glass manufacture has

given two colors to the market within two years time of its inception. The brand name for the

brown float glass is Ghani Brown, which is also available throughout Pakistan in full range of

sizes and thicknesses from 2mm to 12mm.   

Standards 

Ghani Float follows all the professional ASTM Standards (American Society for Testing and

Measurements Standards). At each and every step, it is ensured that no compromise is done in

strictly following all the laid down standards. This is the reason why Ghani Float has been able

to give consistent quality to the market.  

Light transmittal value = 84% of L.T.V.

Distortion’s value against Zebra Board = 55 degree

Float’s value for mirror quality = 50 degree

Finishing = Smooth (as per standards)

Edging = Proper (as per standards)

Glass Container

Container glass is a type of glass for the production of glass containers, such as bottles, jars,

drinkware, and bowls. Container glass stands in contrast to flat glass (used for windows, glass

doors, transparent walls, windshields) and fiberglass (used for thermal insulation and optical

communication). Most container glass is soda-lime glass, produced by blowing and pressing

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techniques, while some laboratory glassware is made from borosilicate glass. Container glasses

include the following:

Glass bottles :

Jars

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Float Glass Production Process

Introduction Float glass is produced by floating a continuous stream of molten glass onto a bath of molten tin.

The molten glass spreads onto the surface of the metal and produces a high quality, consistently

level sheet of glass that is later heat polished. The glass has no wave or distortion and is now the

standard method for glass production and over 90% of the world production of flat glass is float

glass.

Production Process

The basic science:

If molten glass is poured onto a bath of clean molten tin, the glass will spread out in the same

way that oil will spread out if poured onto a bath of water. In this situation, gravity and surface

tension will result in the top and bottom surfaces of the glass becoming approximately flat and

parallel.

The molten glass does not spread out indefinitely over the surface of the molten tin. Despite the

influence of gravity, it is restrained by surface tension effects between the glass and the tin. The

resulting equilibrium between the gravity and the surface tensions defines the equilibrium

thickness of the molten glass (T). The resulting pool of molten glass has the shape as the given

picture.

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The equilibrium thickness (T) is given by the relation: Sand Soda Ash Limestone Dolomite

Alumina Others Sand Soda Ash Limestone Dolomite Alumina Others

Raw Materials:

Raw material PercentageSand 72.6

Soda Ash 13.0Limestone 8.4Dolomite 4.0Alumina 1.0Other 1.0

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Process Details:

The batch of raw materials is automatically weighed and mixed and then continuously added to

the melting furnace where it is taken to around 1050oC using gas fired burners. The mix then

flows over a ‘dam’ where the continuous stream of molten glass flows onto the bath of molten

tin. The stream of glass is pulled along the top of the molten tin by haul-off conveyors t the end

of the float area which transport the glass into the annealing lehr.

At the start of the float area the molten glass spreads outwards with flat top and bottom surfaces

and he thickness decreases towards the equilibrium thickness (T).

The thickness can then be further controlled by the stretching effect of the conveyors as it cools

until it reaches 600oC when it exits the float area and enters the annealing lehr. Whilst the

equilibrium thickness is approximately 7 mm the process has been developed to allow the

thickness to be ontrolled between 0.4 mm and 25 mm.

For thin sheets, the exit conveyor speed can be increased to draw the glass down to thinner

thicknesses. This drawing will also result in a decrease in the sheet width and to prevent

unacceptable sheet width decreases edge rolls are used. Edge rolls grip the outer top edge of the

glass and not only reduce decrease in width but also help to reduce the thickness even further.

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For thick sheets, the spread of the molten glass is limited by using non-wetted longitudinal

guides. The glass temperature allows the spread to remain uniform and is reduced until the

ribbon can leave the guides without changing dimensions

Low-e coatings

Much of the architectural glass produced is now coated with low-e (for low emissivity) coatings

to enable the production of more energy efficient windows. As with any advanced technology,

there are several different production methods and the products have different properties.

The two basic methods of producing low-e coatings are sputtering and pyrolytic deposition:

Sputtering - Soft coat and off-line coating: Sputtering uses a vacuum chamber to put several

layers of coating on the basic glass and the total thickness of the coatings is around ten thousand

times thinner than a human hair. Sputtered coatings are referred to as 'soft coats' and must be

protected from humidity and contact. The sputtered coatings are very soft but inside a sealed

unit, they will easily last for the life of the unit.

