Reynolds Metal Co. said today it will spend $60 million on new facilities for its packaging division.
About $16 million will be sent on new plants in Virginia including $12 million at Reynold's facility in Richmond, $2 million at its printing plant in Bellwood and $1.8 million at the Grottoes.
Another $39 million will build a new aluminum rolling mill near Hot Springs, Ark., to provide raw materials for the company's Virginia plants.
The investment will allow Reynolds' packaging division to maintain a 6 to 8 per cent growth rate through the 1980s, said Paul Murph, vice president and general manager of the division. The packaging division make aluminum foils, plastic films, laminated packages, and other materials but not cans, which are manufactured by a separate division.
A major growth factor for Reynolds packaging, company executives said, will be a new product called the "flex-can." A pouch made of a laminated aluminum and plastic, the "flex-can can be used to prepare, store and cook foods like a conventional tin can.
This first products using the new package, which is technically describe as a "retortable pouch," are convenience foods now being test-marketed by a division of International Telephone and Telegraph.
David A. Heintz, marketing director, estimated that use of the flexible can grow to 221 million units per year within five years.
Reynolds said it will pay for the expansion of its packaging division with part of the $60 million recieved from a new stock offering earlier this year, and with some borrowed and internally generated funds.
Part of the money will finance extensive energy conservation efforts designed to reduce the amount of electricity and natural gas used by the company.By 1985 the company's Richmond plants will no longer use any natural gas, said W. J. Vogel, general manager of the packaging division. He said gas will be replaced by electricity, oil and, to a limited extent, coal
The new Arkansas rolling mill also is an energy saver. It will be built adjacent to a Reynolds reduction plant and will utilize molten metal, saving the cost of melting down ingots. The company said its total energy-saving efforts would allow it to produce 48 per cent more products with the same amount of energy.
The Arkansas plant, which will create about 130 new jobs, the same number as the expansion in Virginia, will supply about half the raw material needed by the Virginia plants. Eventually that plant will double its capacity to supply all the basic materials for the Virginia operations. Reynolds also is expanding its plants at Louisville, Ky., and St. Louis, Mo.
As they announced their expansion plans, Reynolds officials predicted the use of aluninum in packaging will increase by nearly 13 per cent in 1977.
Richard G. Holder, vice-president of Reynolds Aluminum sales, said the packaging business would grow from 2.6 billion pounds to 2.9 billion pounds this year.
All-aluminum cans will capture 67 per cent of the beer market thus year, up from 60 per cent in 1976, and should increase their share of the soft drink can market from 22 to 28 per cent, Holder said.
"The use of aluminum in packaging may approach 4 billion pounds in 1982," Holder said, with tin cans and foil for the food-processing industry leading the growth.