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    Presentation Abralatas Presentation Abralatas Presentation Transcript

    • Aluminum beverage can:
      competition and sustainability
      Renault de Freitas CastroExecutive Director
      Abralatas
      São Paulo - SP
      Aluminium Latin America Conference
      Aug 19th, 2011
    • Abralatas is the trade association of the Brazilian aluminum beverage can manufacturing industry
      Key Issues
      Provide congressional andadministrativerepresentationoftheindustry;
      Promotion and communication of relevant information concerning the industry;
      Addressandadvocateissuesof common concern.
    • Abralatas – Member Companies
      Canmakers
      Suppliers
    • The Aluminum Can in Brazil
      1989 – 2003
      • Firsttwo-piececanmaker: Latasa, Oct. 1989 (participationof Reynolds);
      • Arrivalof Crown (1996), American NationalCan (ANC) (1996) and Latapack-Ball (1997);
      • Rexam buys ANC (2000) and Latasa (2003);
      • Sales reach 10 billioncans/year benchmark (2002);
      • Recyclinggrowsalongwithsalesandbecomes popular.
      Firstaluminumcanproduced in Brazil
    • The Aluminum Can in Brazil
      2010
      • Increaseofincomeandemployment in Brazilraisesconsumption, contrary to internationaltrends: 30 million new class C consumers;
      • Unpredicteddemandgrowthrequirestemporaryimportsofaluminumcanstocomplementdomesticsupply (10% ofannualsales);
      • Aluminumcanmakersannounce heavy investmentprogramofUS$ 765 million(R$ 1,3 billion) to raiseproductioncapacity in 64%(16,8 billion/yr in 2009 to27,5 billion/yruntilJun. 2012).
      Firstaluminumcanproduced in Brazil
    • The Aluminum Can in Brazil
      2004 – 2009
      • Recycling rate over 90% (98.2% record in 2009);
      • Canmakersinvested over US$ 150 million in 2009 despiteinternationalfinancial crisis;
      • Start ups in 2009: Crown’s new plant in Estância-SE; Latapack-Ball’s new plant in Três Rios-RJ andRexam’sadditionalline in Jacareí-SP;
      • Double surprise: beveragedemand shows onlyslightdecreaseduringcrisisandgrowssharplyafter 4Q 2009;
      • Despitecrisis, 2009 canshipmentsincrease 11.7% over 2008.
      Firstaluminumcanproduced in Brazil
    • Can industry: economic and political environment in Brazil
    • Can industry: economic and political environment
      • High levelofinterest rates (12% yr) andhugetaxation (~40% of GDP) high investmentcost;
      • Taxationstronglyconcentrated in consumptiongoods (58%) ratherthanincome (21%) andothers;
      • Unstableregulatory framework;
      • Lowefficiencyofadministrationandlackofinfrastructure (high transactioncosts).
    • Can industry: economic and political environment
      Beveragemarket
      • Structuralconcentrationofbothdowstreamandupstreamindustrysmallbargainingpower for canmakers;
      • Consumerpreferencefavourstraditional 600 ml retglassbottles (beer) andcheaper PET owbottles (CSD).
    • Can industry: economic and political environment
      • Relatively small per capitaconsumptionof:
      • beer (BR = 60 literspc; US = 90 literspc) and
      cannedbeverages(BR = 90; US = 350);
      • Newandtougherdrink-drivelaw:
      • good for can: increaseofbeerconsumptionat home;
      • newbrandsandbeveragesintroduced in 16oz can;
      • Badweather, taxraiseandbeveragepriceincreaseduringfirsthalfof 2011 cools downbeveragedemand;
      • Fallofexpected performance ofthecan in 2011 to 6%.
      Beverage market
    • Main chalenges
    • Overall goal:
      Qualifythealuminumcan as thebest container for a lowcarboneconomy!
