A decline in beer sales in North America impacted O-I’s financial results in 2019.
The world’s largest container glass manufacturer saw full year net sales drop from $6.9 billion in 2018 to $6.7 billion in 2019.
Its CEO, Andres Lopez, said a 'significant decline' in its North American beer business was partly to blame.
Speaking to financial analysts during a call about its full year 2019 results Mr Lopez said: “To put this into perspective, in North America we had a decline of about 14% in 2019 and now represents just 9% of O-I's total legacy volume.
“We addressed this head-on by stopping two furnaces in the fourth quarter and a total of five furnaces since 2015. Likewise, we have closed or repurposed 17 machine lines over the past several years.
“Overall, these actions have effectively reduced our North American beer capacity by 35%. We stand ready to take further actions as conditions warrant it."
Later in the call he added: “We are laser-focused on improving our cash flow generation and reducing debt.
"After our challenges last year, we are highly focused on turning around our operating performance.
"Fortunately, we did see improving trends in the back half of 2019 and we have momentum heading into 2020.”
The company has introduced three turnaround initiatives to boost performance.
It is targeting $35 million to $50 million of net benefits in 2020 from these actions. It anticipates the initiatives will generate $150 million or more of net benefit in the next three years.
In contrast to North America, the company has been intentionally building its position in Mexico and Latin America. This has included the acquisition of the Nueva Fanal facility n Mexico City as well as the joint venture at the IVC plant in northern Mexico.
“We are very pleased with the Nueva Fanal acquisition and recent expansion efforts in South America. Both of these efforts increased our presence in the premium beer segment,” Mr Lopez said.
“We're seeing incremental volume in Mexico. Mexico is exporting in 2020 to various countries in Americas and in Europe, and that is supporting our volumes. “
It has also increased its sales in Brazil and volumes in Colombia.
Mr Lopez said: “When we look at Europe, we are expecting solid demand in this region. Beer is expected to be quite strong because we are going to enjoy the new capacity.
“Wine is expected to be slightly positive for the year. The demand in wine in Italy is very strong. France is a little softer, but it's still at a very good level of demand.”