Bulgarian group Drujba is expected to undergo major expansion within its production capabilities over the coming year as part of moves to consolidate its position within Europe's glass packaging market, say news reports in the country.
The proposed investment, expected to be funded in part by parent group Yioula Glassworks, will lead to the construction of two new glass melting sites in the country. By the time both are operational in 2008, the group will have an estimated annual production capacity of 1.2 bn glass containers, according to the Dnevnik newspaper.
The move will allow Drujba to keep up with its rivals within Europe's increasingly competitive glass containers market by tightening the supply chain for rigid packaging products.
The report adds that the first part of construction is already underway, with production expected to begin at the site in Plovdiv later this year. This will be followed by the second larger plant, where work will start in the next couple of months, aiming to be operational by mid-2008.
Drujba was unable to comment on the expansion at the time of going to press.
With a number of the group's clients like Heineken, Coca-Cola and Pepsi Co. all posting strong performances, particularly within Eastern Europe, the group's timing is prudent.
However, Drujba is not the only glass group interested in sharpening its focus on European glass production.
Rival packaging companies have already started to step up glass packaging production within the region's food and beverage industries in an effort to increase profitability.
In March this year, global giant Rexam announced it was to sell off its European glass operations to Ardagh Glass. The sale gave Ardagh an 18 per cent share of the total European market for glass packaging, allowing it more power over pricing of its products.