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These sputtered 'soft coat' products can have emissivities ranging from 0.05 to 0.1 compared to

uncoated glass that has a typical emissivity of 0.89. This means that 'soft coat' products will

reflect between 95 and 90% of the long-wavelength radiant energy from the surface where

uncoated glass will only reflect 11% of the radiant energy received by the surface.

Pyrolytic Deposition - Hard coat and on-line coating: Pyrolytic coating deposits a metallic

oxide directly onto the glass surface whilst it is still hot. The low-e coating is effectively 'baked-

on' to the surface and the resulting low-e coating is very hard and durable.

The pyrolytic coatings are often referred to as 'hard coats'. Pyrolytic coatings can be up to 20

times thicker than sputtered coatings (they are still 500 times thinner than a human hair) and the

baking process makes them much harder and resistant to wear.

Pyrolytic 'hard coats' have a low emissivity but this is higher than those achieved for soft coats.

Hard coat products have emissivities ranging from 0.15 to 0.2.

The ability to apply 'hard coats' whilst the glass is still hot means that hard coated products are

cheaper than soft coated products.

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Float Glass - Manufacturing process The float glass manufacturing process was developed by Pilkington in 1959, taking flat glass

technology to a revolutionary new level.

The glass gains its lustrous finish and perfect flatness by floating on a bath of molten tin in a

chemically controlled atmosphere. The ribbon of glass is then cooled, while still moving, until

the surfaces are hard enough for it to be taken out of the bath without the roller marking the

surface. The glass is then automatically cut and stacked, ready to be packed for distribution to

local and international customers.

The Float Line:

1. Raw material feed Sand, soda ash, dolomite, limestone and a proportionate amount of cullet are combined to form a

batch. Strict quality controls and monitoring of temperatures throughout the process maintain

PFG’s high quality standards.

2. Furnace

Batch materials are fed into the furnace. Full melting is achieved at around 1 600°C.

3. Float bath

A continuous ribbon of molten glass floats along the surface of molten tin. Irregularities are

melted out, ensuring flat, parallel surfaces in the glass.

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4. Annealing lehr

The glass is annealed and gradually cooled to 200°C, to relieve stresses and prevent splitting and

breaking in the cutting phase.

5. Cutting

The glass ribbon is cut automatically as it moves along the rollers.

6. Stacking and offloading

A series of automatic stackers offload the glass. The glass is then warehoused for distribution,

using overhead cranes and mobile lifting vehicles.

7. Distribution

Glass is distributed by road or rail throughout Pakistan, and exported into regional and overseas

markets.

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The Production Process of Glass Containers

Glass Melting

The furnace melts cullet (crushed, recycled glass), sand, soda ash, limestone, and other

raw materials together. Molten glass usually ranges in temperature between 2,300 and

2,800° F. Furnace Control systems monitors and controls firing temperature.

Gob Distribution

At the end of the furnace, the glass stream is distributed to different forehearths for the

respective production line. Molten glass is conditioned in the forehearth and its

temperature gradient is equalised to ensure uniform temperature homogeneity. Plungers

intercept the stream of molten glass from the forehearth and cuts gobs individually by

mechanical shears. The gob distributor then routes the gobs into blank moulds at the I.S

Machine.

Container Forming

Gobs of glass are delivered to blank moulds to form a parison. The ring finish and

internal bore are created. It is then transferred to ‘mould’ side, where compressed

air and vacuum are applied, stretching & cooling the parison to exact inner cavity profile

of the mould, forming the final shape of the container.

Annealing LehrThe glass containers are then submitted through a special type of oven called a Lehr

designed specifically for annealing glass. Glass is heated to the annealing point and then

slowly cooled to room temperature. This process relieves the internal stresses, making the

glass much more durable.

Cold End Coating

After annealing, a layer of polyethylene wax, is applied via a water based emulsion. This

makes the glass slippery, protecting it from scratching and stopping containers from

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sticking together when they are moved on a conveyor. The resultant invisible combined

coating gives a virtually unscratchable surface to the glass.

