The strategic importance of aluminium encourages Diageo to invest in new UK capacity

June 8, 2023

1 mins read

Aluminium is one of the most sustainable and recyclable materials, making it attractive to various industries. Aluminium is becoming more important as companies seek to minimise their carbon footprint. This is also reflected in the price movements relative to plastic. In the EU, can prices in May were 16% lower year-on-year (y-o-y), while aluminium foil prices fell by 15% y-o-y. Over the same period, prices for PET fell by 31%.

According to the International Aluminium Institute, the consumption of aluminium packaging materials will grow by 46% by 2030. Aluminium packaging is an eco-efficient alternative to plastic and can be fully recycled and reused without loss of quality. Additionally, aluminium packaging has a significantly lower carbon footprint, which is highly relevant globally.

Diageo, one of the world's leading manufacturers of alcoholic beverages, has decided to expand its business into aluminium production, announcing an investment with the British Aluminium Consortium for Advanced Alloys (BACALL). The new investment will fund the construction of a facility to process and produce aluminium flat products, which would be capable of producing over 400 million cans of Guinness and pre-mixed Gordon's gin and tonic.

With this investment, the company plans to use its facilities to produce aluminium products, thus improving the production chain and reducing dependence on third-party suppliers. The new plant will process aluminium scrap, which is now mainly exported from the UK. In addition, the processing of aluminium scrap uses up to 95% less energy than primary aluminium production, which is important for the economical use of the country's energy resources.

According to trade statistics, 1.3 million tonnes of aluminium products were imported into the UK in 2022, of which 467,000 tonnes were aluminium flat products mainly from Europe (60%) and China (14%). The demand for the metal in the UK is high and the construction of a plant is necessary to cover the country's own needs for aluminium products.

Topics: Metals & Ores
Artem Segen

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