The investment at Penrose will be spent on an additional energy-efficient furnace that will cater for the growing glass container market, particularly for the wine industry, the company said.
The new furnace, which will be in full operation by the second half of 2007, will increase the output of glass containers from the plant by 60 per cent.
Locally manufactured glass packaging will replace imported glass from the Middle East and Asia.
"The expansion at Penrose allows the company to broaden its market base in the Asia Pacific region by providing the market more locally manufactured glass," O-I Asia Pacific president Greg Ridder said.
O-I will use a significant amount of recycled glass currently in the waste stream for use in glass production.
The New Zealand plant was established in 1922 and operates on the original 5ha Penrose site. The plant operates two furnaces and four machines and employs 186 people.
It makes bottles for the wine, beer, spirits, carbonated soft drink, juice, and food industries.
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