The well-rounded Ball Corporation pitches packaging to companies producing food, beverage, and household goods. Food and beverage packaging includes steel cans and aluminum slugs. Ball's packaging revenue derives primarily from long-term contracts with a relatively few customers, such as MillerCoors and bottlers of Pepsi-Cola and Coca-Cola brands in Argentina, Brazil, China, Europe, and North America. Ball Aerospace & Technologies manufactures an array of aerospace systems, from satellites to tactical antennas, as well as providing systems engineering services. The Department of Defense, NASA, and their prime contractors, represent 87% of this segment's sales.
Year-over-year 2011 net sales rose 13% thanks to strong sales of metal packaging in China, demand for beverage containers in the Americas, and strong sales in the company's aerospace segment. Ball divides its work between four business segments.
The largest, metal beverage packaging, Americas and Asia, accounting for 51% of sales, went up about 15%. That uptick is reflected in some recent deals that expanded Ball's operations. This segment's operations are located in the US, Canada, Brazil, and China; it distributes containers mainly through multi-year supply contracts to companies that make carbonated soft drinks, beer, energy drinks, and other beverages.
The metal beverage packaging, Europe, segment, representing 23% of sales, went up about 19% as a result of an acquisition made in 2011. This segment includes the manufacturing of metal beverage containers, extruded aluminum aerosol containers, and aluminum slugs in the Czech Republic, France, Germany, the Netherlands, Poland, Serbia, and the UK.
Metal food and household products packaging, Americas, 17% of sales, spiked 4% as the result of better aluminum slug sales and a better pricing and sales mix. This segment caters to the US, Canada, and Argentina. The company's smallest segment, aerospace and technologies, 9% of sales, jumped 10% thanks to healthy demand from US defense contracts and commercial programs. The segment comprises the manufacture and sale of aerospace and related products for the defense, civil space, and commercial space markets.
In 2011 Ball grew through the $292 million acquisition of Aerocan, a European aluminum aerosol container and bottle supplier. The deal included three aerosol can plants and a 51% interest in a plant that churns out aluminum slugs (disks) for extruded aluminum packaging. Aerocan builds upon Ball's entry into the aluminum slug market.
To create a better balance with market demand, the company has closed facilities and transferred operations. Ball's operational adjustments in 2011 included closing a plant in California, relocating a line to Canada, and reducing capacity at an Ohio plant.
In 2010 the company raised its interest in Brazilian beverage packaging joint venture Latapack-Ball to more than 60%. The same year Ball bought the 65% of another metal beverage container joint venture, JFP, it didn't own. Included in the JFP deal is a long-term beverage can supply agreement with the company that sold its 65% share, Guangdong Jianlibao Group, and one of its affiliates. The next year Ball acquired the 60% share it didn't own of metal beverage container joint venture Qingdao M.C. Packaging (QMCP).
The company's "Drive for 10" strategy for growth is informed by what the company calls five strategic levers: maximizing value, expanding into new products, aligning with the right customers and markets, expanding geographically, and using experience and technological skill to stay competitive. – less
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