Owens-Illinois, Inc. through its subsidiaries, is the successor to a business
established in 1903. The Company is the largest manufacturer of glass containers
in the world, with leading positions in Europe, North America, Asia Pacific and
South America.
The Company believes it is a low-cost producer in the North American rigid
packaging market, as well as a low-cost producer in many of the international
glass segments in which it competes. Much of this cost advantage is due to the
Company’s proprietary equipment and process technology. The Company believes
its proprietary high volume glass forming machines, developed and refined by
its engineering group, are significantly more efficient and productive than
those used by competitors. The Company’s machine development activities
and systematic upgrading of production equipment have given it a low-cost leadership
position in the glass container segment in most of the countries in which it
competes, a key strength to competing successfully in the rigid packaging market.
Products and Services
The Company produces glass containers for beer and ready-to-drink low alcohol
refreshers, spirits, wine, food, tea, juice and pharmaceuticals. The Company
also produces glass containers for soft drinks and other non-alcoholic beverages,
principally outside the U.S. The Company manufactures these products in a wide
range of sizes, shapes and colors. The Company is active in new product development
and glass container innovation.
Customers
In most of the countries where the Company competes, it has the leading position
in the glass container segment of the rigid packaging market based on sales
revenue. The largest customers include many of the leading manufacturers and
marketers of glass packaged products in the world. In the U.S., the majority
of customers for glass containers are brewers, wine vintners, distillers and
food producers. The Company also produces glass containers for soft drinks,
principally outside the U.S. The largest U.S. glass container customers include
(in alphabetical order) Anheuser-Busch, Diageo, H.J. Heinz, Molson/Coors, Novartis,
Pepsico, SABMiller, and Saxco-Demptos, Inc. The largest glass container customers
outside the U.S. include (in alphabetical order) Diageo, Foster’s, Heineken,
InBev, Lion Nathan, Molson/Coors, SABMiller, and Scottish & Newcastle. The
Company is a major glass container supplier to all of these customers.
The Company sells most of its glass container products directly to customers
under annual or multi-year supply agreements. The Company also sells some of
its products through distributors. Glass container production is typically scheduled
to maintain reasonable levels of inventory.
Competitors
The Company has the leading share of the glass container segment of the U.S.
rigid packaging market based on sales revenue by domestic producers in the U.S.
The principal glass container competitors in the U.S. are Saint-Gobain Containers,
Inc., a wholly-owned subsidiary of Compagnie de Saint-Gobain, and Anchor Glass
Container Corporation. In addition, imports from Mexico and other countries
increasingly compete in U.S. glass container segments. Additionally, a few major
consumer packaged goods companies also self-manufacture glass containers.
In supplying glass containers outside of the U.S., the Company competes directly
with Compagnie de Saint-Gobain in Europe and Brazil, Ardagh plc in the U.K.,
Germany, and Poland, Vetropak in the Czech Republic and Amcor Limited in Australia.
In other locations in Europe, the Company competes indirectly with a variety
of glass container firms including Compagnie de Saint-Gobain, Vetropak and Ardagh
plc. Except as mentioned above, the Company does not compete with any large,
multi-national glass container manufacturers in South America or the Asia Pacific
region.
In addition to competing with other large, well-established manufacturers in
the glass container segment, the Company competes with manufacturers of other
forms of rigid packaging, principally aluminum cans and plastic containers,
on the basis of quality, price, service and the marketing attributes of the
container. The principal competitors producing metal containers are Amcor, Ball
Corporation, Crown Holdings, Inc., Rexam plc, and Silgan Holdings Inc. The principal
competitors producing plastic containers are Consolidated Container Holdings,
LLC, Graham Packaging Company, Plastipak Packaging, Inc. and Silgan Holdings
Inc. The Company also competes with manufacturers of non-rigid packaging alternatives,
including flexible pouches and aseptic cartons.
The Company’s unit shipments of glass containers in countries outside
of the U.S. have grown substantially from levels in earlier years. The Company
has added to its international operations by acquiring glass container companies,
many of which have leading positions in growing or established markets, increasing
capacity at select foreign subsidiaries, and maintaining the global network
of glass container companies that license its technology. In many developing
countries, the Company’s international glass operations have benefited
in the last ten years from increased consumer spending power, a trend toward
the privatization of industry, a favorable climate for foreign investment, lowering
of trade barriers and global expansion programs by multi-national consumer companies.
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