Crown Holdings is bubbling overseas

Posted: February 17, 2014

Americans are drinking less soda, and that is bad news for soda-makers such as Coca-Cola and PepsiCo.

But it is also unpleasant news for people who make the cans.

The Philadelphia-based Crown Holdings Inc., which was founded in 1892 by the inventor of the crown-shaped bottle cap, makes soda cans in four diameters, 21 sizes in all.

So when there is a hiccup in beverage consumption, the gas can be felt by folks at Crown - No. 17 on the Philly50.

"The North American beverage business has been declining over the last several years," Timothy J. Donahue, Crown Holdings' president and chief operating officer, said Feb. 4, according to a SeekingAlpha transcript of the conference call with financial analysts that coincided with the release of full-year financial results for 2013 and the fourth quarter.

Crown's total net sales increased from $8.47 billion in 2012 to $8.656 billion in 2013, but net income decreased from $559 million in 2012 to $324 million in 2013.

The company groups its beverage businesses by region. While the Americas beverage segment increased sales from $2.274 billion in 2012 to $2.289 billion in sales in 2013, there were differences within the region. Donahue told analysts there was a 1 percent decline in North America but increases of 6 percent to 7 percent in Brazil, Colombia, and Mexico.

While canning and bottling companies have closed factories in North America in recent years, Crown is anxious to complete construction and start producing at a facility in Teresina, Brazil.

The U.S. market remains huge, but Crown's Asia revenue increased more than 20 percent in 2013.

Political instability in Thailand? Workers rioting in Cambodia? Well, sure, some beer and soda deliveries were disrupted, but people still need beverages.

"In 2013 we completed the construction of five beverage-can lines across Asia Pacific, including three new plants in Southeast Asia," Donahue said, according to the transcript. "Over the last four years, our Asian team has constructed eight new plants and a total of 13 beverage-can lines, adding more than nine billion cans of capacity. During this time, revenues and segment income have increased 90 percent and 53 percent, respectively."

The challenge in American beverage packaging was also reflected in the recent bankruptcy auction for the assets of a Crown spin-off, Constar International L.L.C., which was based in Trevose, Bucks County

Europe is recovering and Crown is expanding there, having agreed Oct. 31 to buy Spain-based Mivisa for $1.62 billion.

Crown Holdings' website is, in honor of William Painter, who invented the "crown cork" bottle cap in 1892 and formed the Crown Cork & Seal Co. of Baltimore. Crown entered the tin-can business by buying Philadelphia's Acme Can Co. in 1936. It moved its headquarters here from Baltimore in 1958 and now is located off Roosevelt Boulevard. The company employs 21,900 people worldwide.


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