Growth continues as CPMC overcomes the impact of Covid in China

Leading Chinese canmaker CPMC continued its growth in 2022 with record sales and profits, even though it had been impacted by the resurgence of Covid-19, market volatilities and the turbulent global situation.

Sales revenue rose to 10.25 billion yuan (US$1.48bn), 7.2% up on the previous year, while net profit grew 5.2% to 486.5m yuan ($70.4m), the company reported in its annual report.

CPMC’s chairman Zhang Xin said that in the face of unexpected factors the canmaker continued to coordinate and firmly grasp its production and operation, epidemic prevention and control, and safe production.

“In the first half of the year, the canmaking industry suffered from the impacts of Covid-19 resurgence, rising economic downward pressure, weak downstream demand and fluctuations in raw material costs,” Zhang said. “In the second half of the year, although there were volatilities in consumption due to Covid-19 the overall trend stabilised and improved, along with falling raw material prices and improving profits.

“It is believed that after the relaxation of Covid rules and opening up, consumer demand will pick up and the ‘hustle and bustle’ will reappear.”

Sales in CPMC’s aluminium packaging business – mostly beverage cans and some promotional bottles – grew by 20.3% in the year to 5.37bn yuan ($777m), but gross margin slipped from 15.5% to 12.4%.

Sales in the tinplate business – dominated by high-value cans for infant formula – slipped however by 5.6% to 4.21bn yuan ($609.5m) as the segment’s profit margin grew from 11.7% to 12.4%. The balance of the business is in plastic packaging.

Key new projects during the year included new D&I beverage can plants at Kunming and Shenyang, a milk powder can plant in the north east and steel drum plants at Fujian and Shandong.

Expansion projects were accelerated, such as the third beverage can lines at Chengdu and the easy-open ends plant at Zhenjiang and a shaped can project at Hangzhou.

CPMC’s domestic plants now stretch from north to south, covering first-tier consumer cities such as the Yangtze River Delta region and the Pearl River Delta region.

In Europe, a second line was started up at the joint-venture Benepack beverage can plant in Belgium, and the implementation of a ‘synergistic’ plant in Eastern Europe, the location of which hasn’t been identified, was said to “further enhance the group’s overseas strategic layout”.

Capital expenditure in 2022 totalled 977m yuan ($141m), of which 420m yuan $60.8m) was for two-piece beverage can plants.

Cost-saving innovations included the use of UV-LED lamps for printing on cans, and the application of low-temperature printing and coating on aluminium bottles and aluminium aerosol cans, and optimising the can washing and drying process.

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