O-I and Constellation Brands Enter into Joint Venture and Long-Term Supply Agreement
19 December 2014
December 19 2014
O-I and Constellation Brands Enter into Joint Venture and Long-Term Supply Agreement
Owens-Illinois, Inc. announced today that it has completed the formation of a 50-50 joint venture with Constellation Brands (STZ) to own and operate a glass container production plant in Nava, Mexico. In October the companies announced their intent to form the partnership, which was subject to regulatory approval. Approvals from the Mexican Federal Competition Commission and the U.S. Department of Justice have been received.
The joint venture will operate the glass container production plant in Nava that it recently purchased from Anheuser-Busch InBev (ABI). The plant operates under the name IVC and produces bottles exclusively for Constellation's adjacent brewery, which makes an expanding portfolio of Mexican beer brands for export to the United States, including Corona Extra, Corona Light, Modelo Especial, Negra Modelo and Pacifico. The state-of-the-art plant employs about 250 people and first began operating in February 2014.
To accommodate Constellation's current and growing need for glass bottles, the joint venture will expand the capacity of the plant from one to four furnaces over the next three to four years. A team of engineering and manufacturing experts has already begun working on the expansion. In a related matter, O-I signed a long-term supply agreement with Constellation to supply additional bottles to the brewery. Supply under the agreement begins in late 2015, ramping up significantly in the following year.
"This is an exciting and promising venture for us," said Chairman and CEO Al Stroucken. "We are pleased to support Constellation's growth in a way that allows both partners to optimize their expertise and capabilities. Through the joint venture and the long term supply agreement, we can participate in the outstanding growth these brands are experiencing in the U.S."
For more information, contact:
David Johnson
Vice President, Investor Relations
Perrysburg, Ohio, US
567 336 2600
dave.johnson@o-i.com
Lisa Babington
Director, Corporate Communications
Perrysburg, Ohio, US
567 336 1445
lisa.babington@o-i.com
