Owens Illinois, a glass bottles firm, has predicted a gloomy outlook with respect to the demand due to a poor wine market in Australia.
Pending sales contracts, reportedly with Foster’s and Lion Nathan, in addition to stretched union talks have made the prospects of the Australian arm of the US bottle maker quite bleak.
Owens-Illinois chairman and CEO Albert Stroucken said the firm expects high personal savings rate and low consumer confidence would hamper further growth of the wine market in the country.
”To date, we have spent $25 million of the anticipated $50 million restructuring program in Australia. Additional activity to complete this program will be managed to ensure that further spending is offset by cost savings so that our cash-flow goals are achieved.” added Stroucken.
A slowdown in consumer spending has taken a toll on the manufacturing base in the country, with no clear hint yet on the number of jobs that could be lost if $25m more is to be spent on restructuring the local business.
Owens-Illinois had recently announced its local profitability had surged compared to the last year, though shipment levels for the Asia-Pacific dipped 6% in the quarter ended June.