Crown Holdings wants to pop a top on profits. The company is a leading global manufacturer of consumer packaging; steel and aluminum food and beverage cans and related packaging are Crown's primary lines. Its portfolio includes aerosol cans, and various metal vacuum closures marketed under brands Liftoff, SuperEnd, and Easylift, as well as specialty packaging, such as novelty containers and industrial cans. Crown also supplies can-making equipment and parts. Its roster of customers includes Coca-Cola, Cadberry Schweppes, Heinz, Nestlé, SC Johnson, Unilever, and Procter & Gamble, which owns Gillette, another customer. Crown operates 135 plants in 41 countries, with 72% of net sales coming from outside the US.
Crown's performance is driven by an unwavering focus to build segment income worldwide; it therefore segments its business along geographic lines. Its three divisions comprise the Americas, Europe, and Asia/Pacific. Crown is fighting back with heavy investments in international markets, particularly those promising urban growth, such as Latin America, Asia, and South and Central Europe.
The Asia/Pacific regional division operates 14 plants in six countries, and commands almost 9% of company revenues; however, its operations are not included as reportable segments. In 2012 the company announced that it would build a plant in Nanning, China, that will be able to annually produce 750 million cans. By 2013 the company plans to have 11 plants in China. Elsewhere in Asia, Crown announced in 2011 that it would expand the beverage and can production capacity of all three of its facilities in Vietnam, with an on-line operation date of 2012. In 2010 it acquired the remaining 45% stake in China- and Vietnam-based joint ventures it shared with Swire Pacific for a reported $150 million.
For its European division, the company in 2009 added $47 million to its ongoing construction of a new beverage can plant in eastern Slovakia, estimated to have an initial capacity of 750 million cans a year. Other expansions are planned for Turkey.
In South America, Crown's subsidiary in Brazil is looking to satisfy beer and soft drink demand fueled by the 2014 Football World Cup and the 2016 Summer Olympic Games held in Brazil. Crown already makes about 7.5 billion cans per year in Brazil, but in early 2011 the company selected the northern Brazilian city of Belém for a new beverage can plant (its fourth in the country), which is expected to be operational by 2012.
With international expansion, Crown, like its rivals, risks exposure to unfavorable foreign-currency exchange rates of the euro, pound sterling, and Canadian dollar, as well as cyclical consumer spending on food and beverages. Its net sales are also impacted by the rise or decrease in the cost of aluminum and steel, which is passed on to customers. With costs in mind, Crown divested a number of its lesser performing and non-core operations in 2009 as part of a company restructuring. It closed two Canadian food can plants and an aerosol plant, as well as reduced headcount both in Canada and Europe. Its hard choices were made to save the company about $25 million annually.
The company believes that technological innovation will help mitigate for usual risks and cycles. Not happy to just make containers the same old way, Crown Holdings operates research, development, and engineering centers in the US and the UK. Its mission is to design cost-efficient manufacturing processes, reduce material content while maintaining freshness, and develop new products with the application of new technologies. Some of its innovative closures include Orbit Closure (all-metal vacuum closure for glass jars), SuperEnd (metal ends using reduced material), and Easylift food ends (improved tab access). – less