"Glass is also more eco-friendly than other materials, benefiting Owens-Illinois (NYSE: OI), the world's largest supplier of glass containers," says quantitiative analyst Vahan Janjigian, editor of The Forbes Growth Investor.

"The company's bottles are used for beer, wine, liquor, tea, juice, food, and pharmaceuticals. Major customers include Anheuser-Busch, SAB Miller, Molson Coors, Diageo, PepsiCo, H.J. Heinz, and Heineken.

"Glass containers offer several advantages over alternatives such as aluminum and plastic. They preserve purity and flavor, they are infinitely recyclable, and there is no shortage of raw materials.

"Glass is also cost-efficient for the customer, which is particularly important in developing countries where containers are often reused and refilled 30-50 times before being recycled.

"OI hired a new CEO in December 2006 and quickly announced plans to explore strategic options for its plastics packaging business. In 2007, the company sold the business, which accounted for 10% of net sales, for $1.8 billion. It used the proceeds to reduce its debt load to $3.7 billion.

"At the risk of lower volumes, management adopted a strategy of raising prices in an effort to improve profitability. Pro forma net income jumped to $493.7 million or $2.94 per share, from $173.2 million or 98 cents per share in 2006.

"Net sales grew 13.8% to $7.57 billion, thanks to higher prices, greater volumes, a more favorable sales mix, and currency gains.

"Risks remain despite OI's promising outlook. For example, asbestos liability reserves may prove insufficient to cover all future claims. And price increase may depress volumes more than anticipated.

"OI's global operational review and restructuring activities will continue through the beginning of 2009. These initiatives should offset any near term input cost inflation.

"Meanwhile, customers appear willing to absorb higher prices because they recognize the value glass containers offer. Glass is also more eco-friendly than other materials, which could cause demand to rise as more consumers become environmentally conscious."

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