Rexam to Reduce Beverage Can Capacity in Russia

The end line will be relocated within Russia whilst the can line will be eventually redeployed as market conditions improve.

4 Aug 2009 Rexam has announced that it is to cease making beverage cans and can ends at its Dmitrov plant near Moscow to address the continued weakness in the Russian beverage can market.

Whilst this will reduce annual active capacity in Russia by some 1.3bn cans, there will be no impact on Rexam’s ability to meet customer requirements.

The closure of Dmitrov, which was acquired as part of Rostar in January 2008, will result in annualised savings of approximately £6m in 2010 for an exceptional restructuring charge of £16m in total in 2009 of which some £8m will be cash costs.

It forms part of the capacity reduction programme in our European beverage can operation which, in total, is expected to save some £20m in 2010. The end line will be relocated within Russia whilst the can line will be eventually redeployed as market conditions improve.

Commenting, Leslie Van de Walle, Rexam’s chief executive said: “Despite poor volumes in Russia, the Rostar acquisition is delivering good returns on our investment, and long term growth prospects remain very attractive.”