Amcor managing director Ken MacKenzie has revealed that the group is aiming to close or sell six of its European film extrusion plants as part of the group's ongoing restructure.
In his address to the Australian plastics specialists' annual general meeting this morning, he said that the number of extrusion production sites would be reduced from nine to three, while a £20m (A$47m) upgrade programme would be implemented at the remaining sites.
MacKenzie said that the sales of two plants in the UK and one in Sweden to management — most recently, the sale of AF Camvac — had been motivated by the fact that they did "not meet strategic requirements" because they "predominantly supplied unprinted commodity films and were located in high-cost regions".
He said that by the end of the restructure, which has also included the consolidation of its two UK plants into one, the business would have larger and more focused plants.
He added that the European business would "be in a substantially stronger position to be a leader in improving the value proposition to customers via product innovation, improved quality and enhanced service".
European investment has also included building a new £20m plant in Poland dedicated to PepsiCo’s snack business, while another £17m is being invested in the Polish flexibles business.
Meanwhile, tobacco packaging, a major part of Amcor’s business, is being given a £23m face-lift through expansions in Russia and Poland and a new plant in Ukraine. Other worldwide investments outlined by MacKenzie have included:
- £61m on a new wine glass bottle furnace in south Australia
- £39m to increase Amcor’s stake in Chinese tobacco carton manufacturer AMVIG from 35% to 40%
- £102m in the PET business across the globe over the last three years
- £95m on a new recycled paper mill in Botany, New South Wales, Australia that is due to come on-stream by October 2010
Elsewhere in his address, MacKenzie revealed that in the last three years, since the start of his 'The Way Forward' restructuring programme, no fewer than 60 of the company’s 77 top managers have changed.
He also said that the weakness of the Australian dollar was likely to benefit the group’s figures, adding AUS$3m of profit after tax for every one-cent downward movement against the US dollar.
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