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Rexam slips into the red in downturn

CAN maker Rexam slipped into the red last year as hard-pressed consumers cut spending on drinks, although it said cost-cutting should help it improve performance in 2010.

Rexam, whose customers include Coca-Cola, Pepsi and SABMiller, said it made a pre-tax loss of £59m in the year to 31 December, compared with profits of £240m last year.

The group said retailers and suppliers cut stocks to save money and a lack of confidence caused consumers to rein in spending, particularly on non-essential items. Rexam hit back by cutting staff and closing drink can and plastic packaging factories and staging a £334m rights issue to cut debt to £1.8bn, from £2.6bn at the start of 2009.

The group, whose plastic packaging is also used in healthcare and personal care products, described 2009 as difficult and said the full year losses were “disappointing”. It said the strength of any global economic recovery was unclear and it expected conditions in some of its operations, such as speciality cans and Russia -- where new taxes are being imposed on beer – to remain tough.

Chief executive Graham Chipchase said, however, that volumes were stabilising but warned the trading environment would remain challenging.