Crown Holdings (CCK) Builds New Beverage Can Plant in Nevada
Crown Holdings, Inc. CCK recently announced the addition of a new beverage can plant in Mesquite, NV. This two-line state-of-the-art facility will supply standard and specialty beverage cans to its diverse beverage customers serving, carbonated soft drinks, energy drinks, sparkling water, beer, hard seltzers, and ready-to-drink cocktails. The plant is scheduled to commence operations in the second quarter of 2023 and will likely add 126 new jobs in the state.
This investment will aid Crown Holdings to serve its existing customers in the Western United States, while also supporting the expansion of new beverage can plants in order to meet customers’ heightening demand for aluminum beverage cans. Crown Holdings continues to implement several expansion projects to capitalize on this demand. In the current year, the company will be commercializing approximately 6 billion units of annual capacity with projects, including a new, two-line facility in Bowling Green, KY, and a new one-line plant in Vung Tau, Vietnam, as well as additional production lines in Olympia, WA and Rio Verde, Brazil. Among these, the first line in the Kentucky facility already started making commercial shipments in the second quarter of 2021, with the second line expected to commence production during the third quarter. By the end of 2022, the company expects to have 97 billion units of annualized global beverage-can capacity, which marks a 28% expansion from the 2019 base.
Crown Holdings falls under the Zacks Containers – Metal and Glass industry. Another player in the same industry, Ball Corporation BLL also recently announced that it will build a new multi-line aluminum beverage-can packaging plant in North Las Vegas, NV. This plant is scheduled to commence production by the end of 2022. The plant will supply a variety of innovative can sizes to diverse beverage customers.
Customers now prefer their beverages in cans over plastic packaging due to its sustainable benefits. These aluminum cans, bottles and cups are infinitely recyclable and economically valuable. An estimated 75% of the new beverage product launches are now in cans. The developing markets have witnessed higher growth rates owing to the rising per capita income and the consequent increase in beverage consumption. These companies are expanding their footprint, primarily in North America, as beverage cans have seen exponential growth in recent years in the country.
Additionally, beverage-can demand has been surging on the COVID-19 crisis as customers are opting to buy multiple packs of beverages and packaged products that can be consumed on-the-go. The global beverage-can industry is expected to grow by approximately 100 billion units by 2025.
Price Performance
The Crown Holdings stock has gained 3% so far this year, outperforming the industry’s growth of 0.1%.
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Zacks Rank & Stocks to Consider
Crown Holdings currently carries a Zacks Rank #4 (Sell).
Better-ranked stocks in the Industrial Products sector include Encore Wire Corporation WIRE and Alcoa Corporation AA, each flaunting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Encore Wire has a projected earnings growth rate of 332.6% for fiscal 2021. So far this year, the company’s shares have gained 45%.
Alcoa has an estimated earnings growth rate of 573.2% for 2021. The company’s shares have rallied 108%, so far this year.
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