Drinks can maker Rexam braced for £45 million commodity price rise

Will Green is news editor of Supply Management
13 November 2014

Drinks can manufacturer Rexam has warned if a rise in aluminium prices is sustained it could generate an extra £30 million in costs for the company.

In an interim management statement for the third quarter of 2014, the firm said aluminium prices had risen to $500 per tonne.

“If this level were to be sustained, it would represent an additional cost of some £30 million for next year versus 2014,” said the statement.

Rexam, who provide cans for Coca-Cola, Pepsi and Heineken, also said manufacturing costs in its Brazil operation were predicted to be hit by higher energy prices.

“Brazilian energy costs are expected to increase by £15 million in 2015 as unprecedented drought has raised the cost of hydroelectric power,” said the company.

Despite the cost risks, Rexam said its financial position was unchanged from the mid-point of 2014 and overall global can volumes were up 4 per cent for the third quarter.

Chief executive Graham Chipchase said overall performance was “in line with our plans”. “As ever, we will focus on tight cost management and the elements of our business that we know we can control,” he said.

 

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