American beverage alcohol company Constellation Brands has finalised the joint venture agreement with Owens-Illinois (O-I) and also completed the acquisition of Anheuser-Busch InBev SA/NV's (ABI) glass production plant located next to Constellation's brewery in Nava, Coahuila, Mexico.
The ABI glass plant will be owned and operated by the newly formed joint venture.
Apart from the glass production plant, Constellation has also bought a high-density warehouse, land and rail infrastructure from ABI at the same site. The company spent around $300m in purchasing all these assets.
With this investment in glass sourcing, Constellation will be well-positioned to meet the growing demand for its beer portfolio.
While the plant currently has one operational glass furnace, JV plans to add three more furnaces.
After completion of the expansion, the plant is expected to supply more than 50% of the glass needs for Constellation's US beer business and employ close to 800 employees, up from the current 260.
Constellation Brands president and CEO Rob Sands said: "The acquisition of the glass plant and the formation of the joint venture play a significant role in our long-term glass sourcing strategy for our beer business.
"This strategy gives us greater control over our glass needs in terms of quality, flexibility, and cost-effectiveness. We look forward to working with O-I and the employees at the glass plant to continue to provide high-quality glass for Constellation's growing beer business. We are also very excited to be investing in the facility, which will likely bring new opportunities to the employees and the Nava community."
