Rexam keeps ahead of aluminium price rises

February 23: Although Rexam spent around $1 billion on aluminium and conversion costs for drinks cans last year it was able to offset this by raising prices to customers and exploiting efficiency improvements.

Commenting on its results for 2005, chief executive Lars Emilson revealed that the world’s leading beverage can manufacturer had been able to keep ahead of aluminium cost rises of $78m in the year by means of a combination of volume rises, changes in the product mix, price increases and operational efficiencies. These totalled $107m, providing a net benefit of $29m. Similar improvements in the plastics and glass packaging operations had been possible.

In the Americas, where Coca-Cola is Rexam’s biggest customer, prices had “largely” been passed through but in Europe prices are hedged over a three year programme.

Sales from ongoing operations increased by 8 percent in 2005 to £3.21 billion (US$5.62bn) with pre-tax profit up 7 percent to £307m ($537m). Beverage cans, produced in plants in North and South America, Europe, China and now the Middle East, provided more than two-thirds of the ongoing business with sales of £2.24bn ($3.91bn). Underlying profit from sales of £313m ($547m) provided the highest return on sales in the company of 14 percent.

Recent developments include the acquisition of the Ecanco beverage can plant in Egypt and a bid for Dutch firm Airspray NV, the world leader in the manufacture of foam pumps.