A year after the closure of its plant in Ringsend, Dublin with the loss of 370 jobs, Ardagh is re-entering the Irish glass container market with aspirations to capture 30 per cent of it.
The company is to source its glass containers for the Irish market from the German plant now owned by Ardagh Glass Ltd (AGL), the Guernsey-registered private company which took over a number of demerged assets from Ardagh in February of this year. The assets include production facilities in the UK and Italy.
Yeoman International, the company associated with Mr Paul Coulson, chairman of Ardagh, is the largest shareholder in AGL and the second largest in Ardagh. Many Ardagh shareholders have retained their shares in AGL.
German firm Hermann Haye was bought earlier this year in a deal that was announced on the same day the plans to demerge the glass container manufacturing operations of Ardagh plc were unveiled. It now belongs to AGL.
There will only be a "marginal cost" involved in producing glass containers for the Irish markets as the German plant has an idle line which can be recommissioned, according to a spokesman for the Ardagh companies.
The spokesman said the price of Irish glass containers (bottles and jars) has increased by 30 per cent in recent times and this creates the opportunity for Ardagh to re-enter the Irish market. The glass containers sourced from Germany will be stored in the warehouses in Ringsend still owned by Ardagh.
At the time of the closure of the Ringsend plant last year, the company said its customers were sourcing their glass containers abroad, where they could be purchased for less than the price Ardagh was demanding.
Ardagh yesterday issued results for the six months to June 30th, 2003.
The results include the figures for the demerged glass operations for the first two months of the period.
Turnover for the entities not demerged was €1.8 million while the operating loss was €960,000.
In his statement, Mr Coulson said that "as product prices in the Irish market have increased considerably since the closure of [the Ardagh subsidiary\] Irish Glass, there are now opportunities for us to source products for the Irish market at profitable prices".
He said Ardagh would be seeking long-term commitments from both Ardagh Glass and its Irish customers to enable it to provide a service of the scale and quality required. Ardagh had 80 per cent of the Irish market two years ago.
The Irish market is believed to be worth about €50 million in turnover per annum. Profits arising from the Irish market are likely to be split between Ardagh and Ardagh Glass.
Ardagh's enamelling operation is in full production and "modestly profitable", according to Mr Coulson.
A legal clash between the plc and the Dublin Port Company over Ardagh's right to its lease on the Ringsend warehouse will be heard in the High Court on December 9th.
