Crown to build beverage can plant in Kazakhstan

By Ahmed ElAmin

- Last updated on GMT

Related tags: Europe

In a bid to follow the growth of the beverage market eastwards,
Crown will build a new can production plant in Kazakhstan.

"Crown Bevcan continues to expand its presence in Europe, North Africa, the Middle East and Eurasia to align with customer investments and market growth opportunities," stated JohnClinton, Crown's senior vice president of the unit. "Several leading soft drink and beer companies have recently increased capacity in the region and the new facility in Almaty will allow usto support the growth of their brands on both a local and global level." The plant is being designed so a second production line can be installed, allowing Crown to increase capacity as market demand grows. The plant will be located in the Burundai suburb of Almaty andadjacent to local customer filling plants. The plant will also serve neighboring markets. Crown Bevcan, a unit of the company, plans to begin commercial production of 33cl and 50cl cans in the first quarter of 2007. It will be capable of producing 750 million aluminum beverage cans ayear. Baltic Beverages Holding (BBH), the brewing group owned jointly by Carlsberg of Denmark and Hartwall of Finland, is to further extend its presence in eastern Europe with the acquisition of a 76 per cent stake in the Kazakhstan brewery, Irbis. Earlier this month Baltic Beverages Holding (BBH), the brewing group owned jointly by Carlsberg of Denmark and Hartwall of Finland, said it would further extend its presence in eastern Europe with the acquisition of a 76 per cent stake in the Kazakhstan brewery, Irbis. The deal was carried out by BBH's Russian brewery Baltika, and will see the company enter the Kazakhstan market for the first time. Although Irbis is already well established there, BBH said there is still room for improvement, and will begin construction of a new brewery as soon as it can obtain the necessary approval. The €45 million brewery will have an initial capacity of 75 million litres, and should begin production by the summer of 2004. In the meantime, BBH said it would invest in strengthening Irbis' brand portfolio and in introducing a number of new brands produced at its other breweries in Russia. Earlier last month Crown completed the sale of its global plastic closures business to PAI Partners, a private equity firm. Crown's international plastic closures business is mostly based inEurope. Crown, which claims to have invented the bottle cap a century ago, has decided it does not want to be in such a market. The company received net cash proceeds from the sale of about US$690 million. Plastic closure production is already highly consolidated, with 465 companies involved in the European market in 2004. Analyst AMI estimates that as many as 200 companies could move out of closureproduction in Western Europe over the next five years in an already consolidated industry. The leading 10 companies account for about 60 per cent of the market and the top 25 account for about 75 percent. In another sign that the Eastern European and Asian markets are attracting a lot of attention from food and beverage companies and their suppliers, Alcan announced last week it had acquired theremaining 35 per cent stake of Propack, the company's Chinese subsidiary that specialises in flexible packaging for the food industry. "This investment is further evidence of our commitment to the dynamic Chinese market - a region in which we are looking to continue to make investments in the coming years," statedChristel Bories, Alcan's president and chief executive officer. Propack became part of Alcan as a result of the acquisition of VAW Flexpac in May 2003. The company had sales of US$90 million in 2004. In Asia, Alcan Packaging has leading positions in the food, pharmaceutical and beauty markets and operates 12 plants in 5 countries with more than 5,000 employees.

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