RECORD INVESTMENT FOR O-I GLASS IN FRANCE: €95 MILLION TO UPGRADE PLANTS IN GIRONCOURT AND REIMS

Rhea-AI Summary

O-I Glass, Inc (NYSE: OI) is investing €95 million into its French glass packaging production facilities in Gironcourt-sur-Vraine and Reims to enhance sustainability, flexibility, and productivity. The investments align with O-I's ESG roadmap and capital spending plan, focusing on modernization and innovation.

Insights

Environmental Sustainability Expert

The investment of €95 million by O-I Glass, Inc into its French glass packaging production facilities is a strategic move that underscores the company's commitment to environmental sustainability. The implementation of Gas Oxy Advanced Technology (GOAT) represents a significant technological advancement in reducing CO2 emissions. The expected reduction of up to 18% in CO2 emissions aligns with global efforts to mitigate climate change and can lead to improved brand reputation and potentially lower regulatory costs in the future. Such technological upgrades may also result in operational cost savings over the long term due to increased energy efficiency.

From an environmental perspective, the heat recovery system that pre-heats raw materials and recycled glass is another commendable aspect of this investment. This innovation not only contributes to sustainability but also enhances the circular economy by optimizing the use of recycled materials. The modernization of production lines to increase flexibility and capacity further indicates a forward-thinking approach to meet the evolving demands of the market while adhering to environmental standards.

Market Research Analyst

The strategic investment by O-I Glass, Inc in Gironcourt-sur-Vraine and Reims facilities is an indicator of the company's focus on improving productivity and flexibility, which are crucial factors in maintaining a competitive edge in the glass packaging industry. By upgrading their production lines, O-I Glass is likely positioning itself to better respond to market demands and customer needs. This move could potentially lead to increased market share and revenue growth.

Furthermore, the collaboration with key customers in the rebuilding of a furnace using GOAT technology suggests a strong customer-centric approach. This partnership may result in enhanced customer loyalty and attract new clients who prioritize sustainability in their supply chain. The modernization efforts may also allow O-I Glass to introduce new products or improve existing offerings, which could appeal to a broader customer base and open up additional revenue streams.

Financial Analyst

The announcement of a €95 million investment in production facilities reflects a significant capital expenditure for O-I Glass, Inc. Investors and stakeholders should consider the potential impact on the company's financials, including short-term cash flow and long-term return on investment. The capital outlay for the GOAT technology and other upgrades will likely affect the company's balance sheet and the benefits from the investment may take several years to materialize fully.

However, the anticipated reduction in CO2 emissions and increased energy efficiency could lead to cost savings on energy consumption and potential tax incentives related to sustainability initiatives. These savings could offset the initial investment over time. Additionally, the increase in production capacity and flexibility could lead to higher sales volumes and improved profit margins, contributing positively to the company's financial health in the long run. It is also worth noting that such proactive investments in sustainability and modernization could be viewed favorably by investors who are increasingly focusing on environmental, social and governance (ESG) criteria when making investment decisions.

• Major advances in sustainability, flexibility, and productivity 
• €55 million for the plant in Gironcourt-sur-Vraine; €40 million for Reims

Perrysburg / Vaulx-en-Velin , Feb. 20, 2024 (GLOBE NEWSWIRE) -- O-I Glass, Inc (NYSE: OI) announced today the company is investing €95 million into two of its French glass packaging production facilities. As a continuation of its modernization investment program, these significant investments aim to upgrade the sustainability, flexibility, and productivity of its operations in Gironcourt-sur-Vraine and Reims. This investment is consistent with O-I's recently updated ESG roadmap which is aligned with our previously announced capital spending plan.

In Gironcourt, where the plant recently marked its 120th anniversary, €55 million will be invested in close cooperation with one of its key customers to rebuild a furnace and equip it with innovative GOAT technology (Gas Oxy Advanced Technology).

