Canmaking is on the increase

From The Times

March 23, 2009

Can we survive the recession? Yes we can


There has been an increase in demand of up to 50 per cent for tinplate, the key material in food and drink cans, as customers economise buying more tinned beans and puddings


Christine Buckley, Industrial Editor
Baked beans for dinner? Maybe a little comfort sponge pud afterwards?

The recession is altering our eating habits, with staying in becoming the new going out and economising taking over from indulging in many households. And this, in turn, is fuelling an often overlooked sector of industry, The Times has learnt.

While large parts of heavy industry struggle with idle plants and short-time working, canmaking is on the increase. So much so that Corus has raised the price of tinplate — a key material for food and drink cans — because of an increase in demand of up to 50 per cent. The Anglo-Dutch steelmaker has also slowed down a previous plan to cut production at its only tinplate plant in Britain.

According to the Metal Packaging Manufacturers' Association (MPMA), the can industry's trade body, can output in the final quarter of last year jumped by 10 per cent and is continuing at the same rate this year.

Nick Mullen, director of the MPMA, said that some of the 14 canmaking operations in Britain, particularly those making drinks cans, are working around the clock seven days a week to keep up with demand from the food and drink producers who fill the cans. He said: “We saw a bit of a step-change in the last quarter of 2008. I think in the economic downturn, people revert to a very natural self-preservation. It's about cost, but it is also about what people are familiar and comfortable with.”

According to TNS, the market research group, baked beans and tinned puddings are the stars of the canned food market. For the year to the end of February, the volume of baked beans sold rose 2.1 per cent to 295 million. Edward Garner, a research director at TNS, says that for baked beans a jump of 2 per cent is high, because of the sheer volume consumed. “When you have a staple product that is sold in such large amounts, a rise like this is very significant.”

And in the midst of the unending gloom in the economy, Britons increasingly are turning back to childhood pleasures. The volume of tinned sponge puddings rose by 9.5 per cent in the same period to just under six million. Rice pudding has increased by 4.8 per cent to 35.9 million cans.

Mr Mullen said that there was also evidence of a rise in popularity in tinned pet food, as cat and dog owners switch back from pouches.

The drinks can industry is also expecting a boost from drinkers deciding to have a beer or two at home rather than at the pub.

Vince Major, chairman of Can Makers, which represents the industry, said: “The price differential between purchasing alcoholic drinks in the on and off trade is a key driver for growth in the beer and cider sector. The current economic climate will, we anticipate, further influence growth in the off-trade market as we expect less people to visit pubs and instead choose to drink at home.”

Canmakers, which employ about 5,000 people in the UK, are unhappy with the leap in price for tinplate — flat-rolled steel covered with tin. Crown Food Europe, Britain's biggest canmaker, said that it would have to pass on the costs to its customers.

Corus, which produces tinplate in the Netherlands and in South Wales, said that contracts for tinplate were negotiated annually and there was no spot price for the metal. A spokesman for the company, which has implemented job cuts and has reduced overall output by 30 per cent, said that it was delaying making production cuts in the UK tinplate factory.

Just for openers

- In 1810, Nicholas Appert, a Frenchman, was the first to preserve foods in containers, using glass jars, by driving out the air with heat before sealing. They were used for troops at the Russian front

- Soon after, Peter Durand, an Englishman, patented some ideas for a process that could include the tinplate can, using solder for sealing

- It was another 80 years before a high-speed mechanical seaming process was developed — by the Sanitary Can Company of the United States

- About 400 billion cans are made globally every year for food, drinks, industrial products and aerosols

- The United States is the biggest market for cans, with more than 100 billion for drinks and about 31 billion for food

- In Europe demand for drinks cans has grown at between 2 and 5 per cent for the past decade, fuelled in part by Eastern Europe and Russia

Source: The Canmaker

http://business.timesonline.co.uk/tol/business/industry_sectors/industrials/article5956227.ece