Expanding production to meet domestic market growth
Brazil has achieved a 95% average annual beverage can recycling rate over the past 15 years compared with the global average of 69% for aluminium can recycling. Image: Shutterstock
Brazil’s can making industry has experienced extremes over the past four years, with the global pandemic and a change of government and economic policy causing demand for canned goods to fluctuate, while registering overall growth. David Hayes reports
Aluminium
Brazil’s two-piece and three-piece can markets have both grown during the past few years, prompting major can manufacturers to upgrade their existing plants and invest in building new factories.
This will enable expansion of production capacity to meet rising domestic demand for canned goods that are increasingly preferred by the country’s pro- recycling consumers.
Following a large increase in two-piece can consumption over the past decade, Brazil has become the world’s third largest aluminium beverage can market, reaching 33.4 billion can sales in 2021, registering a 5.2 per cent rise compared to 2020, according to the Brazil Aluminium Beverage Can Manufacturers’ Association (Abralatas).
Canned beverage consumption increased by 81 per cent in the decade to 2021, Abralatas says, while beverage can consumption among the country’s expanding 215 million population has risen to about 156 cans per capita; further consumption growth is expected in future.
Mineral water, including flavoured water products and ready-mixed alcoholic drinks, were among several new canned beverage categories launched in 2022. Sports drinks, wines and coffee drinks in cans also appeared on supermarket shelves and in convenience stores for the first time last year. Crown Holdings, for example, announced in July 2023 that Brazilian beverage producer, Socorro Bebidas, will launch its new Acquissima Sabor flavoured mineral water in 350ml CrownSleek cans. Available in two flavours, Lychee and Green Apple, the zero-calorie drinks follow Socorro’s earlier launch of its Acquissima mineral water brand in CrownSleek cans.
The total volume of canned water sold in Brazil increased almost seven times between 2021 and 2022, according to Crown, reflecting a growing trend in the region for consumers to choose canned water in preference to tap and bulk water.
Guaraná Antarctica is a guaraná flavoured soft drink first created in 1921. Image: David Hayes
Crown is one of four multinationals that are expanding their production facilities in Brazil to meet the recent increase in beverage can demand and expected growth in the future. The company has invested a reported US$130 million in building a new plant in Ubereba, Minas Gerais, that is designed to reach an eventual production capacity of 2.4 billion cans per year.
Also investing in Minas Gerais is Ardagh Metal Packaging Group, which is building a multi-line beverage can plant in Juiz de Fora and expanding its can end production capacity. Planned to be co-located with a new glass packaging plant that Ardagh Metal Packaging SA is also building at the same site, the new factory will be Ardagh’s fourth beverage can plant in Brazil, along with factories in Jacarei, Alagoinhas and Manaus.
CanPack Group of Poland is also ramping up its presence in Brazil. CanPack is expanding its Itumbiara plant and has committed to investing about $140 million to construct a beverage can plant in Pocos de Caldas in Minas Gerais state, which is scheduled to open in 2024.
The plant’s initial capacity will be 1.3 billion cans per year, with space available for further expansion in the future.
In addition to opening a new can plant, CanPack plans to begin production of beverage can ends in Brazil. The company is building a $70 million can end facility in Amazonas state capital, Manaus, in Northern Brazil, that will supply the domestic and regional markets.
Other companies expanding can production facilities in Brazil include Ball Corporation, which has invested about $60 million re-opening its previously idle Benevides beverage can plant in Para state, following the earlier climb in two- piece can demand and prices. The 1.2 billion cans per year plant re-opened in the first half of 2022, supplying a range of can sizes to customers mainly in Northern and Northeastern Brazil states.
Ball also has invested in building a new beverage can plant in Frutal, in the Southeastern state of Minas Gerais, which raises the company’s total number of can plants in Brazil to 12.
Brazil’s beverage can industry is considered an important industrial success story due to the high used can recycling rate the nation has achieved. Brazil’s current aluminium can recycling rate of 98.7 per cent in 2021, is believed to be the highest in the world.
Steel
Antarctica Pilsen is an American Adjunct Lager style beer brewed by Antarctica (Companhia Brasileira De Bebidas) in São Paulo. Image: David Hayes
Brazil’s steel can industry is similar in size to the nation’s aluminium can industry, in terms of metal tonnage used in can making, according to figures issued by Brazil Steel Can Manufacturers’ Association (Abeaco).
