While green, yellow and blue are the dominating colors of the
FIFA World Cup in full flow in Brazil,
) has decided to go black and red instead. Owens-Illinois is now
beefing up its black-glass production capabilities worldwide and
will also showcase its newly developed red glass to the world's
largest food and beverage producers.
According to Owens-Illinois, black glass projects a premium image
while ensuring that light won't penetrate the bottle and degrade
(SAB.L) has already used Owens-Illinois' jet black bottles for its
new Miller Fortune premium beer. The company has facilities in
Brazil and Australia, New York and Atlanta, and Ottawa and Scotland
to manufacture these bottles.
On June 13, Owens-Illinois announced the official opening of its
$35 million Innovation Center in Perrysburg, OH. This will allow
the company to experiment with new products and processes in a
controlled production environment without affecting its regular
production lines for testing. What would have otherwise taken
months or even years can now be done in days or weeks, thanks to
the brand new Innovation Center.
The combined R&D and pilot plant facility became operational in
Sep 2013 and has already churned out more than 40 sample bottles
for customers and internal development purposes. The line has also
worked with four colors of glass. Previously, simple design changes
on a bottle took weeks to be run. Now with the help of streamlined
processes, powerful modeling capabilities, 3-D printer and the help
of the Innovation Center, Owens-Illinois can run multiple design
changes in a single day.
The facility spanning 24,000 square feet consists of a 20 metric
tonne oxy-fueled furnace, two production lines and inspection
equipment. While one line produces sample bottles and trials for
new products, the other is solely dedicated to R&D and is being
used to develop new technologies and processes for melting and
The development of red glass is one of the major triumphs of this
Innovation Center. The color red provides even more UV protection
than amber glass, which is the industry standard for UV protection.
Beer and dairy industries, whose products are susceptible to UV
damage, are sure to benefit from red glass. Owens-Illinois' red
glass would also be considerably cheaper than conventional red
glass made with gold.
Owens-Illinois' second-quarter results are expected to get a boost
from the World Cup, which will see demand reaching peak levels.
Moreover, new concepts in glass production and technologies could
bring a radical change in the process of melting and forming glass
at this premier glass bottle maker. Currently, no other
manufacturer has the capability to produce red glass, giving
Owens-Illinois a distinct competitive advantage.
Their black bottles too will see increasing traction. The market
for distilled spirits is growing rapidly in the U.S. and new and
interesting bottle types are more than welcome for the marketing of
spirits. The huge demand for these bottles will help the company to
recover the higher manufacturing cost associated with it.
Owens-Illinois currently carries a Zacks Rank #3 (Hold). Some
better-ranked stocks in the retail sector include
Crown Holdings Inc.
Sealed Air Corporation
Graphic Packaging Holding Co.
). While Crown Holdings carries a Zacks Rank #1 (Strong Buy),
Sealed Air and Graphic Packaging hold a Zacks Rank #2 (Buy).
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SEALED AIR CORP (SEE): Free Stock Analysis
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