Rexam rushes to meet heating of demand
Valor Econômico
The explosion of the demand of beverages this summer of temperatures above 40°C caught the manufacturers of aluminum cans for beers, soft drinks and fruit juices unprepared. The biggest company of the sector, Rexam, for instance, reported it will import one billion units and speed the investments of R$ 180 million (US$ 97.3 million) in the resumption of factories and expansion of units in Brazil and Chile. In January this year, the production of the industry of beverage cans grew 26% compared to the same month last year. Rexam's competitors, such as Crown and LatapackBall, are also rushing to increase the offer of material, as well as making use of imports in order to complement the needs of their customers in the country.
According to André Balbi, Officer for the Americas of British group Rexam, the demand this summer was 5% above the productive capacity. He explains that before the crisis the most optimistic forecasts were that the industry would grow up to 6% in 2009. Those forecasts were reviewed to stagnation and even to decline soon after that. However, at the end of last year, the expansion seen in the market reached 11.7%. The Executive Director of the Brazilian Association of Highly Recyclable Cans Manufacturers (Abralatas), Renault de Freitas Castro, acknowledges the industry made a mistake in the projections. "Not only was there a reduction in the production, there was also a reduction in the investments, which was more serious", he affirms.
The sector works with investments at the winter season. This is the time the plants can reduce the pace a little in order to make the expansions of their lines. A can factory has the capacity to produce three thousand cans a minute. Balbi says that every time a line stops to change a label, which takes nearly 30 minutes, it means there are 90 thousand less cans in the market. For that reason works are not allowed in the summer.
In order to fight the loss, the company, which currently produces 11.5 billion cans a year, will start producing13.7 billion cans next year, with the reopening of the Pouso Alegre plant (MG) and the increase of the current installed capacity of the units in Jacareí (SP), Recife (PE) and in Chile. Rexam may have to import one billion cans from their plants in the United States and Mexico this year. That will also help those plants because the demand in the USA is falling due to the crisis.
Rexam also plans investments in innovation. Besides the R$ 180 million (US$ 97.3 million) in the plants, another R$ 20 million (US$ 10.8 million) will be spent in new models of cans and labeling types. He highlights it was the company that invented the ‘sleek', the 16oz and the 8.4oz cans, for instance. Besides, now it can print photographic quality images on the labels. "That helps the beverage industry to use the can as a means of communication and marketing, besides adding added value to the packaging", says the commercial Officer.