Coronavirus forces closure of Crown plants in China

The coronavirus spreading through China and elsewhere have forced the closure of Crown’s operations in the country, chief executive Tim Donahue said.

The US-based canmaker’s three beverage can factories were forced by authorities to remain shuttered after the national holiday to celebrate Lunar New Year festival, Donahue told analysts in a conference call after announcing Crown’s latest set of earnings.

“Coming out of the Chinese New Year, Beijing had a mandatory shutdown through 2 February, and almost every other province extended the mandatory shutdown except for critical industries through 10 February,” he said. “So, the three beverage can plants are on mandatory shutdown, and we’ll reopen next Monday unless they extend the shutdown.”

Much of China has been put on lockdown in a bid to staunch the spread of the disease, which first emerged in the central Hubei Province city of Wuhan late last year. The virus, which causes respiratory illness, has so far killed 630 people and infected more than 30,000 nationwide, authorities have reported.

Businesses have been forced to close in and around Wuhan and other major cities, and millions of citizens have been ordered to remain at home in the worst-affected areas. The Lunar New Year break, which usually lasts a week in China, was extended to give authorities time to put containment measures in place before hundreds of millions of people travelled back from their holidays.

Donahue said he expected the shutdown to dent the company’s bottom line even though Crown’s business is relatively small in China.

“It’s about $95 million in sales and certainly, we’re expecting a lower income this year,” he said. “We haven’t budgeted anything significant for coronavirus, and we’ll see how it manifest itself going forward.”

Crown reported that 2019 beverage can volumes rose 7 per cent in the fourth quarter and 3 per cent for the year. Net fourth-quarter sales were US$2.79 billion compared with $2.73bn over the same quarter the previous year, reflecting the growth in beverage can volumes, while net profit was $87m compared with $53m in the same quarter in 2018.