Verallia to proceed with Brazil and Italian glass furnaces

Container glass manufacturer Verallia is to proceed with the commissioning of a glass furnace in Brazil later this year.

It confirmed its furnace currently under construction in Campo Bom is still set to start up in the third quarter of this year, while a new furnace in its Pescia, Italy facility will start in the second quarter of 2025.

The France-headquartered glass packaging group will continue to monitor demand trends to confirm these start-up dates.

But planned capacity additions in Montblanc, Spain next year and again in Italy in 2026 have been postponed to beyond 2026.

“Pre-engineering studies are in progress and the group will begin investing in construction as soon as demand has sufficiently recovered,” it said.

Its CEO Patrice Lucas said work was continuing to start up its first electric furnace in Cognac, France and first hybrid furnace in Zaragoza, Spain this year.

The Cognac furnace should emit 60% fewer CO2 emissions than a traditional furnace, while the hybrid technology in Zaragoza should lower CO2 emissions by 50% compared with a traditional furnace.

In its financial report for 2023 Verallia reported a 16.5% increase in revenue to €3,904 million in 2023 compared to 2022.

Demand has fallen in Europe since summer 2023 due to a decline in end demand and large-scale inventory clearance across the whole downstream value chain. 

“In terms of end markets beer was the segment most impacted by weaker demand in 2023 as early as the first half of the year. Volumes in the still wine segment also declined while activity in the spirits segment, having remained solid in the first half of the year, deteriorated in the second half,” it said.

“Sales of food jars and bottles for non-alcoholic beverages and sparkling wines were more resilient, with Champagne and Prosecco volumes holding up well.”

In Latin America, revenue was down 5.5%, in contrast with growth of 65.8% the year before. 

However, these figures were deeply impacted by activity in Argentina which experienced vigorous organic growth, driven by repeated price increases in a context of high inflation, but a deeply negative foreign exchange effect linked to the devaluation of the peso, which lost almost 80% of its value against the euro in 2023.

In 2023 the group also completed the acquisition of five cullet plants from Spain’s Santaolalla Group. 

The objective of this investment is to continue Verallia’s strategy of maximising cullet use in its production process and to progress towards its CO2 reduction target, the first major milestone of which is a 46% reduction in emissions by 2030 compared to 2019.

21.02.2024, Verallia