09.05.2003

Mandatory deposit: Ball Packaging Europe plans to extend short-time working

State Prime Minister Kurt Beck visits Weißenthurm beverage can plant

On the occasion of the visit by State Prime Minister Kurt Beck to the Ball Packaging Europe (formerly Schmalbach-Lubeca) beverage can plant at Weißenthurm, the company's management emphasised the dramatic effects of the current transitional mandatory deposit regulations for one-way packaging.

Because a mandatory deposit was introduced against the interests of the consumer, despite the fact that no nationwide returns system yet exists, Ball Packaging Europe has recorded substantial drops in sales since 1^st January 2003. While the capacity utilisation in the four German can plants could improve to some 35 to 40 percent in mid-year with the beginning of the summer season, no clear reverse of the current trend is in sight. For the first half of the year alone, the company expects losses of sales of some € 100 million. Short-time working was initially introduced for some 1,000 employees – of which about 500 in the Rhineland Palatinate. The company is presently negotiating with the Works Council on extending short-time working until the end of 2003, whereby capacity reductions can also not be ruled out. Apart from far-reaching cost reduction measures, Ball Packaging Europe will also cancel investment projects in Germany amounting to € 35 million, in turn financially affecting over 50 regional suppliers to the company, including craftsmen, transport companies and suppliers of paints and lacquers.

The introduction of a nationwide returns system could relieve the situation, believes the management, and lead to substantial increases in sales again. "The key points for a revision of the Packaging Directive recently published by the German Government throw up serious new problems however", explained Hanno C. Fiedler, Chairman and CEO of Ball Packaging Europe. "The inclusion of dairy packaging in the mandatory deposit system could hinder the building of a returns system as this is conceived only for one-way PET, glass and beverage cans".

Another problem is the planned quota of 80 percent of returnable and "environmentally beneficial" packaging. This concept leads to great uncertainty in terms of which types of packaging will be subject to a deposit in the future. It is also totally unclear which legally binding method should be applied to establish a classification as "environmentally beneficial". "To avoid further damage to the economy, the legislators must take measures to ensure that companies have legal and investment certainty over several years", emphasised Hanno C. Fiedler.

Forward-Looking Statements
The information in this news release contains "forward-looking" statements. Actual results or outcomes may differ materially from those expressed or implied. As time passes, the relevance and accuracy of forward-looking statements contained in this release may change. The company currently does not intend to update any particular forward-looking statement except as it deems necessary at quarterly or annual release of earnings. Please refer to the Form 10-Q filed by Ball Corporation on August 12, 2003, for a summary of key risk factors that could affect actual results or outcomes. Factors that might affect the packaging segments of the company are: fluctuation in consumer and customer demand; competitive packaging material availability, pricing and substitution; the weather; fruit, vegetable and fishing yields; company and industry productive capacity and competitive activity; lack of productivity improvement or production cost reductions; regulatory action or laws, including the German mandatory deposit or other restrictive packaging laws and environmental and workplace safety regulations; availability and cost of raw materials, energy and transportation; the ability or inability to pass on to customers changes in these costs, particularly resin, steel and aluminum; pricing and ability or inability to sell scrap; international business risks (including foreign exchange rates and tax rates) particularly in the United States, Europe and in developing countries such as China and Brazil; and the effect of LIFO accounting on earnings. Factors that may affect the aerospace segment are: funding, authorization and availability of government contracts and the nature and continuation of those contracts; and technical uncertainty associated with aerospace segment contracts. Factors that could affect the company as a whole include those listed plus: successful and unsuccessful acquisitions, joint ventures or divestitures and the integration activities associated therewith including the integration and operation of the business of Schmalbach-Lubeca AG, now known as Ball Packaging Europe; the inability to purchase the company's common stock; insufficient or reduced cash flow; regulatory action or laws including those related to corporate governance and financial reporting, regulations and standards; actual and estimated business consolidation and investment costs and the net realizable value of assets associated with these activities; goodwill impairment; changes in generally accepted accounting principles or their interpretation; litigation; antitrust, intellectual property, consumer and other issues; strikes; boycotts; increases in various employee benefits and labor costs, specifically pension, medical and health care costs incurred in the countries in which Ball has operations; rates of return projected and earned on assets of the company's defined benefit retirement plans; interest rates and level of company debt, including floating rate debt; terrorist activities, war or catastrophic events that disrupt or impact production, supply or pricing of the company's goods and services, including raw materials and energy costs, or disrupt or impact the credit and financing of the company's businesses; and U.S. and foreign economic conditions.

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