Cold End Inspection

All containers are monitored regularly throughout the production process and the end

product is subject to exhaustive computer, laser, electronic, mechanical and manual

checks to ensure it passes the most stringent health and safety standard requirements.

Typical faults flagged up in this process include small cracks in the glass called checks,

foreign inclusions called stones, bubbles in the glass, called blisters and thin glass.

Rejected containers are recycled back into the furnace.

Bottle Filling

A completely hygienic process throughout all the pipe works and valves are stainless

steel the only flexi hoses on the site are between tanker and intake bay. Product can be

processed at sales gravity or high gravity product then diluted and carbonated. Flavoured

Alcoholic Beverages and soft drinks can be made from concentrate or from a recipe.

Packaging

Depending on Customer requirements the final product can be packed in a multitude of

ways. Cases ranging from 4 to 30 bottles, neck though packs and tray and shrink

wrapping are all options that are available.

Palleting & Wrapping

Glass containers are staked automatically on pallets and separated by cardboard into rows

before going undergoing the shrink wrapping process. This involves a hood type film

being placed over the pallet before being heated until the pallet contents are in a compact

unit ensuring minimal movement of the product in transit.

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Warehousing

The Pallets of Container Glass move along a railing system into the automated

warehouse. All individually racked, packaging integrity is maintained. All pallets remain

in storage until distribution to the customer or directed to the inhouse filling lines.

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Product Cost

The product cost is the cost of all the different components which make up the product. This may

either be the purchase price if the components are bought from outside suppliers, or the

combined cost of materials and manufacturing processes if the component is made in-house.

The designer has a major role deciding the product cost because they specify materials, processes

and bought-out parts. It is a designer’s responsibility to consider the cost of their design and

minimise them where possible.

There are four main costs constituting the ‘product’ cost.

Material costs

Manufacturing costs

Component costs

Storage costs

Cost of sales

Direct Material

Raw Material consumed 1,477,661,474

Fuel, gas & Electricity 1,176,487,090

Packing material consumed 277,126,675

Stores and spares consumed 152,028,854

Sub Total 3,083,304,093

Direct Labor

Salaries, allowances and other benefits 410,894,302

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Sub total 410,894,302

Manufacturing overhead

Depreciation 212,556,323

Rent, rates and taxes 5,726,003

Repair and maintenance 4,844,143

Travelling and motor running 13,621,837

Communication & Stationery 3,971,405

Other manufacturing expenses 17,236,982

Sub Total 257,956,693

Total 3,752,155,088

Period Costs

Period costs are not a necessary part of the manufacturing process. As a result, period costs

cannot be assigned to the products or to the cost of inventory. The period costs are usually

associated with the selling function of the business or its general administration. The period costs

are reported as expenses in the accounting period in which they 1) best match with revenues, 2)

when they expire, or 3) in the current accounting period. In addition to the selling and general

administrative expenses, most interest expense is a period expense.

Administrative and other expenses:

Salaries, allowance and other benefits 73,160,537

Communication, stationery and supplies 10,233,016

Utilities 1,361,533

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Rent, rates & taxes 3,798,000

Travelling & Conveyance 18,963,010

Auditors’ remuneration 945,000

Depreciation 15,570,291

Legal & Professional Expenses 5,916,661

Charity & Donation 7,231,200

Other expenses 14,738,050

Total 151,917,298

Selling and Distribution expenses:

Salaries, allowance and other benefits 44,555,181

Communication, stationery and supplies 4,732,739

Utilities 406,429

Rent, rates & taxes 1,082,450

Travelling & Conveyance 5,958,114

Advertisement & sales promotion 37,400,532

Depreciation 1,862,915

Provision for bad debts 5,976,357

Transportation & Handling 131,056,641

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Other expenses 1,366,861

total 234,398,219

Other costs:The costs which are neither product nor period cost are as follow:

1. Other operating expenses

Worker’s Profit Participation fund

Workers’ welfare fund

Loss on sale of investment

Taxation

Finance Costs

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Activity Based Accounting

Activity-based costing (ABC) is a costing model that identifies activities in an organization and

assigns the cost of each activity resource to all products and services according to the actual

consumption by each: it assigns more indirect costs (overhead) into direct costs.

