Brazil Aluminum Cans Sector to Grow, Invest in 2008

Brazil's aluminum can industry aims to grow by 8 percent this year as the beverage market expands with the growing economy, a leader in the industry that sold 12 billion cans in 2007 said on Thursday. "Things have been going very well this year after very high growth last year of 13.5 percent (in the can industry). Over two years, it has been 25 percent," said Renault de Freitas Castro, executive director of the Brazilian Association of Highly-Recyclable Can Producers (Abralatas). Consumption is rising in most sectors in the Latin American country of around 184 million people, which is enjoying a sustained economic boom fueled by high prices for the many agricultural commodities and mineral resources it exports. Expecting to improve on last year's sales of 3 billion reais ($1.9 billion), the association's 10 can makers would invest $274 million on expansion and new factories this year and next, Castro told Reuters in an interview. Brazil's beverage sector, whose soft drinks are mostly sold in plastic and beers in glass bottles, was expected to grow by an estimated 4.5 percent in 2008, Castro said, boding well for the can industry that aims to dent plastic's dominance this year. "We are expecting growth of 8 percent which means more of the products being sold in aluminum cans," he said, adding the life-cycle of a beverage can, from production to recycling, was four weeks in Brazil compared with six to eight weeks in Europe and the United States. He said 50-60 percent of the beverage cans sold in Brazil were made from recycled aluminum and around 95 percent of all cans were recycled after use -- a rate Abralatas says has made Brazil the world's top can recycler for the past six years. Some of the recovered metal is then used by the automobile industry and other sectors. Castro said the high recycling rate was largely due to good organisation within the industry and the resourcefulness of thousands of unemployed or low wage earners who generated cash by collecting cans in residential areas or from food outlets. However, rising prices for aluminum have made it more expensive to buy scrap abroad for can manufacturing, Castro said, adding demand was outstripping supply. Fast-growing China has been driving growth in demand for this and other metals. Environmental benefits of using aluminum are central to Abralatas' promotion of the metal in packaging. Castro said it was the most recyclable packaging available and re-using it saved Brazil 2,000 GWh/year in power consumption each year. "When you recycle a can the energy expenditure is only 5 percent of what it takes first time round," Castro said. Source: Reuters