The Australian-based packaging company Amcor is to invest A$125m in building a glass furnace at its South Australian wine bottle facility.

The company expects the furnace to add an extra 200m wine bottles a year to output, though production will be phased in according to the supply agreements it has. Production is scheduled to start from the middle of 2005.

The furnace is the second at the company's bottling facility and is in response to growing demand from customers, which has meant that existing supply agreements have either been extended or up-graded.

In total the bottling plant will now be able to produce some 400m premium wine bottles a year.

"The existing plant was profitable in the first six months of operations and is on target to deliver a 15% return on investment," Amcor managing director Russell Jones said. "The long term supply agreements that support the second furnace will ensure a return in excess of 15% is achieved for this new investment.