Ardagh Glass Finance plc - Irish Stock Exchange

pan-European suppliers of soda ash. Ardagh uses as much recycled glass as possible in its production
process as this enables the other raw materials to melt at lower temperatures, thereby lowering its
energy costs and carbon emissions and prolonging furnace life.
Sand and limestone are usually supplied to the manufacturing plant from local suppliers due to the
relatively low value of the material and its high cost of transport. These materials, together with the
other minor raw materials, Ardagh uses to manufacture glass containers, have historically been readily
available on the open market in adequate supply from multiple sources, and Ardagh is not dependent
upon any single supplier. The prices of sand, limestone and other minerals used in the manufacture of
glass containers have historically been relatively stable in recent years, and Ardagh expects future price
movements to track general inflation levels in the local market.
However, for certain raw materials, there may be temporary shortages due to weather or other
factors, including disruptions in supply caused by transport or production delays.
In 2008, the prices paid for soda ash and cullet experienced increases due to changes in the
structure of the underlying market, such as cullet supply in Germany, which has had knock-on impacts
throughout continental Europe, or changes in the global supply versus demand balance, as has
happened in the case of soda ash. We are now seeing a softening in pricing, which we expect will
continue until there is an improvement in general economic conditions.
Sales and Marketing
The sales teams throughout the Group are controlled by the central management team, which is
based in Dublin, Ireland. To support the sales function and retain high levels of local service to
customers, regional sales offices are maintained in all the countries in which Ardagh operates. The
regional sales teams are supported by a central marketing team based in Dublin. Following the
successful rebranding of all the constituent elements of the glass container business in 2007 Ardagh
now trades as Ardagh Glass. The ‘‘one brand, one vision’’ ethos is now a fundamental driver across all
aspects of the glass container business. This is indispensable in supporting Ardagh’s biggest customers,
many of which are supplied on a pan-European basis. The ability to supply from multiple locations
enhances flexibility and improves customer service levels and makes Ardagh the supplier of choice for
many of the largest food and drinks businesses in Europe. Ardagh is highly attuned to the requirements
of the end users of packaging and regularly researches key trends in the market sectors to which it
supplies. This helps Ardagh plan for the possible future requirements of glass packaging and aids
strategic and commercial decision making.
Demand for glass packaging in certain sectors can be seasonal or can be affected by other
determining environmental factors, such as the summer months and the period leading up to
Christmas, unusual weather conditions over a sustained period, and major sporting events, including the
football World Cup and the Olympics.
Distribution
Ardagh uses various freight and haulage contactors across the regions in which it operates to
deliver to customer sites or warehousing facilities. In some cases, customers make their own delivery
arrangement and therefore they may purchase from Ardagh on an ex-works basis. Warehousing
facilities are situated at Ardagh’s manufacturing facilities; however, in some regions, Ardagh uses
networks of externally rented warehouses at strategic third party locations, close to major customer’s
filling operations.
73