Rexam plans to close 1.1bn capacity beverage can factory
“The beverage market in Europe has reduced significantly in Europe this year and it is a question of balance and capacity in the market,” Jonathan Thorton, the company’s communications director, told FoodProductionDaily.com.
A victim of global recession, production at the plant should be wound down and the facility closed, he added.
Soft drinks market
The Dunkirk plant manufactures 33cl and 50cl steel cans mostly for the soft drinks market. It has an annual capacity of 1.1bn cans but information on recent production at the facility was unavailable.
Rexam said closing the Dunkirk plant would not impact the company’s ability to meet customer requirements. The shortfall generated by closing the Dunkirk plant would be filled by the company’s other plants in Europe.
The company announced its intention to reduce capacity in the European market when it reported its half year results.
Closure of the Dunkirk plant follows Rexam’s decision last month to end production at its Dmitrov plant, near Moscow. The company acquired the 1.3bn capacity plant last year as part of its take-over of Russian beverage can manufacturer Rostar.
Long term growth
At the time of the Russian plant closure Leslie Van de Walle, Rexam’s chief executive said: "Despite poor volumes in Russia, the Rostar acquisition is delivering good returns on our investment, and long term growth prospects remain very attractive."
In addition to the Dmitrov facility, the acquisition of Rostar also included a plant at St Petersburg with an annual capacity of 1.7bn cans.
The company said this week that the closure of the Russian plant will incur an exceptional cost of ₤54m of which ₤25m are expected to be cash costs arising mainly in 2010. The move is expected to generate savings of ₤20m next year.
In May, Van de Walle said: “In the shorter term, the full extent to which the economic downturn will affect our trading in 2009 remains unclear. But we will continue to focus on generating cash and reducing costs by proactively managing the variables over which we do have control."
“The beverage market in Europe has reduced significantly in Europe this year and it is a question of balance and capacity in the market,” Jonathan Thorton, the company’s communications director, told FoodProductionDaily.com.
A victim of global recession, production at the plant should be wound down and the facility closed, he added.
Soft drinks market
The Dunkirk plant manufactures 33cl and 50cl steel cans mostly for the soft drinks market. It has an annual capacity of 1.1bn cans but information on recent production at the facility was unavailable.
Rexam said closing the Dunkirk plant would not impact the company’s ability to meet customer requirements. The shortfall generated by closing the Dunkirk plant would be filled by the company’s other plants in Europe.
The company announced its intention to reduce capacity in the European market when it reported its half year results.
Closure of the Dunkirk plant follows Rexam’s decision last month to end production at its Dmitrov plant, near Moscow. The company acquired the 1.3bn capacity plant last year as part of its take-over of Russian beverage can manufacturer Rostar.
Long term growth
At the time of the Russian plant closure Leslie Van de Walle, Rexam’s chief executive said: "Despite poor volumes in Russia, the Rostar acquisition is delivering good returns on our investment, and long term growth prospects remain very attractive."
In addition to the Dmitrov facility, the acquisition of Rostar also included a plant at St Petersburg with an annual capacity of 1.7bn cans.
The company said this week that the closure of the Russian plant will incur an exceptional cost of ₤54m of which ₤25m are expected to be cash costs arising mainly in 2010. The move is expected to generate savings of ₤20m next year.
In May, Van de Walle said: “In the shorter term, the full extent to which the economic downturn will affect our trading in 2009 remains unclear. But we will continue to focus on generating cash and reducing costs by proactively managing the variables over which we do have control."
