Ardagh to halt production at two US glass factories

Ardagh Group plans to close a glass bottle manufacturing plant in Texas and temporarily halt production at another site in Washington, affecting almost 500 jobs as it seeks to rein in costs amid a decline in demand.

The group, which Irish financier Paul Coulson has built into one of the world’s leading glass and metal packaging businesses over the past quarter of a century, has informed workers at its Houston, Texas beer glass facility that it will close, bringing 220 job losses.

A further 224 employees face temporary lay-offs at the company’s Seattle, Washington wine bottle-making plan.

Ardagh disclosed in April that its group revenue declined to $2.17 billion (€2.03 billion) in the first quarter from $2.27 billion for the same period last year, while earnings before interest, tax, depreciation and amortisation (ebitda) fell to $254 million from $339 million, driven by declines in its glass bottle making business as drinks companies cut back orders to run down packaging supplies.

The downturn in glass bottle demand comes as brewers increase their focus on using aluminium cans, given they are cheaper, lighter and less expensive to transport, according to industry observers.

The closures come after Ardagh last year accelerated a planned shuttering of two other US bottle plants, in North Carolina and Louisiana, as it dealt with a slump in demand for Bud Light. Its owner Anheuser-Busch InBev’s use of transgender TikToker Dylan Mulvaney to promote the then top-selling US beer prompted a boycott of the brand.

Declining earnings have heightened market concerns about the burden of the group’s $12.3 billion debt mountain.

Ardagh said in April it was looking at “all options” to address the debt pile, ultimately carried by a company at the top of its corporate tree, ARD Finance, and which equates to 9.6 times ebitda.

Ardagh, which traces its roots to the long-since closed glass bottle factory in Dublin’s Ringsend, has been turned by Mr Coulson into a packaging giant through a series of debt-fuelled acquisitions.

He stood down as executive chairman late last year but remains on the board and holds an effective 36 per cent stake.

The group is targeting earnings growth for the year as a whole, amid hopes of improving demand, especially in the second half of the year.