Cott Corporation

10550 Words43 Pages
1. General Economic Outlook Cott Corporation earned its revenue mainly from United States, Canada and U.K. Its revenue from these countries accounted for 97.83% and 98.62% in 2003 and 2002 respectively. However, the company tends to increase its operation in Mexico as a result of its acquisition in….. Therefore, our discussion will be based on 4 countries as mentioned above. 1.1 Global Economic Outlook From economic in bubble stage in 2000 to the adverse effects of the September 11, 2001 terrorists attack on the U.S and the subsequent wars in Afghanistan and Iraq, the SARS outbreak in Canada and China in 2001-3. Over the past year, the global recovery has become increasingly well established, with global GDP growth now…show more content…
Therefore, we do not anticipate that the average consumers ' level of real income will decrease much over the next 5 years. Exchange rate We present percent change year over year of period average in exchange rate of local currency to US$. We believe this indicator is important as Cott corporation 's revenue and operation are in other countries apart from United States. The exchange rate will affect the financial performance of the company and directly affect the consolidated financial statement because the result has to convert to US. dollar. As shown in the figure…, Both Canada and United Kingdom currencies will continually appreciate against US. dollar. Implication for Cott Based on the general indicator it would seem as though in the short term the economy is growing from the recession with a high level of real GDP growth of 5%. However, with the continuously increase in oil price may hold the overall economy from going well as expected. Moreover, the exchange rate for both UK and Canada that continuously appreciate against US may affect consumption by consumer and the operation of the company. Overall, we expect that the economic will grow at stable rate with relatively increase for the next 5 years. Beverage and bottling industry For beverage and bottling industry, the cost of acquiring and converting aluminum and PET resin constitutes the majority of bottlers ' packaging costs. Packaging costs represent approximately 45% of
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