Lars Emilson, chief executive of the world's largest beverage can manufacturer said the move to build "wall-to-wall" plant is a result of the company's exclusive contract to produce cans for the Red Bull high energy drink. The company recently announced the extension of the contract.
"Beverage can making capacity in Europe is very tight and we have seen it stretched to its limits recently," he said in a statement today. "We believe that this situation is likely to continue, given the good growth prospects."
The new wall-to-wall can making plant will be close to Red Bull's contract filling partner Rauch's, which has a plant in Nüziders, Austria. The company expects to spend £45m (€66m) over 2006 and 2007 building it.
When operations begin at the end of 2007, the plant will be used solely to meet the anticipated growth projected for Red Bull.
Rexam's have been fuelled by by the huge demand in the energy drinks market. Rexam is the sole supplier of cans for Red Bull, an energy drinks manufacturer that uses a slim can to package its product.
Last year Rexam put its beverage can plant in Gelsenkirchen, Germany back in operation after it was converted to produce the slim cans. The plant was refitted to meet the growing global demand for the product after being initially mothballed.
The company said then it would build more capacity for aluminium beverage cans production in Europe, away from steel in response to consumer demand.
The company anticipates it will need to make further investments in the German market as new deposit legislation comes into effect in mid 2006.
Beverage cans make up about 69 per cent of the company's sales. Glass packaging makes up another 12.7 per cent, beauty and pharma 13.5 per cent and plastic containers another five per cent of global sales.