USA – Glass packager Owens-Illinois has extended its joint venture with Constellation Brands in Mexico by almost 5%, at a value estimated to cost approximately US$140 million.
This deal came after the company’s net sales for the Q3 2017 increased to US$1.8 billion thanks to favourable currency rates and gains in both Europe and Latin America, while operating profit was up 10% to US$260 million.
According to FoodBev, O-I also cited a 1% increase in price on a global basis as a factor in the improved results, despite shipments being generally on par with the same period last year.
“We are seeing significant progress on O-I’s transformation to deliver increased sustainable shareholder value as we continue to execute on our strategy with focus, discipline and accountability,” said CEO Andres Lopez.
“Our rigorous approach is implemented by an entire organisation focused on maximising performance at the enterprise level and incentivised under a single set of metrics.
In the quarter, O-I demonstrated its resiliency in the face of well-known, challenging external conditions in the Americas by delivering a seventh consecutive quarter of earnings results in line with, or exceeding, our guidance.”
The company has also agreed to extend its 50-50 joint venture with Constellation Brands until at least 2034 – an extra ten years on the previous commitment – allowing for a fifth glass furnace at a production plant in Nava, north-eastern Mexico used to supply beer bottles to Constellation’s adjacent brewery.
“We are excited about the growth that will be enabled through our continued and expanded relationship with Constellation.
This investment will allow both companies to realise additional attractive opportunities in Mexican beer exports to the US, leveraging the success at the joint venture’s highly efficient factory in Nava, while bolstering O-I’s relationship with a key strategic customer,” said O-I’s Andres Lopez.