Presentation Abralatas

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Presentation Abralatas

  1. 1. Aluminum beverage can: <br />competition and sustainability<br />Renault de Freitas CastroExecutive Director<br />Abralatas<br />São Paulo - SP<br />Aluminium Latin America Conference<br />Aug 19th, 2011<br />
  2. 2. Abralatas is the trade association of the Brazilian aluminum beverage can manufacturing industry<br />Key Issues<br />Provide congressional andadministrativerepresentationoftheindustry; <br />Promotion and communication of relevant information concerning the industry;<br />Addressandadvocateissuesof common concern.<br />
  3. 3. Abralatas – Member Companies<br />Canmakers<br />Suppliers<br />
  4. 4. The Aluminum Can in Brazil<br />1989 – 2003<br /><ul><li>Firsttwo-piececanmaker: Latasa, Oct. 1989 (participationof Reynolds);
  5. 5. Arrivalof Crown (1996), American NationalCan (ANC) (1996) and Latapack-Ball (1997);
  6. 6. Rexam buys ANC (2000) and Latasa (2003);
  7. 7. Sales reach 10 billioncans/year benchmark (2002);
  8. 8. Recyclinggrowsalongwithsalesandbecomes popular.</li></ul>Firstaluminumcanproduced in Brazil<br />
  9. 9. The Aluminum Can in Brazil<br />2010<br /><ul><li>Increaseofincomeandemployment in Brazilraisesconsumption, contrary to internationaltrends: 30 million new class C consumers;
  10. 10. Unpredicteddemandgrowthrequirestemporaryimportsofaluminumcanstocomplementdomesticsupply (10% ofannualsales);
  11. 11. Aluminumcanmakersannounce heavy investmentprogramofUS$ 765 million(R$ 1,3 billion) to raiseproductioncapacity in 64%(16,8 billion/yr in 2009 to27,5 billion/yruntilJun. 2012).</li></ul>Firstaluminumcanproduced in Brazil<br />
  12. 12. The Aluminum Can in Brazil<br />2004 – 2009<br /><ul><li>Recycling rate over 90% (98.2% record in 2009);
  13. 13. Canmakersinvested over US$ 150 million in 2009 despiteinternationalfinancial crisis;
  14. 14. 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;
  15. 15. Double surprise: beveragedemand shows onlyslightdecreaseduringcrisisandgrowssharplyafter 4Q 2009;
  16. 16. Despitecrisis, 2009 canshipmentsincrease 11.7% over 2008.</li></ul>Firstaluminumcanproduced in Brazil<br />
  17. 17. Can industry: economic and political environment in Brazil<br />
  18. 18. Can industry: economic and political environment <br /><ul><li> High levelofinterest rates (12% yr) andhugetaxation (~40% of GDP) high investmentcost;
  19. 19. Taxationstronglyconcentrated in consumptiongoods (58%) ratherthanincome (21%) andothers;
  20. 20. Unstableregulatory framework;
  21. 21. Lowefficiencyofadministrationandlackofinfrastructure (high transactioncosts).</li></li></ul><li>Can industry: economic and political environment <br />Beveragemarket<br /><ul><li>Structuralconcentrationofbothdowstreamandupstreamindustrysmallbargainingpower for canmakers;
  22. 22. Consumerpreferencefavourstraditional 600 ml retglassbottles (beer) andcheaper PET owbottles (CSD).</li></li></ul><li>Can industry: economic and political environment <br /><ul><li>Relatively small per capitaconsumptionof:
  23. 23. beer (BR = 60 literspc; US = 90 literspc) and</li></ul>cannedbeverages(BR = 90; US = 350);<br /><ul><li>Newandtougherdrink-drivelaw:
  24. 24. good for can: increaseofbeerconsumptionat home;
  25. 25. newbrandsandbeveragesintroduced in 16oz can;
  26. 26. Badweather, taxraiseandbeveragepriceincreaseduringfirsthalfof 2011 cools downbeveragedemand;
  27. 27. Fallofexpected performance ofthecan in 2011 to 6%.</li></ul>Beverage market<br />
  28. 28. Main chalenges<br />
  29. 29. Overall goal:<br />Qualifythealuminumcan as thebest container for a lowcarboneconomy!<br />
  30. 30. Main challenges<br /><ul><li>Keepfair trade in downstreamandupstreammarkets;
