Packaging giant Rexam plc will open an injection molding plant near Shanghai, China, this year as part of its plan to ``better balance'' its portfolio between metal and plastics, said recently named Chief Executive Officer Lars Emilson.
Rexam needs more capacity in China to serve customers setting up operations there, Emilson said at Packaging Strategies 2005, held March 29-31 in Atlanta. Rexam also wants to take advantage of the growing number of middle-class consumers in China.
The company is close to selecting a site for the plant, which will make cosmetics and health-care packaging, as well as closures.
The potential that Rexam sees for plastics does have a limit, however: Emilson said he isn't convinced that plastics and beer go well together.
Rexam, a large producer of metal beer cans, was a global leader in developing PET beer bottles. But Emilson, who became CEO in October, said the firm won't increase its investment in that market.
``I don't think PET is good enough for high-quality beer,'' said Emilson, who added that PET made a slight dent in the Russian beer market, but only because of its lower cost. ``Even in Russia, if they buy quality beer, they buy in cans.''
Beer in PET has not received a good response in Europe or North America, he said. In Germany, PET bottles are used only because metal cans were ``practically banned,'' he said. ``I don't think it has anything to do with people wanting beer in plastic.''
Rexam has made beer bottles from polyethylene naphthalate in Denmark, but captured no more than 4 percent of that market.
Only about 20 percent of Rexam's global sales come from plastics. Rexam had sales of £3.1 billion ($5.97 billion) last year.
Rexam plans to expand through acquisition and organic growth, and is targeting emerging markets for some of that growth.