Rexam weathers weakening of Russian can market

Rexam has defended its acquisition of Russian beverage can manufacturer Rostar after the company reported a softening in the market in the third quarter.

In its interim management statent published today, chief executive Leslie Van de Walle said Russia is a huge market where soft drinks are under consumed in the can format. He remained confident about the "medium to long term potential" of the market.
"As far as the Rostar acquisition is concerned all the synergies that we planned and the benefit of consolidating this market is coming through and this remains a good acquisition," he said.
Despite the Russian market, the company reported a solid performance across its beverage can and plastic packaging division for the four months ended 31 October.

It has shown growth across its European and South American beverage can divisions, helped by growing brands, such as Red Bull.
However, the North American beverage can market has been impacted by rising food prices, resulting in the announcement in July that Rexam would cut capacity by 9%. This has also led to slowed sales in the closures division due to lower soft drink consumption in the US.

Meanwhile, pharmaceutical packaging sales in Europe have driven performance in the healthcare division. Performance in the dispensing systems and home and personal care continues to be soft in North America, reflecting the economic climate.
Van de Walle said the company is a "defensive and resilient company", but as yet it is not clear how the economic downturn will affect trading in 2009. He said: "We will continue to manage stringently those levers over which we do have control, including a rigorous focus on efficiencies and cost reductions."

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( Source: PackagingNews )