  31. 31. Atract new can stock producertoBrazil;
  32. 32. Reducecan stock importtax (12%);
  33. 33. Preventcollectionandrecyclingcostincrease; foster curbside recycling programs nationwide (2010 SolidWastePolicyLaw);
  34. 34. Reduce electricity costs as a means to increase investment in aluminum production;</li></li></ul><li>Main challenges<br /><ul><li>Equalize taxburdenofallpackagings (taxneutrality);
  35. 35. Increasealuminumcanshareof total beveragepackagingmarket (2010 recordof20%, in average, 38% for beerand 8% for non-alcoholicbeverages);
  36. 36. Estimulatefiller’sinterest in reducingtheircarbonfootprintbyincreasingaluminumcanshare in packagingmix.</li></li></ul><li>98.2%<br />100%<br />93.4%<br />90%<br />92.0%<br />80%<br />70%<br />63.1%<br />60%<br />57.4%<br />50%<br />40%<br />Brazil<br />Japan<br />30%<br />Argentina<br />20%<br />USA<br />Europe<br />10%<br />0%<br />1991<br />1992<br />1993<br />1994<br />1995<br />1996<br />1997<br />1998<br />1999<br />2000<br />2001<br />2002<br />2003<br />2004<br />2005<br />2006<br />2007<br />2008<br />2009<br />AluminumCanRecycling Rate1991-2009%<br />*Source: Abralatas; ABAL; The JapanAluminumCanRecyclingAssociation;Cámara Argentina de la Industria delAluminio y Metales Afines; The AluminumAssociationandEAA - EuropeanAluminiumAssociation.<br />
  37. 37. Brazil. Recycling rate; CSD andbeermarketsharebypackaging2009%<br />*Source: Abralatas/Abal, AbividroandAbipet. <br />
  38. 38. The major challenge<br /><ul><li>Requirements for a low carbon economy:
  39. 39. environmental awareness of society;
  40. 40. full consideration of externalities in the cost of goods;
  41. 41. The “invisible hand” needs help to reach externalities:
  42. 42. market price mechanism will only reflect externalities with law enforcement (penalties or incentives);
  43. 43. taxation systems must also influence market forces in favor of green products;
  44. 44. The concept of economic efficiency must incorporate environmental efficiency.</li></li></ul><li>The major challenge<br /><ul><li>Increase the importance of eco-efficiency as an element of the competition between products:
  45. 45. More investment in the production of green goods;
  46. 46. More innovation.</li></li></ul><li>Brazilian aluminum can industry in figures<br />
  47. 47. Brazil. Aluminum industry <br />The relative importance of the can 1,000 t and %<br />Aluminum Scrap Recovered (2009)<br />Total aluminum consumption (2009)<br />Packagings 30.8%<br />Cans<br />Others<br />Cans<br />6.1%<br />24.6%<br />69.3%<br />* Source: Abralatas/ABAL. Preparation: Abralatas<br />
  48. 48. Brazil. Aluminumcanplantsevolution<br />2012 <br />20 plants<br /><ul><li> Águas Claras (RS)
  49. 49. Jacareí (SP) : 2 un.
  50. 50. Cabreúva (SP)
  51. 51. Santa Cruz (RJ)
  52. 52. Extrema (MG)
  53. 53. Gama (DF)
  54. 54. Cuiabá (MT)
  55. 55. Manaus (AM) : 3 un. (1 underconstruction).
  56. 56. Recife (PE) : 2 un.
  57. 57. Simões Filho (BA)
  58. 58. Estância (SE)
  59. 59. Três Rios (RJ)
  60. 60. Ponta Grossa (PR)
  61. 61. Alagoinhas (BA) (underconstruction)
  62. 62. Pouso Alegre (MG)
  63. 63. Belem (PA) : 2 un. (underconstruction)</li></ul>2008/2009 <br />15 plants<br /><ul><li> Águas Claras (RS)
  64. 64. Jacareí (SP) : 2 un.
  65. 65. Cabreúva (SP)
  66. 66. Santa Cruz (RJ)
  67. 67. Extrema (MG)
  68. 68. Gama (DF)
  69. 69. Cuiabá (MT)
  70. 70. Manaus (AM) : 2 un.
  71. 71. Recife (PE) : 2 un.
  72. 72. Simões Filho (BA)
  73. 73. Estância (SE)
  74. 74. Três Rios (RJ)</li></ul>2003 <br />11 plants<br /><ul><li> Águas Claras (RS)
  75. 75. Jacareí (SP) : 2 un.
  76. 76. Cabreúva (SP)
  77. 77. Santa Cruz (RJ)
  78. 78. Extrema (MG)
  79. 79. Gama (DF)
  80. 80. Aracajú (SE)
  81. 81. Recife (PE) : 2 un.
