Anchor Glass Secures Exclusive Supply Contract for A-B in Southeast

Anchor Glass Container Corp. (Tampa, FL) has signed an agreement with Anheuser-Busch Inc. to provide all the bottles for the brewer's Jacksonville, FL, and Cartersville, GA, breweries, beginning in January 2001. The order, which has a five-year minimum term, could increase Anchor's sales by as much as 10%, according to the company. Anticipated annual revenues from the order could amount to more than 20% of Anchor's current sales.

To meet the expanded demand from the supply contract, Anchor will invest approximately $45 million in new equipment for its Jacksonville, FL, and Warner Robins, GA, plants over the next 18 months to increase production efficiency. The two plants already devote a substantial percentage of their capacity to supplying the nearby Anheuser-Busch breweries. The modernization will make the Anchor facilities two of the most cost-competitive glass manufacturing plants in the nation, the company says.

The plants' productivity and their proximity to the breweries will help improve Anchor's profit margins significantly, says Richard Deneau, president. "This is a major step in Anchor's return to profitability," he adds.

To accommodate the expanded volume for Anheuser-Busch, Anchor will shift much of its production for other customers at Jacksonville and Warner Robins to its plants in the Northeast. Anchor plants in Salem, NJ, and Elmira, NY, which are closer to customer facilities, will take on the reassigned production. These changes, the company says, will provide further margin improvement for Anchor.

The order reflects the increasing need of market leader Anheuser-Busch for glass bottles. Beer industry sales in the United States jumped in the first quarter of 1999 and are expected to continue rising in response to the strong economy and demographic trends.

Anchor Glass Container Corp. is the third-largest manufacturer of glass containers in the United States, supplying beverage and food producers and consumer products manufacturers nationwide.