[ McClatchy-Tribune Information Services ]
Crown Holdings Inc. is based in Northeast Philadelphia, but most of the action these days for the $8 billion metal food and beverage container manufacturer is in China, Brazil and other developing markets, where consumer spending is growing at a faster clip than at home.
Crown announced plans Thursday for two new beverage can factories in China, both scheduled to open in 2013, plus the addition of a second production line at a factory under construction.
"The consumer market in China is growing at a rapid pace," Jozef Salaerts, president of Crown Asia-Pacific, said.
When the latest plants are ready, Crown will have 10 beverage can factories in China, up from four in 2006. It sold 48 billion beverage cans globally last year, up 9 percent from the year before.
Crown did not dislose specific customers for the new factories, but it lists the Coca-Cola Co. and Anheuser-Busch InBev NV as customers in its most recent annual report to the Securities and Exchange Commission. Those firms are among the many from the U.S., Europe and Japan expanding in China and other emerging markets.
Last week, for example, Coca-Cola said it and its bottling partners in China would invest $4 billion there through 2014, bringing investment since 2009 to $7 billion in what it called "the largest and fastest-growing consumer market in the world."
Anheuser-Busch InBev, the result of the 2008 merger of the St. Louis-based brewer of Budweiser and InBev, the Brussels, Belgium, owner of Stella Artois and Becks, said it had plans to invest several hundred million dollars this year in China, where its beer sales volume grew 11.7 percent in the second quarter, compared with a 1.7 percent decline in the United States.
AB Inbev already is ramping up production at a new brewery in Ziyang, in southwest China, where Crown has a plant under construction.
Crown's strategy is winning plaudits from analysts. "It looks like Crown's expansion strategy into emerging markets is paying off nicely," said Kim Nolland, director of high-yield research at Gimme Credit, a bond research firm.
Nolland's comment came after Crown reported solid second-quarter earnings in July.
Also in response to the company's second-quarter earnings, J.P. Morgan analyst Phil Gresh said in a report to investors that Crown is his top pick among the packaging companies he covers.
"By 2013, Crown should be on track to gain five-10 points of market share in key emerging markets, such as Brazil and China, along with its dominant share in the Middle East and [Southeast] Asia, all of which should drive higher long-term earning power," Gresh wrote.
(c)2011 The Philadelphia Inquirer