    • Main challenges
      • Keepfair trade in downstreamandupstreammarkets;
      • Atract new can stock producertoBrazil;
      • Reducecan stock importtax (12%);
      • Preventcollectionandrecyclingcostincrease; foster curbside recycling programs nationwide (2010 SolidWastePolicyLaw);
      • Reduce electricity costs as a means to increase investment in aluminum production;
    • Main challenges
      • Equalize taxburdenofallpackagings (taxneutrality);
      • Increasealuminumcanshareof total beveragepackagingmarket (2010 recordof20%, in average, 38% for beerand 8% for non-alcoholicbeverages);
      • Estimulatefiller’sinterest in reducingtheircarbonfootprintbyincreasingaluminumcanshare in packagingmix.
    • 98.2%
      100%
      93.4%
      90%
      92.0%
      80%
      70%
      63.1%
      60%
      57.4%
      50%
      40%
      Brazil
      Japan
      30%
      Argentina
      20%
      USA
      Europe
      10%
      0%
      1991
      1992
      1993
      1994
      1995
      1996
      1997
      1998
      1999
      2000
      2001
      2002
      2003
      2004
      2005
      2006
      2007
      2008
      2009
      AluminumCanRecycling Rate1991-2009%
      *Source: Abralatas; ABAL; The JapanAluminumCanRecyclingAssociation;Cámara Argentina de la Industria delAluminio y Metales Afines; The AluminumAssociationandEAA - EuropeanAluminiumAssociation.
    • Brazil. Recycling rate; CSD andbeermarketsharebypackaging2009%
      *Source: Abralatas/Abal, AbividroandAbipet.
    • The major challenge
      • Requirements for a low carbon economy:
      • environmental awareness of society;
      • full consideration of externalities in the cost of goods;
      • The “invisible hand” needs help to reach externalities:
      • market price mechanism will only reflect externalities with law enforcement (penalties or incentives);
      • taxation systems must also influence market forces in favor of green products;
      • The concept of economic efficiency must incorporate environmental efficiency.
    • The major challenge
      • Increase the importance of eco-efficiency as an element of the competition between products:
      • More investment in the production of green goods;
      • More innovation.
    • Brazilian aluminum can industry in figures
    • Brazil. Aluminum industry
      The relative importance of the can 1,000 t and %
      Aluminum Scrap Recovered (2009)
      Total aluminum consumption (2009)
      Packagings 30.8%
      Cans
      Others
      Cans
      6.1%
      24.6%
      69.3%
      * Source: Abralatas/ABAL. Preparation: Abralatas
    • Brazil. Aluminumcanplantsevolution
      2012
      20 plants
      • Águas Claras (RS)
      • Jacareí (SP) : 2 un.
      • Cabreúva (SP)
      • Santa Cruz (RJ)
      • Extrema (MG)
      • Gama (DF)
      • Cuiabá (MT)
      • Manaus (AM) : 3 un. (1 underconstruction).
      • Recife (PE) : 2 un.
      • Simões Filho (BA)
      • Estância (SE)
      • Três Rios (RJ)
      • Ponta Grossa (PR)
      • Alagoinhas (BA) (underconstruction)
      • Pouso Alegre (MG)
      • Belem (PA) : 2 un. (underconstruction)
      2008/2009
      15 plants
      • Águas Claras (RS)
      • Jacareí (SP) : 2 un.
      • Cabreúva (SP)
      • Santa Cruz (RJ)
      • Extrema (MG)
      • Gama (DF)
      • Cuiabá (MT)
      • Manaus (AM) : 2 un.
      • Recife (PE) : 2 un.
      • Simões Filho (BA)
      • Estância (SE)
      • Três Rios (RJ)
      2003
      11 plants
      • Águas Claras (RS)
      • Jacareí (SP) : 2 un.
      • Cabreúva (SP)
      • Santa Cruz (RJ)
      • Extrema (MG)
      • Gama (DF)
      • Aracajú (SE)
      • Recife (PE) : 2 un.
