Our business model
Rexam is a global manufacturer of beverage cans, the vast majority of which are made of aluminium. We make a broad range of can sizes for products such as carbonated soft drinks, beer, energy drinks and other drinks categories.
We make approximately 66bn cans a year at 56 plants in five continents. We are part of a supply chain that stretches from ore mining to the consumption of beverages from cans (and their recycling) by the consumer. Within that chain, we have direct control over the manufacture of beverage cans and ends and the financial, human and intellectual capital to make this viable. Our business model (below) is underpinned by clear and consistently applied frameworks for enterprise risk management, including governance and sustainable development.
Our core skill lies in converting sheet metal into beverage cans and that is where we can generate sustainable competitive advantage and where we create the vast majority of our value. We invest in assets to convert metal sheet into cans and in most cases assume the risk of converting aluminium ingot into coil. Our success and ability to create value relies on high utilisation of our can making lines and our ability to convert metal sheet into finished beverage cans and ends as sustainably as possible at the lowest delivered cost.
We focus on operational excellence using six sigma and lean principles across our operations and processes to reduce cost and material usage, all the while ensuring the safety and wellbeing of our people.
We are key strategic partners for most of our major suppliers who include aluminium, energy, chemical, machinery and freight companies. Aluminium represents almost 60% of our annual cost base from continuing operations, some £2bn annually. We source our metal from well established global aluminium suppliers. While we largely derisk the procurement of aluminium ingot with pass through clauses in customer contracts or long term agreements with suppliers backed by appropriate hedging, we are exposed to cost increases in the metal premiums.
We work closely with all our suppliers to codevelop innovative processes and products to help reduce our material usage or take advantage of the advances in can making technology to complement the work we are already doing in this area.
Our aim is to build strong and mutually beneficial relationships with our customers to ensure that we are the preferred can supplier. Cost leadership is essential and the location of our can making network relative to our customers’ filling locations is important in minimising logistics and freight costs. Larger customers are moving to global procurement models and, as part of our response, we have global key account management for core global customers to further align ourselves with them.
The complexity of our business is growing with the proliferation of different can sizes and finishes, and shorter product runs. The ability to deliver at low cost in such an environment will become a prime capability. Innovation in products and processes, and our close understanding of the trends affecting our customers, are also critical differentiating factors in shaping our future.
People and capabilities
We have a highly skilled and motivated workforce, most of whom work in plants. We invest in training and development to help employees achieve their full potential and make sure they have the engineering, technical and commercial skills to help us remain competitive and match the needs of our customers.We aim to attract and retain top talent by making Rexam a great place to work where people from all backgrounds can develop their careers and feel rewarded for what they do.