Company: SLGN
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0000849869-25-000029
Chunk: 148

Company: SILGAN HOLDINGS INC
Filing Date: 2025-02-27
Form: 10-K
Item: Item 7
Chunk 148
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 costs and a less favorable mix due to higher volumes of smaller containers for pet food markets and lower volumes of containers for fruit and vegetable markets. The decrease in volume for fruit and vegetable markets was driven by both the planned reduction in volumes by a large pack customer to reduce its working capital and severe weather in 2024 that negatively impacted and prematurely ended the fruit and vegetable packs.  For 2025, we expect that volumes for our metal containers will improve over 2024, primarily driven by growth in pet food products and improved volumes for the fruit and vegetable markets.

We have improved the market position of our custom containers business since 1987, with net sales increasing to $649.6 million in 2024, representing a compound annual growth rate of approximately 5.5 percent over that period. We achieved this improved market position primarily through strategic acquisitions as well as through organic growth. The custom container market of the consumer goods packaging industry continues to be highly fragmented. We have focused on the segment of this market where custom design and decoration allows customers to differentiate their products such as in personal care. We may pursue further acquisition opportunities in markets where we believe that we can successfully apply our acquisition and value-added operating expertise and strategy. In 2024, net sales in our custom containers business increased 4 percent as compared to 2023 primarily due to higher volumes largely due to the commercialization of new business awards and a more favorable mix of products sold. For 2025, we expect volumes for our custom containers segment will improve over 2024 levels, primarily driven by the annualization of new business awards from 2024 as well as additional new business awards.

OPERATING PERFORMANCE

We have improved the operating performance of our plant facilities through the investment of capital for productivity improvements, manufacturing efficiencies, manufacturing cost reductions and the optimization of our manufacturing facilities footprints. Our acquisitions and investments have enabled us to rationalize plant operations and decrease overhead costs through plant closings and downsizings and to realize manufacturing efficiencies as a result of optimizing production scheduling. In late 2023, we announced a comprehensive cost reduction initiative to achieve $50 million of cost savings over the following two years from footprint rationalizations and other cost reduction actions in all of our businesses.  As part of this initiative, we have already closed three dispensing and specialty closures manufacturing facilities, two metal container manufacturing facilities and one custom container manufacturing facility to date, relocating volumes from such facilities to other facilities, and we have announced the closing of an additional custom container manufacturing facility in