The Barnsley business, to be renamed Redfearn Glass, is a major glass packaging producer for the food, drink and pharmaceutical sectors, employs 700 and had a 2004 operating profit of £3m on sales of £101m.
Rexam ceo Lars Emilson says: "The UK glass market is facing a difficult outlook and new capacity coming on stream will only exacerbate the situation. After reviewing our options we felt that, as the number three player in the UK glass industry, divestment in this case was the best course of action."
Emilson added that Rexam, which operates 13 mainland European glass packaging plants, remained "fully committed' to its glass customers and glass container business.
Many observers believe the sale is linked to an ongoing battle, to which Emilson was clearly referring, between Rockware Glass and Irish rival Quinn Glass (Packaging Today – April). Ardagh subsidiary Rockware has been battling for months to stop Quinn commencing operations this summer at what is believed to be Europe's biggest glass bottle factory, in Elton near Chester. It has consistently argued that the factory, significantly larger than Quinn originally proposed, will exacerbate UK overcapacity for glass packaging and could cost thousands of jobs in Yorkshire, where Rockware, Rexam Glass, Allied Glass, Beatson Clark and Stolzle Flaconnage all have plants.
Rockware also claims Quinn's plans for the larger plant have never faced proper planning scrutiny. In fact a second planning application, for a 1.5m sq ft factory in place of the 1.25m sq ft facility originally proposed, was due before Chester City Council planners on March 3, but was "called in" for public enquiry just days before. The enquiry is scheduled for September.
Quinn, which said in March it was "at a loss to understand the reasons for the call-in", has the Integrated Pollution Prevention Control (IPPC) licence necessary to enable it to begin operating the Elton plant and has recently started small-scale production. This is despite Rockware claims that the factory's air-fired furnace contravenes IPPC legislation and the public enquiry being pending. The hi-tech plant will eventually employ 550.
Rockware already operates sizeable plants at Knottingley and Wheatley, producing glass packaging for the beers and spirits and food, dairy and soft drinks sectors respectively, a factory in Irvine, Ayrshire producing spirits bottles, and a fourth plant in Worksop making a variety of glass packaging. In total these employ 1,080. Ardagh also owns glass businesses in Germany, Poland and Italy.
Rockware is "confident the combination of the Rockware and Barnsley businesses will lead to further quality improvements and efficiency gains, thereby creating a stronger business better able to compete in an already competitive UK market". Marketing manager Sharon Crayton adds: "It is very much business as usual for the Barnsley operation."
