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Ball Corp (BLL) to Build Plants in UK & Russia to Meet Demand

·3 min read

Ball Corporation BLL announced that it is planning to build beverage can manufacturing facilities with cutting-edge technology, in the U.K. and Russia — another step in its endeavor to increase capacity to meet the growing demand for beverage cans. The facilities that are anticipated to become operational in 2023, are expected to produce billions of cans a year across a range of formats and sizes.

Ball Corp intends to build a plant at the SEGRO Park Kettering Gateway, an established industrial development in Northamptonshire. The plant is expected to break ground this year and will supply cans for domestic customers in a growing range of categories, which includes hard seltzers, wines, ready to drink cocktails, together with pure and enhanced water brands. It will be the company’s third beverage can manufacturing facility in the U.K. In Western Russia, the plant will be built in Ulyanovsk that will help serve the fast-growing Russian market, particularly the beer and energy drinks categories. This will take Ball Corp’s tally of manufacturing plants in Russia to four.

The can industry has been witnessing unprecedented demand over the past few years as customers now prefer cans over plastic owing to increasing awareness about environmental problems. Changing lifestyle choices, population growth and increasing disposable income have led to this shift. An estimated 75% of new beverage product launches are now in cans. Aluminium cans are the most widely recycled beverage packaging option, with an 82% recycling rate in the U.K. and 76% across Europe. The COVID-19 pandemic provided a boost to the beverage can industry as customers are opting to buy multiple packs of beverages and packaged products that can be consumed on-the-go. The Global Beverage Can Market is expected to grow by $3.50 billion during 2021-2025, witnessing a CAGR of about 2% during the period.

To capitalize on this demand, Ball Corp has been investing significantly in projects across North America, South America and EMEA, which are expected to add at least 25 billion units of contracted beverage can capacity by end of 2023 (off a 2019 base of 100 billion units). The company has been delivering strong growth in its top and bottom line over the past few quarters courtesy of the solid global beverage-can demand. The company’s constant focus on launching new products and efforts to cut down costs will continue to aid results. Robust backlog levels and business wins will continue to drive Ball Corp's Aerospace segment.

Share Price Performance

Zacks Investment Research
Zacks Investment Research

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The company’s shares have appreciated 21.8% over the past year compared with the industry’s rally of 30.6%.

Zacks Rank & Stocks to Consider

Ball Corp currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Industrial Products sector are Greif, Inc. GEF, Lindsay Corporation LNN and Pentair plc PNR. All of these stocks sport a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Greif has an anticipated earnings growth rate of 47.2% for fiscal 2021. The company’s shares have gained around 61% over the past year.

Lindsay has an estimated earnings growth rate of 1% for the ongoing fiscal year. Over the past year, the company’s shares have rallied 64%.

Pentair has a projected earnings growth rate of 26% for the current year. The stock has appreciated around 68% in a year.

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