Crown Holdings, Inc.
(CCK - Free Report
) divulged plans to build a new plant in the Valencia region of Spain, which will produce aluminum beverage cans to capitalize on growing demand for the same in the Iberian region. Per the company, the location is ideal to meet growing requirements of a number of key customers given its close proximity as well as the excellent local infrastructure and transportation links. It will also support the company’s other facilities during the conversion from steel to aluminum.
The new facility will be located in Parc Sagunt, approximately 10 miles north of the city of Valencia. Crown Holdings currently operates two steel beverage can plants in Spain, in Agoncillo and Seville. The plant is expected to be operational during fourth-quarter 2018. It will initially manufacture approximately 900 million units in multiple sizes on an annual basis. It will also have the scope of further expansion. In the prior stages, the capacity will be utilized to facilitate customers' transitions from steel to aluminum beverage cans. Eventually, it will support growing demand for both beer and non-alcoholic beverage cans in the region.
Crown Holdings is poised to gain from efforts to select growth opportunities through capacity additions in existing plants, new plants in existing markets and potential strategic acquisitions in geographic areas. Further, it will aided by product lines in which the company already operates or that complement existing businesses.
Year to date, Crown Holdings has outperformed the industry
. The company’s shares increased 12.2%, while the industry gained 10.0%.
Investment in Growth to Bear Fruit
The company continues to ramp production from second line at its Osmaniye, Turkey beverage plant during first-quarter fiscal 2017. This project more than doubled the facility’s beverage can capacity to 1.7 billion units. Both the production lines at the beverage can facility in Nichols, NY have started to operate. In December 2016, the company started production from its one-line beverage can plant in Monterrey, Mexico and is helping cater to the rapidly expanding demand for beer in the region. The new beverage can plant in Jakarta, Indonesia began commercial shipments, as planned in June 2017.
The company also completed the expansion of beverage can capacity in Columbia in June, to support local demand growth. The second line, with a production capability of 1 billion units at Danang, Vietnam plant is on track to start operations in the third quarter. A new beverage can plant is being built in Yangon, Myanmar that is anticipated to commence production in first-half 2018. The company is also foraying in to glass operations in Mexico by building a glass bottle facility in Chihuahua, Mexico that is slated to start production in first-half 2018. In April 2017, the company began commercial production from its second installed aluminum line that had been converted from tinplate steel in its Custines, France facility. Capital expenditure is projected to be $450 million in 2017.
Zacks Rank & Key Picks
Crown Holdings currently carries a Zacks Rank #3 (Hold).
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