The company, which plans to increase the percentage of its manufacturing in Southern and Eastern Europe, says the primary objective of the repositioning is “to create a fitter organisation with a smaller number of stronger businesses that are focussed on customers and markets, consistent with Amcor's strategy”. The project is forecast to deliver an estimated annual profit-before-interest-and taxation benefit of €30m at an estimated net cash cost of €60m. By its conclusion one third of the business's factories will be in Southern and Eastern Europe. The precise extent of the job losses will be determined after an “extensive consultation process with a range of stakeholders”.
As outlined in its half-year results in February, Amcor Flexibles has undertaken a detailed strategic and operational review of its business and developed what it is dubbing a “comprehensive repositioning programme”. Its primary objectives include: “strengthening market positions through better leverage of technology and manufacturing capabilities”; “increasing weighting in lower cost regions”; “improving alignment to customer needs and market trends”, and “creating a strong platform for innovation and continued growth”.
Amcor Flexibles currently has 38 European plants in 15 countries, with seven plants in southern Europe and one in both Poland and Russia.
Once the plant closure proposals have been prepared by local management, they will be presented to employees and their representatives for consultation in line with local and European legal requirements. Operationally the re-structuring envisages a substantial reduction in the number of extrusion plants, while the number of factories with flexo or gravure printing facilities will be cut too.
As a key part of the “re-weighting” towards Eastern and Southern Europe Amcor Flexibles has announced it is to build a €26m Polish plant for PepsiCo, supplying flexible packaging for the brand owner's fast-growing Eastern European snackfood business. Amcor is currently an approved strategic supplier to PepsiCo in both Europe and Australia.
Amcor md and ceo Ken Mackenzie says: “This repositioning programme delivers a wide range of improvements and better aligns the business to future market trends and customer needs. With this improved operational focus and clearer strategic direction the business will be well-positioned to deliver solid growth and strong returns.”
