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Russia driving European beverage can growth - Rexam

By Joe Whitworth , 15-Nov-2012
Last updated on 15-Nov-2012 at 14:03 GMT

Russia has returned to beverage can growth in Q3 after legislation relating to kiosk beer sales returned certainty to the consumer, according to Rexam.

In a conference call, discussing the firm’s performance, Graham Chipchase, Rexam’s chief executive suspected it was more certainty for the consumer about what was happening up to the legislation change, combined with oil prices and gross domestic product (GDP) factors.

Chipcase added that the additional production lines at Belém, Brazil, Mantsala, Finland and Ludesch, Austria were all on track, in the firm’s interim management statement from 1 July 2012.

In line with plans

Overall performance in beverage cans was in line with the firms plans, with global volumes up 6% in Q3. European volumes increased at a slightly lower rate than in the first half as expected, while Russia returned to growth.

In North America the recovery of some of the standard can volumes lost in 2011 continued to drive performance, and growth in South America accelerated.

Net debt at 30 September 2012 was £1.2bn; lower than at 30 June primarily due to the $250m of proceeds from the sale of High Barrier Food.

The divestment of the High Barrier Food packaging business to Silgan Holdings was completed on 31 August 2012.

Global look

Chipchase said North America saw exactly the same trend that it has seen throughout the year.

He added: “I think we see South America continuing in the trend we are seeing in the last few months, so I think what that means is we will be, you know, in the right place and where we said we would be earlier in the year about 5% growth year on year, I think we feel that’s looking pretty good.

“I think you’ll remember we had very strong growth in the first half of specialty cans, clearly its slowed down in Q3 as we always said it couldn’t sustain that sort of growth rate, so if we end up in that sort of high single digit number maybe low double digits that would be fine for specialty cans by the end of the year in North America.

“In Europe, I think its always a bit more difficult one to predict, but I think Russia looks quite good, the pick up we are seeing there, and I would hope we might see a little bit of a pickup of specialty cans in Europe because that’s dropped off a little bit after a very strong first half but I would say the trends would be mostly the same by the time we get to the years end as we’ve seen year to date at the moment, i.e. slightly lower than the first half.”

Not a Monster impact

When asked if the firm had seen any impact from the recent controversy surrounding Monster , he said it was only about 5% of North American volume and not a huge part of the portfolio and added that Rexam supports the American Beverage Association (ABA) position on improved labels on energy drinks around caffeine content.

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