Crown postpones beverage can expansion plans in China
Metal packaging firm Crown Holdings has announced that it has postponed plans to build two new plants in China as it reported a drop in profit for the third quarter
Crown said it had indefinitely postponed the plans to build new two new sites in Nanning and Xinxiang, China “consistent with our prudent approach in investing capital”.
The beverage can giant only announced plans to build a new plant in Nanning in February. The new plant in China was expected to be operational by the end of the second-half of 2013. It was due to have an initial annual production capacity of 750m two-piece 33cl aluminium beverage cans.
However, its plant in Heshan, China commenced commercial beverage can production in the third quarter on plan and on budget.
The announcement came as the firm said that Q3 profit for the three months ending 30 September 2012 was $369m compared to $396m in the 2011 third quarter, reflecting $16m of unfavourable foreign currency translation.
Net sales also fell from $2.4bn in Q3 2011 to $2.3bn for Q3 2012.
‘Sluggish economic conditions and unfavourable weather’
Commenting on the results, John W. Conway, chairman and chief executive, said: “We are pleased with the company’s overall operating performance and financial results in light of the continuing sluggish economic conditions and unfavourable weather in many of our markets.
“The company continued to benefit from the strength of the developing markets in which we prudently expanded over the last several years, the diversification of our product offerings and geographic footprint and our constant focus on cost containment.
“Globally, beverage can volumes were up 5% in the quarter with the Americas, Europe and Asia all contributing to the growth.
“From the beginning of 2011, we have commercialised ten new production lines including six new plant start-ups across Asia, Brazil and Europe.
“This includes our new plant in Heshan, China which commenced commercial beverage can production in the third quarter on plan and on budget. When fully operational, these facilities have combined annual production capacity of 8.6 billion beverage cans, all to meet expected demand.”
Conway explained that over the next twelve months the firm expects to commercialise another 3.6 billion in annual beverage can production capabilities in still growing markets in Cambodia, China, Malaysia, Thailand and Vietnam.
Crown Holdings third quarter 2012 results
$
2012 2011
Net sales $2.3bn $2.4bn
Gross profit $369m $396m
