Ceramic Industry

O-I Expands Presence in China and Southeast Asia

May 24, 2010
The acquisition provides O-I entry into the Vietnamese and Malaysian markets.

Glass packaging manufacturer Owens-Illinois, Inc. (O-I) has joined with Thailand's Berli Jucker Public Co. Ltd. (BJC) to expand O-I's presence in China and Southeast Asia. The O-I and BJC joint venture has entered into an agreement to purchase Fraser & Neave Holdings Bhd.'s Malaya Glass operations, which include plants in Sichuan Province, China; Saraburi Province, Thailand; Johor Bahru, Malaysia; and Ho Chi Minh City, Vietnam. The four Malaya Glass plants employ approximately 1900 people and produce containers for the beer, nonalcoholic beverage, and food markets. Malaya Glass’ fiscal 2009 sales were $126 million.

In the transaction, the O-I and BJC joint venture purchased Malaya Glass for $221.7 million, after consideration of debt and minority interests. O-I's portion of the purchase price was $132.4 million. Following the acquisition, the operations in Malaysia and Vietnam will be operated by a 50-50 joint venture between O-I and BJC. The acquired interest in the Chinese plant will be managed as part of O-I China's existing operations. BJC will assume majority ownership of the Thai operation.

"This acquisition is aligned with our strategic objectives to seek a leadership position in China and Southeast Asia," said Al Stroucken, O-I’s chairman and CEO. "The plant in Sichuan expands our presence in China, and the joint venture offers us an instant competitive position in the important growing markets of Vietnam and Malaysia. We expect to see an immediate positive impact on our earnings as a result of this acquisition."

"BJC is focusing our regional expansion in Southeast Asia, in particular Indochina and Malaysia," said Aswin Techajareonvikul, president of BJC. "The acquisition will further strengthen our foothold in Vietnam and Malaysia, where we today have established trading and manufacturing operations in industrial and consumer products. This is a major milestone in expanding BJC's operation in Southeast Asia."

O-I and BJC have a long history of successful collaboration. BJC licenses O-I's proprietary technology in its Thai Glass operations.

O-I Asia Pacific President Greg Ridder said the purchase of Malaya Glass complemented existing regional capabilities and provided customers access to an expanded footprint and leading glassmaking technologies.

"We are excited about the new opportunities this creates for customers," said Ridder. "We can boost the productivity and quality at these well-run operations by applying O-I's technology and know-how, and this will enhance the breadth of offerings we provide in the region. New and existing customers will benefit from this expansion."

O-I has previously announced plans to grow through strategic acquisitions and joint ventures in regions with rapidly growing markets. In March, the company announced its entrance into the Argentinean market with the acquisition of a majority share in Cristalerias Rosario.

Visit www.o-i.com for more information.

Links