In this way an organization can precisely estimate the cost of its individual products and services

for the purposes of identifying and eliminating those which are unprofitable and lowering the

prices of those which are overpriced.

In a business organization, the ABC methodology assigns an organization's resource costs

through activities to the products and services provided to its customers. It is generally used as a

tool for understanding product and customer cost and profitability. As such, ABC has

predominantly been used to support strategic decisions such as pricing, outsourcing and

identification and measurement of process improvement initiatives.

Methodology

Cost allocation

Fixed cost

Variable cost

Cost driver

Cost driver rate

Direct labor and materials are relatively easy to trace directly to products, but it is more difficult

to directly allocate indirect costs to products. Where products use common resources differently,

some sort of weighting is needed in the cost allocation process. The measure of the use of a

shared activity by each of the products is known as the cost driver. For example, the cost of the

activity of bank tellers can be ascribed to each product by measuring how long each product's

transactions takes at the counter and then by measuring the number of each type of transaction.

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Uses

It helps to identify inefficient products, departments and activities

It helps to allocate more resources on profitable products, departments and activities

It helps to control the costs at an individual level and on a departmental level

It helps to find unnecessary costs

It helps fixing price of product or service scientifically

Limitations

Even in activity-based costing, some overhead costs are difficult to assign to products and

customers, such as the chief executive's salary. These costs are termed 'business sustaining' and

are not assigned to products and customers because there is no meaningful method. This lump of

unallocated overhead costs must nevertheless be met by contributions from each of the products,

but it is not as large as the overhead costs before ABC is employed.

Although some may argue that costs untraceable to activities should be "arbitrarily allocated" to

products, it is important to realize that the only purpose of ABC is to provide information to

management. Therefore, there is no reason to assign any cost in an arbitrary manner.

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Activity Based Accounting in Ghani GlassThe ABC can be applied in the Ghani Glass as per the activities mentioned in the process of the

manufacturing of the Float glass and container glass.

Share of Each Product in total Production:

Products (Tons

of production)

2009 % of total production

Glass

Container

Production

1.6 billion glass

container

35%

Float Glass

Production 300,000 tpa sheets 65%

The above table shows the share of each type of product in the total production volume for the

company for the year 2009. Now In accordance to the share of each product in the production

volume of the company, raw materials cost, Labor cost and MOH will be allocated to each

product.

Components Total Costs (2009)

Raw Material 257,956,693

Direct Labor 410,894,302

MOH 3,083,304,093

Administrative Costs 151,917,29

Distributive Costs 234,398,219

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Cost Pools

Cost pools Cost Driver Rationale

Pool 1:Raw material: Cost of Sand, Soda Ash, Limestone, Dolomite and Alumina

Units consumed This pool is created because the initial cost is of the raw material used to produce the glass

Pool 2: Fuels and power,

Machine Hours The major cost is also fuel that is used in the furnaces. The more the machine runs the more will be the amount of expenses related to fuel, stores and spares, depreciation of machinery and Maintenance.

Pool 3:Stores and spares Depreciation, Repairs and Maintenance.

Machine Hours The more the machine runs the more will be the amount of expenses related to,stores and spares, depreciation of machinery and Maintenance

Pool 5: Vehicle running and manufacturing, Transportation, Printing and Machinery, Packaging, other manufacturing expenses.

No of Production glass container / Flaot Glass

The more the production of the glass occurs the more will be the vehicle running costs for the transfer of raw material.

Pool 6: Travelling and Conveyance, Communication.

Labor Hours The more the labors work the more will be spent on their entertainment to keep them motivated and more they will be shifted from one factory to another hence an increase in travelling and conveyance .

Pool 7: Inspection for electrical Installation.

Operating hours of the factory. The long the factory remains open the more will be the inspection activity of the electrical installation.

Other costs: Insurance, rents, taxes. Auditors remuneration

These costs are cannot be related to any cost driver because of the fact these are mandatory expenditures which will occur whether production occurs or not.

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Recommendations:The company at the present is using the simple excel sheet and accountant intuition in

calculating the cost of the production, but if the company adopts the ABC system it will not only

specify which costs are to taken into account by the company and which can be ignored for the

progress of the firm.

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References:http://www.pfg.co.za/home.asp

www.tangram.co.uk/TI-Glazing-Float%20Glass.html

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