Paraguay , Uruguay , Panama , Argentina , Mexico , Chile , Guatemala and Brazil

Salud! Where aluminum can giant Ball sees LatAm growth seams

Bnamericas Published: Thursday, June 11, 2020
Salud! Where aluminum can giant Ball sees LatAm growth seams

US-headquartered aluminum products manufacturer Ball has beverage can operations across the Americas, including plants in Brazil, Mexico and Argentina. In the region, the company – which posted global net sales of US$11.5bn for 2019 – has also built a new plant in Paraguay and expanded capacity in Chile.

The Paraguay facility, which has a 1bn can/year capacity, required investment of US$80mn. Output will supply local and neighboring markets and bosses could expand the unit.

To find out about how the health crisis has impacted the company and demand trends, BNamericas spoke with Daniel Figueiredo, Ball’s Latin America commercial manager.

BNamericas: How are things in terms of demand?

Figueiredo: The level of consumption decreased mainly at the end of March and during April on account of the pandemic, mainly in countries where government measures were more restrictive, but little by little the situation stabilized. 

What has changed the most is the context of consumption: people are consuming more at home because of the closure of bars and restaurants in the region. In some countries we have had to preventively close plants – as some of our clients have – because of the pandemic, but our production continues and we work regionally, in an integrated manner, to satisfy demand permanently, without interruptions.

BNamericas: Are you working on any projects in the region?

Figueiredo: We are investing heavily in the region. In 2019, the Chilean plant increased its productive capacity and we also cut the ribbon on a new plant in Paraguay, which leaves us confident that growth will be sustainable over time.

BNamericas: In Latin America, where do your supplies (aluminum, etc.) come from and have you experienced any supply chain problems?

Figueiredo: We haven’t experienced supply disruptions that have affected production.

BNamericas: What trends do you see in terms of future demand for your products in the region?

Figueiredo: Demand for aluminum cans has been increasing in several categories. The beer category is still the one that accounts for much of this growth, but we must also point out that some categories are already consolidating in the market, such as canned wine or ready to drink [examples include alcopops]. And why not mention the recently launched canned water in Brazil by two strong market players. This wave of growth is mainly supported by the change in consumer habits and the environmental awareness of consumers, who have known how to value the most sustainable packaging for beverages due to its high degree of recyclability.

Then there are craft breweries. In Peru, less than a month ago, Heineken bought Tres Cruces, a beer brand with strong roots in that country. In Chile, in August 2019, Kunstmann bought a stake in the Szot brand, which, in turn, is part of Chilean beverage heavyweight CCU. Both transactions are examples of the adaptability of the industry through two basic strategies.

Another significant change is innovation in packaging. In Chile and the world craft breweries are leaning toward the can because it better preserves the properties of the product and prevents the entry of air and light. That also facilitates the delivery channel since it is light, easy to transport, does not break and represents cheaper freight for the consumer.

BNamericas: In terms of aluminum recycling levels, in general, what is the current situation in the region and what is the perspective in this regard?

Figueiredo: Regarding our sector, the aluminum can is 100% and infinitely recyclable and currently has recycling rates that reach 70% worldwide. On the continent, Brazil leads this practice with a rate of 97%, although in Chile the average is 26%. Even so, the percentage is higher than the recycling of other types of packaging.

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