As the EUR 364M Quinn Glass packaging plant at Chester moves closer towards full deployment, ratings agency Moodys may look at a downgrade in the debt rating of Ardagh Glass, Quinn's rival in the UK glass market. Moodys highlighted on 7 Feb/06 "the intensifying competitive environment in UK glass" as one reason for putting Ardagh's ratings "on review for possible downgrade". Moodys said its review would concentrate on the outlook for Ardagh's "credit metrics and free cashflow generation". The agency noted overcapacity in the UK glass container industry, which it said is expected to increase further with the full deployment of Quinn Group's new plant mid-2006. This will lead to "pricing & margin pressure", according to the rating agency. The report also noted volatility in raw material & energy costs, which Moodys argues has already damaged margins.