This innovative approach – already successfully implemented last year at the O-I plant in Vayres (France) – uses a mix of gas and oxygen to heat the furnace. In combination with a newly installed heat recovery system to pre-heat raw materials and recycled glass, the new installation is expected to reduce CO2 emissions by up to 18%.

In addition to the furnace upgrade, a production line at the plant will be modernized to further increase flexibility and capacity. An average of about 80% of the plant’s raw materials is comprised of scrap and locally recycled glass, underlining the circular and local nature of glass packaging.

The majority of the glass bottles produced in Gironcourt are supplied to customers by rail, reducing the number of trucks per week by about 250. The new expenditure into Gironcourt will increase the total investment into the site to almost €120 million since 2019 when O-I established an all-new third furnace in Gironcourt. The plant produces approximately 1.9 billion bottles a year, primarily for the beer market.

In Reims, O-I completed a €40 million investment for a major upgrade including the full renovation of one of the plant’s two furnaces and a production line, as well as the installation of all-new equipment. On top of multiple operational benefits, this also resulted in an overall energy reduction of about 5%.

In total, O-I has invested €90 million into the Reims site since 2019, when its other furnace was rebuilt—contributing to making it one of the most modern plants within O-I’s global footprint. 

The Reims plant, which celebrated its 150 years anniversary in 2023, is a model for O-I’s overall sustainability efforts. An average of about 90% of its raw material consists of scrap and locally recycled glass (“cullet”). The high cullet rate is a major contributor in reducing the plant’s CO2 emissions by about 60% and fine particle emissions by about 80%. Since the 2019 investment, waste heat from glass packaging production has been recovered to be used in domestic homes in the local community.

The O-I plant in Reims is ideally located in the heart of the Champagne vineyards minimizing delivery routes and time to the wineries. The plant delivers champagne bottles to nearby customers with trucks powered by grapeseed and fryer oil resulting in about a 60% CO2 emission reduction compared to diesel fuel and about 80% less fine particles emissions.

The plant serves a highly diverse customer base serving more than 1,000 customers in France. It is able to produce bottles in three colors and in sizes ranging from 0.2l to Magnum. It produces 300 million bottles a year for the Champagne, Burgundy, Loire Valley, and Alsace markets.

For Walter Ferrer, Managing Director of O-I Glass for Southwest Europe, "these very significant investments are perfectly in line with the global approach adopted by O-I to reinforce our commitment to sustainable development, increase the energy efficiency of our equipment, create more resilient supply chains and constantly seek to improve the working conditions of our teams. They also demonstrate the confidence we have in our facilities in France, and our full commitment to serving our customers, our teams, and the planet.” 

ABOUT O-I 

At O-I Glass, Inc. (NYSE: OI), we love glass and we’re proud to be one of the leading producers of glass bottles and jars around the globe. Glass is not only beautiful, it’s also pure and completely recyclable, making it the most sustainable rigid packaging material. Headquartered in Perrysburg, Ohio (USA), O-I is the preferred partner for many of the world’s leading food and beverage brands. We innovate in line with customers’ needs to create iconic packaging that builds brands around the world. Led by our diverse team of more than 23,000 people across 68 plants in 19 countries, O-I achieved net sales of $7.1 billion in 2023. Learn more about us: o-i.com / Facebook / Twitter / Instagram / LinkedIn 

Forward-Looking Statements  

This press release contains “forward-looking” statements related to O-I Glass, Inc. (“O-I Glass” or the “company”) within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Section 27A of the Securities Act of 1933, as amended. Forward-looking statements reflect the company’s current expectations and projections about future events at the time, and thus involve uncertainty and risk. The words “believe,” “expect,” “anticipate,” “will,” “could,” “would,” “should,” “may,” “plan,” “estimate,” “intend,” “predict,” “potential,” “continue,” and the negatives of these words and other similar expressions generally identify forward-looking statements.  

