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Ardagh's glass shipments down 20% due to destocking

Post Time:Feb 29,2024Classify:Industry NewsView:965

Revenue from Ardagh Glass Packaging's operations fell due to a decline in demand.

The container glass manufacturer said revenue fell to $1.08 billion, down 6% compared to the same period last year, it said in a financial note.

Total glass shipments for the quarter were 20% below year-ago levels.

Europe and Africa was down 24%, measured against a strong comparable last year with North America lower by 13%.

Ardagh Group chairman Hermanus Troskie said: “During the quarter, we saw continued destocking by our customers as they responded to weaker consumer demand.

"It also reflected their focus on unwinding inventories as supply chain pressures eased.

“This was felt particularly in Europe as 2022 fears over energy security subsided.

“In our North America business, destocking was exacerbated by disruption to a major beer brand from April 2023 onwards.

“In response to weaker customer demand, we reduced fourth-quarter global production by almost 50%, ensuring that we entered 2024 with appropriate inventories.”

Its African glass packaging business, formerly Consol, performed well in the quarter, and finished the year ahead of expectations, but below levels expected at the beginning of the year.

He said: “We remain positive on medium- to long-term prospects for glass consumption in Africa, and our significant investment in new capacity over the past two years positions us to service this growth opportunity.”

The North American glass market was also impacted by general destocking in 2023 across most of its end markets, although to a lesser extent than in Europe.

In response, it closed two production facilities during the third quarter with unaffected business transferred to other parts of its network.

“We also took continued downtime in the fourth quarter. As in Europe, we expect to see destocking by our customers in North America complete in the first half of 2024,” he said.

He welcomed a recent determination by the U.S. International Trade Commission to proceed with its investigation of imports of glass to serve the wine sector from certain countries on the basis that there is a reasonable indication of harm to the US glass packaging industry.

He added: “In summary, we believe the fundamental outlook for glass packaging in Europe and Africa has not changed.

“We expect to see a gradual recovery in consumption patterns begin in 2024, with lower packaging input costs affording the opportunity for customers to shift to a more balanced mix of volume and price growth.”

Source: https://www.glass-international.com/Author: shangyi

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