GLOBAL: Rexam expands to quench Brazil's thirst
- Expands capacity in Brazil
- Says Q3 trading in-line
- Still focused on cost savings
Rexam upbeat on Q3 trading
Drinks packaging giant Rexam has confirmed plans to significantly increase its capacity in Brazil to reflect strong demand for canned drinks in the country.
Rexam said today (16 November) that it will build a second production line for drinks cans in Brazil. This, together with upgrades to existing lines, will increase the firm's capacity in the country by 1.7bn cans, it said.
UK-based Rexam has spent the last couple of years working to restructure its business by scaling down operations in Europe and North America in order to focus more strongly on emerging markets. The firm produces 60bn cans per year globally.
Its total capacity in South America is set to rise to 14bn cans by 2012, compared to 11bn in 2009.
In Brazil, demand for drinks has provided a knock-on boon for Rexam. The world's biggest brewer, Anheuser-Busch InBev, said that its beer sales rose by 12.5% in Brazil for the third quarter of 2010, following on from a 15% increase in the first half of the year. A-B InBev's local subsidiary, AmBev, also reported a 6% rise in soft drinks sales volume for both the third quarter and the first nine months of 2010.
Rexam's CEO, Graham Chipchase, said: "We are investing in carefully selected, high return projects in emerging markets and higher growth segments that will improve our overall growth prospects while keeping capital expenditure under tight control."
He said that trading for the three months to the end of September was in-line with group expectations and that cost savings projects are on-track. "We continue to expect our results in the second half of 2010 to be similar to those of the first and remain focused on cash, cost and return on capital to ensure our business is in good shape going into 2011,” he said. Rexam swung back to profits in the first half of this year.
Despite a focus on emerging markets, Rexam has also reported growing demand in North America for so-called speciality cans, which encompass 16oz, 24oz and Rexam Sleekline. The group said it would increase production capacity for 24oz cans by 13%, or 400m cans, in North America by 2012.
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