Amcor flags plant closures as ‘likely’

Global packaging giant Amcor has flagged the likelihood of plant restructures and closures following its recent $450m profit impairment.

The company revealed plans to ‘streamline the organisation’ stating it will ‘likely result in the restructuring or closure of several plants in developed markets’.

Amcor’s push for global restructure comes soon after its Venezuelan operations cost a profit loss of $350m following its acquisition of flexible packaging firm Alusa, and a loss of $100m from tobacco operational restructures.

The packaging company expects to generate a pre-tax return of approximately 35 per cent on the cash invested within three years, delivering a profit before interest and tax benefit of US$40m to US$50m.

Amcor chief executive Ron Delia says the plant closures and streamline plans will focus on the company’s flexible and tobacco segments, and the changes will affect developed markets, namely in Europe.

“Amcor has strong flexible and tobacco packaging businesses in the developed markets with leading market positions which provide a solid platform for future growth. To build on that strong foundation, it is critical we continue to take decisive steps to align the organisation with market growth opportunities and customer needs,” says Delia.

“The initiatives we have announced today are important enablers of our plan to drive greater customer focus and to generate faster organic growth in our Flexibles segment.

“Combined with the benefits from the recent Alusa acquisition, the Flexibles segment is expected to deliver pre-tax earnings growth of more than US$100m over the next three years.”