“We've consistently led the European glass industry in the usage of recycled glass, which now accounts for approximately 75% of our batch input mix,” said Paul Coulson, CEO, Ardagh Group.
Sustainable packaging materials
“This has reduced energy consumption, benefited furnace performance and underpinned our products' appeal to our customers.
“In the same way, we're working on improving and increasing the use of recycled materials in our Glass Packaging business in North America.”
Ardagh Group reported revenue of $2,347m increased by 6% and 1% on a reported and constant currency basis respectively in its Q2 2018 results. Adjusted EBITDA of $392m, declined by 6%, primarily driven by Glass Packaging North America and group volume/mix declined by 1% in the quarter and increased by 1% in the half year to June 30.
Coulson said it had noted an increasing focus and engagement of consumers on environmentally friendly and sustainable packaging materials.
“We continue to work with customers on initiatives such as down-gauging in Metal and light-weighting in Glass,” he added, “And we are focused on delivering quality premium products in both metal and glass that offer our customers brand differentiation and enhancements and a means to generate incremental returns.”
During the conference call, Kyle White, equity research associate, Deutsche Bank, asked if the company had seen increased discussions from its customers or potentially new customers that want to shed away from plastic into metal and glass but Coulson said it was still early days to see any impact yet on moving to more sustainable substrates away from plastic.
US versus Europe
“People are coming to grips with pressure from consumers but we certainly haven't seen any material effects of these yet, but these things take time. It takes a long time for that to happen,” added Coulson.
“But we have seen and noticed the increased sensitivity to this whole issue, both in the US and in Europe.”
Christina Hwang, MD, Angelo, Gordon & Co. responded to the fact Ardagh is using 70% recycled glass in Europe and asked what is the percentage of recycled glass usage in North America.
“It's a little bit more than half in North America,” said Coulson.
“The industry levels are not as developed in terms of collection and the supply chain there. But we do look at many initiatives to improve it because there are environmental benefits for this also, more energy-efficient for our own operations and it's less wearing on furnaces.
“But at the moment, it's a bit more than half in North America versus the European levels.
“We'd like to increase it. It's not something immediate. There are deficiencies in the collection system relative to Europe.”