Ball Expands Manufacturing Operations in Southeast and Northwest
During an earnings call on Tuesday, Ball Corporation announced plans to expand its manufacturing presence in the Southeast and Northwest regions through a combination of acquisition and new buildout.
One of the key moves includes the acquisition of Florida Can Manufacturing, a beverage can facility located in Winter Haven, Florida. The $160 million purchase was finalized on Tuesday morning, with CEO Dan Fisher noting that the acquisition was made at a significant discount to its replacement value.
About a year ago, Ball closed a can manufacturing facility in the Seattle area, a strategic move that it is now looking to address by building a new two-line can plant in Oregon. Fisher emphasized the company’s commitment to the Northwest marketplace and its desire to meet regional demand.
These capacity expansions are designed to support Ball’s growth trajectory and align with its customers’ plans. By localizing production, the company aims to reduce shipping costs and enhance operational efficiency.
Additionally, Ball revealed plans to explore alternatives for its underperforming aluminum cup business. The company acknowledged that the growth of this segment had not met initial expectations and hinted at a potential strategic partnership in early 2025 that could lead to a restructuring of the business.
Financially, Ball anticipates a positive impact from these strategic moves, with a projected $25 million benefit in 2025. CFO Howard Yu mentioned that this figure represents a significant improvement over the historical $40 million drag on annual earnings associated with the aluminum cup business.
Looking ahead, Ball aims to streamline its operations and optimize its portfolio, as evidenced by its decision to sell a portion of its ownership in Ball United Arab Can Manufacturing Co. in Saudi Arabia. This divestiture is expected to generate $80 million in proceeds for the company.
The aluminum cups business, initially positioned as a sustainable solution for large event venues, has faced challenges due to the impact of the COVID-19 pandemic on in-person gatherings. Despite setbacks, Ball remains committed to the growth of this segment and continues to produce cups in its facility in Rome, Georgia.
For more details on Ball’s recent financial performance and strategic initiatives, refer to the company’s quarterly earnings release.