  82. 82. Simões Filho (BA)</li></ul>2010/2011 <br />18 plants<br /><ul><li> Águas Claras (RS)
  83. 83. Jacareí (SP) : 2 un.
  84. 84. Cabreúva (SP)
  85. 85. Santa Cruz (RJ)
  86. 86. Extrema (MG)
  87. 87. Gama (DF)
  88. 88. Cuiabá (MT)
  89. 89. Manaus (AM) : 3 un. (1 underconstruction).
  90. 90. Recife (PE) : 2 un.
  91. 91. Simões Filho (BA)
  92. 92. Estância (SE)
  93. 93. Três Rios (RJ)
  94. 94. Ponta Grossa (PR)
  95. 95. Alagoinhas (BA) (underconstruction)
  96. 96. Pouso Alegre (MG)</li></ul>1997 <br />10 plants<br /><ul><li> Pouso Alegre (MG)
  97. 97. Extrema (MG)
  98. 98. Jacareí (SP) : 2un.
  99. 99. Simões Filho (BA)
  100. 100. Cabreúva (SP)
  101. 101. Aracajú (SE)
  102. 102. Recife (PE) : 2un.
  103. 103. Santa Cruz (RJ)</li></ul>1990 <br />1 plant<br /><ul><li> Pouso Alegre (MG)</li></ul>Source: Abralatas<br />
  104. 104. Brazil. Aluminumcanproductionandproductioncapacity - 1997-2011millioncans<br />* Estimate2011 and 2012. Source: Abralatas<br />
  105. 105. 90,0%<br />20,000<br />18,798<br />80,0%<br />17.406<br />18,000<br />77.0%<br />70,0%<br />16,000<br />67.7%<br />14.811<br />63.3%<br />63.2%<br />60,0%<br />14,000<br />13.260<br />12.254<br />50,0%<br />12,000<br />10.218<br />10.749<br />40,0%<br />10.154<br />8.625<br />9.769<br />9.450<br />9.361<br />35.4%<br />10,000<br />9.260<br />31.7%<br />30,0%<br />8.259<br />24.9%<br />8,000<br />17.5%<br />14.0%<br />20,0%<br />6.547<br />14.4%<br />6,000<br />11.7%<br />11.2%<br />10,0%<br />10.0%<br />8.2%<br />7.4%<br />4.008<br />8.0%<br />4.4%<br />4,000<br />1.1%<br />0.6%<br />2.961<br />0,0%<br />0.0%<br />-<br />4.2%<br />1.673<br />1.340<br />2,000<br />-<br />9.4%<br />-10,0%<br />821<br />738<br />440<br />-20,0%<br />,000<br />1990<br />1991<br />1992<br />1993<br />1994<br />1995<br />1996<br />1997<br />1998<br />1999<br />2000<br />2001<br />2002<br />2003<br />2004<br />2005<br />2006<br />2007<br />2008<br />2009<br />2010<br />2011*<br />Aluminumcanshipments<br />Brazil. Aluminumcanshipments1990 - 2010millioncans<br />*Estimate 2011. Source: Abralatas<br />
  106. 106. Brazil. Beverage Market SharebyFillerDez10/Jan11 (%)<br />CSD<br />Beer<br />Source: AC/Nielsen. Preparation: Abralatas<br />
  107. 107. Brazil. Aluminumcanshipments by typeofbeverage<br />1997 and2010(%)<br />Beer<br />CSD<br />Others<br />Source: Abralatas<br />
  108. 108. Brazil. Consumptionofbeerand CSD1997 - 2010millionliters<br />Source: 1997 to 2008 – ABIR and Sindicerv ; 2009 and 2010 – Article published in the journal Estado de São Paulo in March 5, 2010.<br />* Estimated growth of 7.5% for beer and 7% for CSD.<br />
  109. 109. Brazil. CSD market share by packaging <br />2005-2010(%)<br />Source: AC/Nielsen. Preparation: Abralatas.<br />
  110. 110. Brazil. Beer market share by packaging <br />2005-2010(%)<br />Source: AC/Nielsen. Preparation: Abralatas.<br />
  111. 111. Brazil. CSD andbeermarketsharebypackaging<br />2005-2010(%)<br />Source: AC/Nielsen. Preparation: Abralatas.<br />
  112. 112. Brazil: AluminumcanmarketsharebydistributionchannelDec04/Jan05;Dec10/Jan11 (%)<br />CSD<br />Beer<br />Dec04/Jan05<br />Dec10/Jan11<br />Self Service<br />Traditional<br />Bar<br />Source: AC/Nielsen. Preparation: Abralatas.<br />
  113. 113. Thank you!renault.castro@abralatas.org.br<br />

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