Asia can make difference for Crown in 2007

By Neil Merrett

- Last updated on GMT

Related tags Net sales Ho chi minh

Continued expansion in Asia and a 12.4 per cent rise in
sales were the key highlights during the
first quarter 2007 for international packaging group Crown.

The company reported that gross profit over the first three months of this year was up 14.5 per cent to $213m (€156m) from $186m (€136m) over the same period last year, with net sales reaching $1.7bn (€1.2bn), a 12.4 per cent rise.

Higher sales unit volumes, the pass-through of higher raw material costs, and the benefits from positive foreign currency exchange rates boosted revenues, the company said.

John Conway, Crown's chief executive officer, said that the company hoped to capitalise in the future by meeting the growing demand for packaging in Asia's emerging markets, bringing the supply closer to buyers.

"We believe that these are fast growing markets with long-term potential and we are pleased to be growing with our customers there," he stated.

The company's strategy in the region has been to increase its capacity for beverage can production in Asia.

During the quarter the company opened a second beverage can production line at its plant in Ho Chi Minh City, Vietnam.

Crown plans further expansion in the region during this year.

Conway added that Crown was also in the process of constructing a new beverage can plant in Cambodia to capitalise on demand there.

Crown's strategy of moving into new markets was buoyed by the resurgent performance of its core US canning operations.

Combined sales within its Americas' food and beverage segment were up for the period to $578m (€425m) from $529m (€389m) in 2006.

The performance of its operations in Europe was similarly encouraging for the company with net sales during the period of $727m (€534m), an increase of 11 per cent.

Crown was particularly encouraged by the results as a sign of successful cost reduction initiatives in Europe, and more favourable conditions in raw material supplies.

With continued measures to improve profitability in Europe, along with its expansion into Asia, the company maintained a confident outcome for the coming year.

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