OI had a stint with the plastic industry and provided plastic containers and covers for the healthcare industry. The plastic business accounted for about 10% of its business. It sold that stake to Rexam in 2008. The main reasons were to focus on its core glass business and reduce debt. With plastics becoming the future of the bottle industry and the alcoholic beverage industry declining there is a great need for OI to cultural accept plastics and move slowly into that space since they already have a large presence in the glass industry worldwide.
North America, Western Europe and Australasia are the saturated markets for beverage packaging because of the global financial crisis, and lack strong consumption growth opportunities. Product category segmentation and packaging innovation strategies are used to stimulate beverage packaging growth.
North America declined by 0.6% in regional beverage packaging growth with Asia Pacific and Latin America increasing by 7.5% and 4.4% respectively from 2008-2009.
Overall, North America packaging demand to 2013 will be static, as the marked change in carbonates consumption and weak US economy exert important influence on the long-term outlook for all beverage packaging formats.
Because of these reasons it makes business sense for OI to build or acquire manufacturing plants in Latin America or Asia in order to take advantage of the good economic forecasts for the plastic packaging industry. It will also be cost effective because of cheaper labor and logistics since the majority of the market will be saturated in those regions.
PET bottles have gained share in the total rigid plastic packaging market in the review period, up from 65% in 2009 to 68% in 2014, mainly because of its increasingly wide application in varied industries, including beverages, beauty and personal care, home care and packaged food,…