The food and beverage can manufacturer also forecast that its share in the emerging markets of China, Southeast Asia, Brazil, Eastern Europe and the Middle East will continue to increase in 2010.
US-based Crown made the positive predictions as it posted a Q4 profit of $81m compared a $14m loss in the same period last year.
Commenting on the outlook for 2010, chief executive John Conway said: “Demand in our mature packaging markets of North America and Western Europe is expected to recover from 2009 levels and operating improvements and cost reductions are anticipated to continue throughout 2010. Additionally, the numerous capacity expansions we have undertaken are completed or well underway, and are expected to contribute to production and sales in 2010.”
Timothy Donahue, chief financial officer, said beverage sales in the US beverage sector had been “firm”, while food sales were better than expected although not back to record Q4 2008 levels. He added that European beverage sales had risen six per cent in the quarter, and that stronger volumes in the region had offset weaker Middle Eastern demand. European food can income in 2009, when adjusted for currency, was up 11 per cent on 2008.
Emerging Markets and takeovers
Conway outlined the firm’s ongoing strategy for expansion in emerging markets on the back of “a significant and growing middle-class possessed of sufficient disposable income to enjoy the benefits that our packaging provides”. He forecast that growth in Crown’s operations in these regions would be “significantly higher” than the US and Europe.
“We expect our emerging markets businesses in China, Southeast Asia, Brazil, Eastern Europe and the Middle East will continue to grow,” he added.
He announced plans to double the size of the Dong Nai plant in Vietnam as part of a “major expansion” initiative in the country to meet rising demand. Crown forecast that the share of company revenues from these regions would jump from 25 per cent to 30 per cent in the near future.
The chief executive revealed the company was also looking to grow by acquisition in emerging markets.
“We are looking at acquisition opportunities in emerging markets also," said Conway. “In some cases, our market shares are so large and our presence is so large, it becomes a little bit difficult in some of the emerging markets to make acquisitions, but we are talking to a number of people as we speak in the emerging markets about opportunities and they are interested in perhaps selling.”
The company acknowledged that volumes had dropped in the Middle East in 2009 but said it was confident they would rebound in Q3 and Q4 of 2010.