Show t tI I CONTAINER SALES REBOUND REDOUND The overall profits picture for major firms within the container container container con con- industry is expected to improve considerably during 1976 Several leading gl glass ss container companies may well attain record earnings and profits for most can producers will also climb although they are not likely to exceed the all time highs of 1974 Profits gains will result from Increasing sales in food and particularly beer and soft drinks better control over costs costs' and in the case of bottle manufacturing companies wider penetration of the market RECENT HISTORY By the end of 1974 the container container container con con- industry had seen over six months of near-capacity near production to meet heavy demand from the beer and soft drink fields caused by anticipated anticipated anticipated an an- price increases While most container firms reported attractive earnings in In 1974 demand had sunk to painfully low levels by the first quarter of 1975 Beverage price hikes especially in soft drinks as a result of higher sugar costs had hada a disastrous impact on the soft drink market As As' the situation worsened beer and soft drink makers were forced to liquidate excessive and costly easily container inventories thereby exerting additional downward pressure on sagging container sales Can and bottle companies quickly attacked the problem through widespread consolidation Outdated machinery was replaced nonprofit able operations discontinued and production efficiency and raw material use improved BETTER BEITER COST CONTROL Aggravated by low demand rivalry between glass and metal containers stimulated efforts on the part of producers to redu reduce e total operating costs Modern macI machinery nery cut back Jabor abor and raw Taw materi material materia J requirements and raised productivity Manufacture of ot cheaper seamless cans was was greatly expanded Also bottle makers sought I high gh volume customers usually breweries to reduce set up costs costs' by scheduling long production runs As beverage sales began increasing during the second quarter of 1975 the numerous saving cost-saving alterations implemented by container manufacturers manufacturers' q quickly began to pay payoff off TilE THE INCREASINGLY POPULAR BOTTLE Since container sales started to improve in mid 1975 bottles have captured d a larger share of the market at the expense of cans This profitable penetration can be explained chiefly by the lower price of or bottles compared to cans of comparable size t Furthermore the design of a bottle permits ex extensive ex extensive variability in container size and usage Basic raw materials used in turning out outs our glass lime bottles-lime soda ash and silica sand-all sand appear to be in abundant supply and subject only to limited price hikes SECURITY RECOMMENDATIONS With improving sales and better control over costs pointing to better earnings it is the opinion of the Research Department of Babson's Reports that the securities of such industry leaders as American Can Continental Group and Owens Illinois warrant retention For Investors seeking representation in the glass glass' container sector Babson's is currently recommending purchase of Anchor Hocking flocking a aleader aleader aleader leader in the production of glass dinnerware as well as glass containers which should post record sales and earnings in 1976 Babson's is also recommending recommending mending for purchase the common stock of National Can Canin Canin canin in the metal container sector The firm is out front domestically and internationally in Uy In two-piece two aluminum and steel can technology and is the Industry's in in U third rd largest producer of metal containers Record breaking domestic and foreign sales are expected for tt this s corporation when final tally is made for 1976 1916 Pers Persons ns wishing ng to receive at no to cost a more detailed rep report rt on either or both of these companies may write to Babson's Reports Inc Wellesley Hills Mass |