Topic of the month in march: 2002 Review on International Container Glass Markets

Although technical innovation in packaging was boosted in a continuing stream, 2002 saw overall container glass markets increase slightly, in contrary to Flat Glass or Glassware.

The global economic slowdown, however, has missed the container glass segment. Mexican Vitro f.ex, one of the leading global players, reported that Glass Containers results, opposite to Flat Glass and Glassware, were less affected by the macroeconomic environment, particularly in the domestic market, and benefited from its strategy to target niche specialty product markets.

According to another worldwide leading producer, North American O-I, the Glass Containers segment reported 2002 net sales of up 8.5% to those a year ago. Its North American glass container operations achieved a 16% increase in both sales and EBIT (earnings before interest and taxes) for the full year 2002 compared with 2001, with over half the EBIT increase resulting from the Canadian operations acquired early in the fourth quarter of 2001.

South American glass container operations reported lower sales and EBIT for the full year 2002 as compared with 2001. The decreases were due to unfavorable currency translation rates compared with 2001 and slightly lower unit sales volumes, primarily caused by political and economic uncertainty in Venezuela. A national strike in Venezuela that began in early December caused energy supply curtailments that forced the Company to idle its two plants in the country. Fourth quarter sales and EBIT were adversely affected by approximately $20 million and $5 million, respectively.

European glass container operations continued to report improved sales, EBIT, and EBIT margins for the full year 2002 compared with 2001 as a result of higher unit shipments, increased selling prices, improved manufacturing performance, and favorable currency translation rates.

Asia Pacific glass container operations recorded a 5% increase in both sales and EBIT for the full year 2002 compared with 2001. Higher unit shipments and favorable currency translation rates were partially offset by modestly lower selling prices and higher warehousing and distribution costs. Moreover Australian Amcor states that the businesses in Australia and New Zealand delivered a 13% improvement in earnings. A major achievement during the half was the successful startup of the wine bottle plant in Gawler, South Australia. This business is exceeding its planned sales forecast and has made a positive contribution to earnings in its first half of operation.

As summary of all above facts it can be concluded that Container Glass Industry continues to achieve better figures than other glass producers, which, however, is regionally different.

The next report in this series will be a focus on the international flat glass industry.

Source: OGIS GmbH, www.glassglobal.com
(The foregoing information was compiled from publicly available information in annual reports and news releases)