Tin can solution in sight for local beverage makers

New Delhi: If Hindustan Tin Works (HTW) has its way, you may soon be getting your favourite cola and that pint of beer in an affordable tin can.

The bane of the carbonated soft drink industry in India has largely been the inability to use cans, which are priced significantly higher than glass/PET bottles, since they are not manufactured indigenously in India.

But with HTW on Tuesday announcing a joint venture with UK packaging major Rexam Plc for setting up the country's first manufacturing plant of beverage cans, beverage consumption in India may well change for the better. At present, all cans are imported and attract about 35% import duty, but with domestic production beginning shortly, their prices could come down significantly.

The JV company, which will be called Rexam Beverage Can (India), plans to establish a 280 million cans per annum manufacturing facility in Mumbai. This will be Rexam's first manufacturing plant in South East Asia and is expected to begin production by the last quarter of 2006.

The £3 billion Rexam will hold the majority stake (51%) in the JV. The initial investment has been pegged at Rs 90 crore, of which half would be equity and the other half debt. According to industry estimates, the market for beer and beverage cans in India is about 100 million units per year, which is expected to double by 2007.

HTW already manufactures cans used in products like soups and juices, and is establishing another manufacturing facility for these cans at Himachal Pradesh with an investment of Rs 14 crore.