US-based Owens-Illinois, Inc. announced on 21 December 1995 that it has completed important steps in the expansion of the company“s rapidly-growing international operations, with two strategic acquis…
US-based Owens-Illinois, Inc. announced on 21 December 1995 that it has completed important steps in the expansion of the company“s rapidly-growing international operations, with two strategic acquisitions serving markets in Eastern Europe, and initiated a series of investments to expand capacity in Latin America. In Eastern Europe, the newly acquired businesses in Hungary, Estonia, and Finland are expected to add more than US$ 100 million in sales to Owens-Illinois“ international operations in 1996. The new acquisitions include: – a glass container plant in Oroshaza, Hungary, which was purchased from Orosglas Kft; – two glass container plants (in Jarvakandi, Estonia, and Karhula, Finland) and a plastic bottle plant in Ryttla, Finland, all of which were purchased from A. Ahlstrom Corporation, of Finland. Owens-Illinois plans to double the output of bottle maker Jarvakandi Klaas, to about EKr 300 million (US$ 26 million) this year. In 1995, Jarvakandi Klaas sold EKr 142 million worth of products. Its 1994 turnover was EKr 67 million , while in 1993 it turned over EKr 37 million. The newly acquired glass container businesses are the market leaders in their respective countries, with market shares of approximately 70% in Hungary and 90% in Estonia and Finland. As a member of the European Union, Finland is a strategic gateway to emerging markets in the St. Petersburg region of the Russian Republic and the Baltics. The purchase prices were not disclosed. The new affiliates plan to implement major capital investment programmes to upgrade and expand their manufacturing plants. R. Scott Trumbull, Owens-Illinois executive vice president, international operations, said, “With operations in Poland, Hungary, Estonia, and Finland, we now have a strategic presence in the Eastern European region, where demand for glass containers is growing rapidly.” With a population of approximately 350 million, the Eastern European region has considerable potential for growth in glass container demand. Annual glass container usage in the region is estimated at only 35 per person, compared with 175 in the United States. Concurrently, Owens-Illinois announced that affiliated companies in Latin America are undertaking a series of capital investments that will increase their manufacturing capacity by approximately 20% over the next two years. Latin America: the Latin American affiliates, principally in Brazil, Colombia, and Venezuela, plan to make capital investments totalling approximately US$ 230 million to increase capacity and improve productivity over the next two years. These improvements will be financed by the cash flows and borrowing capacities of the affiliated companies. Mr. Trumbull said, “In Latin America, where our international presence is strongest, glass container sales are continuing to grow rapidly, driven by improving economic conditions and the growing popularity of convenience packaging.” These projects will be in addition to a previously announced joint venture with Guardian Industries Corp. to build a float glass manufacturing plant in Colombia. In the past four years, Owens-Illinois has now acquired controlling interests in eight glass container companies serving emerging foreign markets and added 10 companies to the worldwide network of glass container manufacturers that are licensed to use Owens-Illinois technology and equipment. Owens-Illinois now has a presence in 38 countries, and approximately one of every two glass containers made worldwide is manufactured by Owens-Illinois, its affiliates, or its licensees. In 1995, sales of Owens-Illinois“ international operations are put at over US$ 1 billion for the first time, up from US$ 793.4 million in 1994. The company“s annual turnover is US$ 3.6 billion. Owens-Illinois is also making plans to buy a workshop for the manufacture of glass containers in Panevezys, Lithuania. The workshop is owned by the Panevezio Stiklas (Panevezys Glass) joint stock company. For the time being, the Americans can purchase up to 30% of the company“s stock capital. At present the Panevezys enterprise has an outstanding debt of approximately 100 million lits. However, the company has become a profit-making enterprise following reconstruction work completed in September 1995. About 85% of the company“s production is exported abroad. All raw-materials, with the exception of quartz sand, come from foreign countries. The future owners of the factory plan to cut its staff of 1200 workers by half.