O-I acquires Chinese firm in mass beer market push

By Guy Montague-Jones

- Last updated on GMT

Related tags Guangdong

Owens-Illinois (OI) has agreed to acquire glass packaging firm Hebei Rixin Glass Group in a deal aimed at opening up opportunities in the growing mass beer market in China.

Financial details of the acquisition were not disclosed but OI said the deal includes two plants in the Beijing/Tianjin region and provides an additional 270,000 tonnes of capacity for the company.

It will take OI’s overall capacity in China to more than one million tonnes, making the company the second largest glass container manufacturer in China.

Lower cost profile

OI said it sees the latest acquisition as a key to developing its presence in the mainstream beer market in the country.

O-I Chairman and CEO Al Stroucken said: “The newly acquired plants have lower cost profiles than our existing operations in China, thereby enabling us to expand our reach beyond the premium markets and into the rapidly growing mass beer market.”

China is now one of the biggest global beer consumers and it is positioned for further high growth over the coming years. A recently published report from Canadean predicted that China will account for a quarter of global beer consumption by 2015, making it double the size of the US market.

O-I Asia Pacific President Greg Ridder said the acquisition of Hebei Rixin will help the O-I accompany its brewing partners in their quest to exploit this growth opportunity.

Ridder​said: “This acquisition complements our existing production in China, adding to our product range and mix, and significantly increases our profile in the greater Beijing/Tianjin area. Many of our customers are targeting growth in this region, so our presence there enables us to partner with them, as well as serve new customers.”

The latest acquisition follows other recent purchases in Sichuan Province in May and Guangdong Province in October. Combined with the latest takeover, these have enabled O-I to double its capacity in China over the past year.

As the company expands in emerging markets like China it is consolidating its position in the developed markets. Last year, it shut two European factories; one in Finland and the other in France.

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