Rexam sells UK glass operation to Ardagh

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Related tags: Rexam, Europe

Facing increasing competition in the UK glass container market
Rexam has exited the glass business in that country aspart of its
growth strategy in Europe, reports Ahmed ElAmin.

Rexam​, the world's top beverage canmaker, said it would continue to focus on developing its existing glasscontainer business in northern continental Europe, where it has an establishedmarket position, and in the developing markets of eastern Europe, said company spokesperson AndrewMills.

The company has made a series ofacquisitions over the past two years and says in its latest annual report that itis looking at other "opportunities" for growth.

The UK glass business, based inBarnsley, was sold to Dublin-based Ardagh Glass for £50m (€73m) in cash.Ardagh, which trades under the Rockware brand in the UK, said it would merge theRockware and Rexam businesses.

Rexam was number three in the UK glassmarket and was facing increasing competition Mills said. Rockware is number one in the UK glass market followed by I-O's UnitedGlass.

Meanwhile competitor Quinn Glass isramping up production in the UK. The company, which started operations in 1998to service customers in Ireland and the UK, is due to open a plant this monthwith a capacity of 1.2 billion glass containers a year.

"The plant is going to create capacityin an already fragmented market,"​ Mills told FoodProductionDaily.com.

He said the UK customers formerlysupplied by Rexam should experience no delays in their glass products due to thesale. Ardagh has indicated it might not keep all of the current 700 staffemployed at the Barnsley glass making business.

In 2004, the Barnsley business had anoperating profit of £3m (€2.4m) on sales of £101m (€80.3m). As at 31December 2004, the business had net operating assets of £59m (€46.9m)according to Rexam's lastest annual report.

Rexam is one of the world's top fiveconsumer packaging companies. Itsglobal operations focus on beverage packaging in metal, glass and plastic. Thegroup has operations in 22 countries.

The sale of the UK glass business willleave Rexam with glass operations in Germany, Holland, Poland and Scandinavia.In the company's 2004 annual report the chairman, Rolf Börjesson, said thecompany would continue its strategy of growth in key markets.

"We continue to see numerousacquisition opportunities, some of which we seek to take advantage of, to buildon our position in consumer packaging,"​ he wrote.

The company bought a beverage canbusiness in Brazil in November 2003. In line with its strategy to consolidatethe northern European glass container market, the company later acquiredglassworks in Holland and Poland.

Following the acquisition of RisdonPharma in 2003, the company acquired Plastic Omnium Medical in France, asupplier of drug delivery and dispensing systems. About 15 per cent of the company'ssales are now from emerging markets, including countries such as Brazil, Russiaand China.

During 2004, the company acquired fullownership and control of beverage can plants in Mexico and China.

Last month Ardagh was taken over by Caona, a special-purpose companycontrolled by some of Ardagh's largest shareholders.

Related topics: Processing & Packaging

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