      • Simões Filho (BA)
      2010/2011
      18 plants
      • Águas Claras (RS)
      • Jacareí (SP) : 2 un.
      • Cabreúva (SP)
      • Santa Cruz (RJ)
      • Extrema (MG)
      • Gama (DF)
      • Cuiabá (MT)
      • Manaus (AM) : 3 un. (1 underconstruction).
      • Recife (PE) : 2 un.
      • Simões Filho (BA)
      • Estância (SE)
      • Três Rios (RJ)
      • Ponta Grossa (PR)
      • Alagoinhas (BA) (underconstruction)
      • Pouso Alegre (MG)
      1997
      10 plants
      • Pouso Alegre (MG)
      • Extrema (MG)
      • Jacareí (SP) : 2un.
      • Simões Filho (BA)
      • Cabreúva (SP)
      • Aracajú (SE)
      • Recife (PE) : 2un.
      • Santa Cruz (RJ)
      1990
      1 plant
      • Pouso Alegre (MG)
      Source: Abralatas
    • Brazil. Aluminumcanproductionandproductioncapacity - 1997-2011millioncans
      * Estimate2011 and 2012. Source: Abralatas
    • 90,0%
      20,000
      18,798
      80,0%
      17.406
      18,000
      77.0%
      70,0%
      16,000
      67.7%
      14.811
      63.3%
      63.2%
      60,0%
      14,000
      13.260
      12.254
      50,0%
      12,000
      10.218
      10.749
      40,0%
      10.154
      8.625
      9.769
      9.450
      9.361
      35.4%
      10,000
      9.260
      31.7%
      30,0%
      8.259
      24.9%
      8,000
      17.5%
      14.0%
      20,0%
      6.547
      14.4%
      6,000
      11.7%
      11.2%
      10,0%
      10.0%
      8.2%
      7.4%
      4.008
      8.0%
      4.4%
      4,000
      1.1%
      0.6%
      2.961
      0,0%
      0.0%
      -
      4.2%
      1.673
      1.340
      2,000
      -
      9.4%
      -10,0%
      821
      738
      440
      -20,0%
      ,000
      1990
      1991
      1992
      1993
      1994
      1995
      1996
      1997
      1998
      1999
      2000
      2001
      2002
      2003
      2004
      2005
      2006
      2007
      2008
      2009
      2010
      2011*
      Aluminumcanshipments
      Brazil. Aluminumcanshipments1990 - 2010millioncans
      *Estimate 2011. Source: Abralatas
    • Brazil. Beverage Market SharebyFillerDez10/Jan11 (%)
      CSD
      Beer
      Source: AC/Nielsen. Preparation: Abralatas
    • Brazil. Aluminumcanshipments by typeofbeverage
      1997 and2010(%)
      Beer
      CSD
      Others
      Source: Abralatas
    • Brazil. Consumptionofbeerand CSD1997 - 2010millionliters
      Source: 1997 to 2008 – ABIR and Sindicerv ; 2009 and 2010 – Article published in the journal Estado de São Paulo in March 5, 2010.
      * Estimated growth of 7.5% for beer and 7% for CSD.
    • Brazil. CSD market share by packaging
      2005-2010(%)
      Source: AC/Nielsen. Preparation: Abralatas.
    • Brazil. Beer market share by packaging
      2005-2010(%)
      Source: AC/Nielsen. Preparation: Abralatas.
    • Brazil. CSD andbeermarketsharebypackaging
      2005-2010(%)
      Source: AC/Nielsen. Preparation: Abralatas.
    • Brazil: AluminumcanmarketsharebydistributionchannelDec04/Jan05;Dec10/Jan11 (%)
      CSD
      Beer
      Dec04/Jan05
      Dec10/Jan11
      Self Service
      Traditional
      Bar
      Source: AC/Nielsen. Preparation: Abralatas.
    • Thank you!renault.castro@abralatas.org.br