28.04.2020 - The Canmaker
Tourism restrictions and an expected rise in demand for soft drinks and beer in Russia will maintain the stability of the domestic canmaking industry despite the uncertainty caused by the coronavirus pandemic, according to analysts.
Petr Likholitov, corporate affairs director of the Russian Aluminum Association, which represents leading Russian manufacturers of aluminium and aluminium products, told The Canmaker that despite some instability caused by the ongoing spread of coronavirus, the can industry remains buoyant.
He said: “None of leading local market players has announced any suspension of their production and cancellation of orders, which means that all the production and other activities in the industry are carried out in accordance with previously approved schedules.”
Likholitov added that the demand for aluminium cans among local customers is expected to rise since people were not going away for the holidays.
“That will result in a significant growth of the consumption of soft drinks, as well as beer. The only negative factor in that case is the possibility of a cold and rainy summer this year,” he said.
At the same time, the growth in demand for soft drinks in Russia, including those packed in aluminium cans, will be partly be down to the reduction in disposable income for the local population, according to Igor Kichaykin, project manager of NEO Center, one of Russia’s analyst agencies that covers metal packaging. Another factor would be the existing ban on visiting restaurants and bars in April and May.
Kichaykin commented: “The first factor, however, will result in a general reduction in consumption, but this decrease will be offset by the influx of consumers from bars and restaurants into retail purchases of aluminium packaging.
“In general, we do not expect a significant decrease of the market in 2020, rather, we can say about the growth in sales volumes, however, in the medium term, starting from 2021 onwards, there is a possibility of a reduction in the market.”
The Russian beer and beverage industry has two domestic sources for D&I aluminium cans, Ball and Canpack, each of which operate two plants with total capacity of about eight billion cans a year.