Britain's Rexam LLC saw 2006 as a growth year for its beverage can business, with volumes increasing 10 percent and achieving market share gains in the United States, where it is represented by Rexam Beverage Can North America.
The company is beefing up for 2007 and beyond, most recently investing $24 million for a 50-percent stake in a new beverage can plant in Guatemala. The greenfield plant, completed in December 2006, has an annual capacity of approximately 1 million cans.
The Central American beverage can market, as a whole, is growing at approximately 6 percent annually and this growth is expected to continue in the near term. The Guatemala plant joins an existing Rexam plant in Queretaro, Mexico, and a recently opened can plant in Brazil.
The company also is investing in a new line for the growing non-standard-size beverage can market in the United States, Europe and South America. In North America, beverage cans of non-standard size now account for 12 percent of Rexam's volumes. In Europe, Rexam is building a new plant in Austria to meet demand for cans for the energy drink market, and in Russia the company is adding a plant in the Urals to serve growing local requirements. Rexam's existing plant in Russia will get a new line for 1-liter cans to meet demand for larger beer containers, and the company also is adding a line in Egypt.
As for aluminum costs, which the company said rose 40 percent in 2006, they are largely passed on to customers in the North American market. The company said it renegotiated one supply contract in the United States last year that saved it $28 million.
Ball Corp., which claims to be the largest producer of recyclable aluminum beverage cans in the North American market, said that the first quarter of 2007 was its best ever from an earnings standpoint. Ball, which has 20 plants and manufactures more than 32 billion beverage cans annually in North America, expects its 2007 results to show a solid improvement over the previous year.
The company has begun working off aluminum sheet inventories on hand at the end of 2006, which should lead to fresh purchasing going forward. The company also has undertaken a project to upgrade and streamline its beverage can end-manufacturing processes, and expects that capital project to be completed in 2008.