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Ball Corp (BLL) Cuts Plants Operations in Russia, Plans to Exit

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Ball Corporation has decided to reduce operations immediately at its three manufacturing plants in Russia while evaluating the option of selling its Russian business. Previously, BLL announced the suspension of future investments in the country. These moves support the ongoing conflict and humanitarian crisis in Ukraine amid Russia’s invasion.

Ball Corporation has been operating three manufacturing facilities in Russia since the 1990s. The company’s Russian business generated 4% of its total net sales and 8% of total comparable operating earnings in 2021. Additionally, its beverage can plants in Russia produced approximately 5% of BLL’s global beverage can unit shipments volume of 112.5 billion during 2021.

The Ball Foundation has contributed $250,000 to Global Giving to provide aid and assistance to impacted refugees in Ukraine.  Moreover, Ball Corporation’s employee matching gifts program is helping multiple aid relief efforts in Ukraine, while many of its beverage and aerosol packaging EMEA employees are working to provide additional support to refugees.

Ball Corporation is poised to gain from the growing preference for cans over plastic, owing to increasing awareness of environmental problems. The company has been increasing its production capacity to capitalize on this demand trend. BLL delivered on its target to end 2021 with 12 billion units of new installed capacity and expects to end this year with another 12 billion units of new installed capacity. It is on track to add at least 25 billion units of capacity by 2023 end. The company also expects its infinitely recyclable aluminum cup business to deliver profits starting from late 2022. Apart from these, the Aerospace segment’s robust backlog levels and business wins continue to aid the company.

Since the invasion of Ukraine started, various companies have pulled business out of Russia due to strict western sanctions against the country. Among other industrial companies, a major agricultural equipment manufacturer, Deere & Company (DE - Free Report) , halted shipments to Russia and Belarus. Deere has had a presence in Russia since 1973 with a manufacturing and parts distribution facility in the south of Moscow. The John Deere Foundation has been working directly with a number of organizations, including multiple UN agencies, in mobilizing resources to support Ukrainians affected by the crisis. DE currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Construction and mining equipment manufacturing giant Caterpillar Inc. (CAT - Free Report) decided to suspend operations in its manufacturing facilities in Russia. The company stated that operations in Russia have become increasingly challenging, including supply chain disruptions and sanctions. Caterpillar Foundation is donating more than $1 million to support both the urgent and long-term needs of the Ukraine humanitarian crisis. Caterpillar currently carries a Zacks Rank #3 (Hold).

Rockwell Automation, Inc. (ROK - Free Report) , a global leader in industrial automation and digital transformation, suspended operations and sales in Russia and Belarus. Sales to Russia and Belarus account for less than 0.5% of Rockwell’s total revenues.

Rockwell, a Zacks Rank #3 stock, has contributed financially to Project HOPE to provide relief to refugees in Ukraine and neighboring countries. The company will match employee donations made to Project HOPE and is offering paid time off to support local volunteer efforts.

Johnson Controls International is suspending business in Russia. However, it clarified that it would fulfill existing contractual obligations to the extent possible and fully comply with sanctions and will not accept new business or orders. Johnson Controls currently carries a Zacks Rank #3.

Price Performance

The company’s shares have appreciated 10.4% over the past year compared with the industry’s rally of 15.9%.

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Ball Corporation currently carries a Zacks Rank #3.

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