Rexam gains 100% of Russian can market

The packaging company Rexam is to buy the Russian drinks can maker Rostar for £149m, giving it a 100 per cent share of the country's can market. Rexam, the world's biggest can manufacturer, already has can-making facilities in Russia, where it has been since 1998, and the deal could lead to cost savings of between £5m and £10m, according to analysts. The company is buying the business from En+ Group, parent of the Russian aluminium giant Rusal. The move comes at a time of increasing difficulties between UK businesses and Russia. Shell and BP have come under pressure to sell parts of their Russian assets to domestic companies, and Dixons' owner, DSG, backed out of a £1bn deal to buy the Russian electrical company Eldorado citing "corporate, economic and political risks" in the market. Rexam's chief executive, Leslie Van de Walle, said the acquisition was in line with the company's emerging markets strategy. "We have been in Russia for over 10 years, and the acquisition, along with our new greenfield plant in Argayash and the investment in new lines at our existing plant, positions us well in this growth market," he said. Rostar saw its profits hit last year after it failed to hedge against the volatile aluminium price. Rexam said that profits were expected to improve this year. It added that Rostar, which has annual sales of £110m, will recover acquisition costs and start making money within a year. Rostar has two manufacturing facilities, near Moscow and St Petersburg, with a combined annual capacity to make 3 billion drinks cans. The deal comes just weeks after Rexam paid £800m for OI Plastics of the US.