About 200,000 tons or 47.1 per cent of tinplate and TFS steel cans consumed in Brazil in 2019 were recycled, according to Abeaco, as part of more than nine million tons of scrap steel and post-consumer steel products recycled by the nation’s steel industry that year.
While the raw metal tonnages used for beverage can and steel can production appear similar, the ownership structure of the country’s beverage can industry is completely different to that of the steel can industry.
Brazil’s beverage can industry is dominated by multinational corporations, while production of steel cans is mostly controlled by locally-owned companies.
“Steel can production is still mainly a family- owned business and is now into the third or fourth generation of owners,” commented Affonso Caravalhaes, managing director of Metalitho, a can making and offset printing technology consultancy and equipment supplier.
“Steel can makers are introducing more technology. They need this to supply higher quality cans with lower production costs as more cans are going for export packaging and so the producers are becoming more professional.”
Established in 2002, Metalitho provides technical support services to the offset metal sheet printing industry that include retrofitting equipment upgrades, improving process controls and converting conventional can lines to UV printing.
Metalitho provides some customer services working with Brazil’s Dugraf Group, which specialises in steel offset sheet-fed and aluminium can dry offset printing solutions, supplying printing blankets from Continental of Germany to most Brazilian tinplate and TFS can makers, and printing plates from Toray of Japan to beverage can manufacturers.
“Our steel can maker customers are looking to produce at lower cost as more competition for steel cans is coming from plastic containers. They want better quality cans and more production,” Caravalhaes said.
In addition to his position with Metalitho, Caravalhaes is R&D manager at Incoflandres Group. Founded in 1950, Incoflandres is one of the largest services companies supporting the fish and meat can manufacturing industries in Brazil and South America, specialising in outsourced steel coil cutting, varnishing and printing services.
“Can makers are looking to improve process controls to reduce waste output,” Caravalhaes commented. Incoflandres has invested in machinery to cut steel coils with full sheet dimension control, and has installed fully-automatic varnish application and layer measurement equipment. In addition, the firm has installed digital pre-press equipment to improve the colour quality of steel can sheets printed on its offset lines.
Food products account for a large share of Brazil’s domestic three-piece can market. Fish canning, mainly sardines and tuna for domestic consumption, is a major canned food category.
“Fish cans represent an important share of our country’s total steel can volume,” Caravalhaes said. “Most of the large fish canneries are integrated companies. They have their own in-house can making facilities to produce their own cans. Some of them buy in printed sheets while others operate their own full production lines.”
Aside from food, aerosol cans are the other important growth area for Brazil’s steel can industry. “Recent investments in steel can production have been in aerosol and food cans; most of the equipment is imported from Europe,” Caravalhaes commented.
“There was some investment in steel cans production equipment in 2021 and 2022, but earlier during the global pandemic three-piece can investment was almost zero.”
Meanwhile, the recent growth of Brazil’s beverage and steel can manufacturing industries has been accompanied by important improvements in can makers’ printing capability.
“There has been higher consumption of two- piece cans during the recent pandemic as people consumed beverages at home because bars and restaurants were closed,” explained Marcio Mendonca, sales director of Dugraf Group, which supplies printing blankets from Continental of Germany and printing plates from Toray of Japan.
“Also, there was more money in circulation – people had more opportunity to buy canned beverages as they had more cash in their pockets, so can manufacturers began opening new two- piece plants.”
Brazil’s beverage can industry completed its transition to digital pre-press two years ago, following requests from soft drinks and beer companies for higher quality cans to display on supermarket shelves. In addition, industries using steel cans, such as aerosol can fillers, also need high-class printing to sell personal care and other canned products.
“Our customers are trying to improve their printed decoration. We help customers improve their pre-press and colour management to print more complex can body designs. Some customers, for example, require better ink or blankets,” said Metalitho’s Caravalhaes.
“The three-piece can market in Brazil is trying to develop more canned products. The impact for can manufacturers is shorter production runs and higher costs.
“In the past, can makers enjoyed long production runs but not now, so there is more competition to operate shorter production runs profitably.”
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