Cheer in Vietnamese beer for O-I after Aussie doldrums

By Ben Bouckley

- Last updated on GMT

Related tags: Beer

Victoria Pale Lager: A competitive Australian beer market is leading firms such as United Carlton Brewers to develop innovative glass packaging with O-I
Victoria Pale Lager: A competitive Australian beer market is leading firms such as United Carlton Brewers to develop innovative glass packaging with O-I
Only weeks after it scaled-back production in Australian due to a flat market for glass caused by slow beer sales, glass packaging giant Owens-Illinois (O-I) has opened a new production plant in Vietnam.

The new glass container manufacturing site will employ 450 people and is a joint venture (JV) with Vietnamese companies, Berli Jucker Public Company (BJC) and Saigon Beer Alcohol Beverage Company (SABECO).

O-I supplies most of Vietnam’s local and global food and beverage companies, and CEO and chairman Al Stroucken noted that most of the country’s beer was packaged in glass.

Big glass opportunity

He said the new plant would allow O-I to meet and exceed the high expectations of current and future glass customers in the region, with Vietnam experiencing strong economic growth.

Stroucken said: “Glass is the most economical and sustainable packaging available, especially when using returnable containers, so it is vital that we have operations in place as the markets in this region grow and mature.”

Situated around 60km southeast of Ho Chi Minh City, the new $47m (€35.7m) plant will initially produce around 75,000 tonnes of (mainly returnable) premium glass containers for Vietnam’s beer, soft drinks, wine, spirits, food and pharma markets using three lines.

O-I said that, with capacity ceiling of 84,000 tonnes of glass annually and up to four lines – the plant also had the capacity to adapt to market trends; it currently has one furnace and two applied ceramic labeling printing lines.

BJC president Aswin Techajkareonvikul said his company was focused on regional expansion in Southeast Asia, particularly in Indochina and Malaysia. “Together with our TGI glass plants, the joint venture will make BJC and O-I the largest producer of glass containers in Southeast Asia,” ​he said.

And SABECO chairman Nguyen Ba Thi said that Vietnam was one of the fastest-growing beer markets in the world, a far cry from Australia, an established market where O-I recently cut production.

O-I downsized its Melbourne plant in mid-January – cutting furnace usage from three to two – and blamed a decline in native beer and wine consumption, increased bulk wine shipping to the US and UK and a high Australian dollar that assisted imports.

Asked what steps O-I was taking to counter the current demand decline, spokeswoman Simone Stella told BeverageDaily.com that​the Australian beer industry still offered opportunities. “Due to the competitive nature of the market, we've seen an increase in the amount of customers using new and innovative packaging to create a point-of-difference on-shelf,” ​she said.

Tough Australian market

Marketing and in-house design teams were collaborating with more customers from early-stage concept development through to finished goods labeling, Stella said, which meant increased speed to market and assurances that designs met manufacturing requirements.

Stella added: "We're also focusing more on consumer research to fully understand the opportunities and challenges in the industry and share these insights with our customers.”

“We're keeping abreast of industry trends which has resulted in the introduction of a number of new packaging options such as our craft beer bottle range, ensuring the availability of locally designed and manufactured bottles to this growing segment."

One example of a successful customer collaboration was the development with Carlton United Brewers (CUB) last November of an embossed beer bottle (pictured) for new product Victoria Pale Lager, Stella said.

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