Constellation will share control of the plant with Owens-Illinois

Constellation will share control of the plant with Owens-Illinois

Constellation Brands has completed its US$300m acquisition of Anheuser-Busch InBev's glass production plant in Mexico with new JV partner Owens-Illinois.

The company, which took control of A-B InBev's Piedras Negras brewery last year, said the plant will supply more than half of its glass needs for its US beer business. The glass plant is next to the brewery in north east Mexico.

“This strategy gives us greater control over our glass needs in terms of quality, flexibility, and cost-effectiveness,” said Rob Sands, Constellation's president & CEO.

The purchase was the first act of Constellation's new 50-50 joint venture with Owens-Illinois, which was finalised yesterday. The JV will own and operate the plant as well as undertake expansion work.

Plans are in place to increase the capacity of the plant from one furnace to four furnaces over the next four years at a cost of around $300m to $400m, shared equally between the JV partners. The investment will see employee numbers rise from the current 260 to 800.

The JV and glass plant purchase was first announced in October.

In the same month, Constellation said that a glass bottle recall for its Corona Extra beer brand this year cost the company an estimated US$9m.