O-I acquires two plants in northern China

Owens-Illinois said it had entered into an agreement to acquire the glass container manufacturing business of Hebei Rixin Glass Group in northern China.

The deal, expected to close before year-end, means O-I has more than doubled its capacity in China in the past year to more than one million tons (up from 440,000 tons), making the company China's second largest glass container manufacturer.

The acquisition, located in the fast-growing Beijing/Tianjin region of China's Hebei province, includes two plants and delivers an additional 270,000 tons for O-I.

The Hebei province is the third largest glass market in China and represents approximately 10% of the total local market.

The newly acquired plants produce glass containers predominantly for China's rapidly growing domestic beer market.

By 2015, China's domestic beer market is expected to reach 573 million hectoliters - more than twice the size of the US beer market, which is the world's second largest.

"Our operations in China now include eight glass manufacturing plants, as well as a plant in Tianjin that produces molds for glass manufacturing. The newly acquired plants have lower cost profiles than our existing operations in China, thereby enabling us to expand our reach beyond the premium markets and into the rapidly growing mass beer market," said chairman and CEO Al Stroucken.