  

It is possible that the Company’s future financial performance may differ from expectations due to a variety of factors including, but not limited to the following: (1) the general political, economic and competitive conditions in markets and countries where the Company has operations, including uncertainties related to economic and social conditions, trade disputes, disruptions in the supply chain, competitive pricing pressures, inflation or deflation, changes in tax rates and laws, war, civil disturbance or acts of terrorism, natural disasters, public health issues and weather, (2) cost and availability of raw materials, labor, energy and transportation (including impacts related to the current Ukraine-Russia and Israel-Hamas conflicts and disruptions in supply of raw materials caused by transportation delays), (3) competitive pressures, consumer preferences for alternative forms of packaging or consolidation among competitors and customers, (4) changes in consumer preferences or customer inventory management practices, (5) the continuing consolidation of the Company’s customer base, (6) the Company’s ability to improve its glass melting technology, known as the MAGMA program, and implement it within the timeframe expected, (7) unanticipated supply chain and operational disruptions, including higher capital spending, (8) seasonability of customer demand, (9) the failure of the Company’s joint venture partners to meet their obligations or commit additional capital to the joint venture, (10) labor shortages, labor cost increases or strikes, (11) the Company’s ability to acquire or divest businesses, acquire and expand plants, integrate operations of acquired businesses and achieve expected benefits from acquisitions, divestitures or expansions, (12) the Company’s ability to generate sufficient future cash flows to ensure the Company’s goodwill is not impaired, (13) any increases in the underfunded status of the Company’s pension plans, (14) any failure or disruption of the Company’s information technology, or those of third parties on which the Company relies, or any cybersecurity or data privacy incidents affecting the Company or its third-party service providers, (15) risks related to the Company’s indebtedness or changes in capital availability or cost, including interest rate fluctuations and the ability of the Company to generate cash to service indebtedness and refinance debt on favorable terms, (16) risks associated with operating in foreign countries, (17) foreign currency fluctuations relative to the U.S. dollar, (18) changes in tax laws or U.S. trade policies, (19) the Company’s ability to comply with various environmental legal requirements, (20) risks related to recycling and recycled content laws and regulations, (21) risks related to climate-change and air emissions, including related laws or regulations and increased ESG scrutiny and changing expectations from stakeholders and the other risk factors discussed in the Company's filings with the Securities and Exchange Commission.  

  

It is not possible to foresee or identify all such factors. Any forward-looking statements in this document are based on certain assumptions and analyses made by the Company in light of its experience and perception of historical trends, current conditions, expected future developments, and other factors it believes are appropriate in the circumstances. Forward-looking statements are not a guarantee of future performance and actual results or developments may differ materially from expectations. While the Company continually reviews trends and uncertainties affecting the Company’s results of operations and financial condition, the Company does not assume any obligation to update or supplement any particular forward-looking statements contained in this document.  

FAQ

What is the purpose of O-I Glass, Inc's €95 million investment in its French facilities?

O-I Glass, Inc is investing €95 million to upgrade the sustainability, flexibility, and productivity of its glass packaging production facilities in Gironcourt-sur-Vraine and Reims.

How will the investment in Gironcourt-sur-Vraine enhance sustainability?

The investment in Gironcourt-sur-Vraine includes rebuilding a furnace with innovative GOAT technology (Gas Oxy Advanced Technology) to reduce CO2 emissions by up to 18%.

What is the innovative approach used in the furnace upgrade at Gironcourt-sur-Vraine?

The furnace upgrade at Gironcourt-sur-Vraine will use a mix of gas and oxygen to heat the furnace, along with a heat recovery system to pre-heat raw materials and recycled glass.

Which plant will receive €55 million for the furnace upgrade and innovative technology?

The plant in Gironcourt-sur-Vraine will receive €55 million for the furnace upgrade and innovative GOAT technology implementation.

How will the production line at the Gironcourt-sur-Vraine plant be modernized?

The production line at the Gironcourt-sur-Vraine plant will be modernized to increase flexibility and capacity as part of the investment.