A major cans supplier to the beverage industry is set to complete by mid-year a $13.1 million expansion to its facilities at Dammam Industrial City.

United Arab Can Manufacturing Company (UAC), whose owners include three prominent Saudi beverage companies, has completed one part of the expansion in which it has the capability now to produce 200 million additional cans. By June’s end it expects to complete a capacity increase of 600 million ends. Investment in these upgrades amount to $10 million.

The company has also invested $2.1 million in can printing conversion that involves an increase of colours from six to eight. Another $250,000 has been invested on laser engraving printing plate technology and $750,000 on a 202 stay-on-tab (SOT) closure system.

UAC general manager Paul Whiffing said once the existing projects were completed there would be a further review in line with an update of the existing five-year plan for further growth and expansion.

With these expansions, cans capacity has risen to 1.8 billion and ends capacity to 3 billion.

UAC manufactures beverage cans and beverage ends. The range currently offered covers cans capacities of 185 ml, 250 ml and 330 ml. The 185 ml and 250 ml cans are 202 diameter taking 200 diameter ends. The 330 ml can body is 211 diameter necked in to take either 202 or 206 diameter ends. UAC also produces beverage ends covering the following range – 200 diameter RPT (ring pull tab) and LOE (large opening end), 202 RPT and 206 RPT and SOT.

The company is jointly owned by four Saudi partners, namely Olayan Financing Company, Coca Cola Bottling Company of Saudi Arabia, Aujan Industries Company and Al Jabr Soft Drinks.

The UAC plant opened in 1997 as a joint venture between the four Saudi partners, three of whom were consumers of beverage cans, and Reynolds international Inc, which provided the technical expertise and support for the plant. In 2001 the Saudi partners bought out Reynolds.

Sales volumes rising
UAC, certified to ISO 9001:2008, has seen sales volumes of cans and ends rising despite the global recession. Last year the company produced to capacity and sold all. In the first quarter of this year, the company sold 400 million cans and 650 million ends.

'Special features in 2010 were the effect of the retail price increase in Saudi Arabia from SR1 ($0.26) to SR1.5 on can sales for leading carbonated soft drink (CSD) brands. Overall demand in the region continues to rise for UAC as it is not dependant on just CSDs,' commented Whiffing.

'The global recession had an effect on demand but a much larger effect on commodity prices (aluminium), affecting the financial performance of the business.'

The company imports its aluminium requirements from the US, Korea, Australia, Russia, France, Germany and Japan.

As much as 60 per cent of UAC’s sales come from its 250 ml cans and ends with the balance split over the other two can sizes. The company exports to Bahrain, Kuwait, Jordan, Yemen, Iraq and Iran.

Commenting on the challenges the company faced, Whiffing said they revolved around 'continually changing regulations in terms of recruitment, visa availability etc plus packaging regulations such as SOT vs RPT closures.'