Amcor Ltd, the Australian global packaging company, is considering closing four European plants and intends to cut European staff by up to 15% as part of an overhaul of its newly merged European flexi…
Amcor Ltd, the Australian global packaging company, is considering closing four European plants and intends to cut European staff by up to 15% as part of an overhaul of its newly merged European flexibles business. The company also said that volumes for the merged business, Amcor Flexibles Europe, were ahead of budget and higher than in the same period last year. Amcor Flexibles Europe was formed in April through a merger of Amcor“s flexible packaging operations with those of Danish food retailer Danisco Flexible and Sweden“s Akerlund & Rausing. Russell Jones, Amcor“s managing director, said that Amcor Flexibles Europe would increase some prices across Europe. He claimed that Amcor Flexibles Europe, 67% owned by Amcor, was on target to achieve cost reductions and synergy benefits of A$ 70 million over three years. With 40 plants in 14 countries and sales of around A$ 2 billion, Amcor Flexibles Europe is to be the new market leader in flexible packaging in Europe. Amcor was considering closing four Amcor Flexibles Europe plants and rationalizing another three. A restructuring of the sales and administration functions was already underway and was expected to result in the closure of a significant number of sales and administration offices. Jones said he expected a 15% reduction of the 6,600 employees of Amcor Flexibles Europe – or about 900 staff. A reduction in sales volumes of less than 10% was expected from various initiatives implemented but Amcor was confident that the overall impact would be positive for earnings. According to Jones, significant progress had been made in confirming the areas of cost reductions and synergy benefits and Amcor was on schedule to achieve benefits at the targeted levels of A$ 70 million over three years and A$ 28 million in the first year. Amcor remained confident that the impact of the European merger would be earnings per share positive in the current year, although most of the benefits from the restructuring programme were expected to accrue in the second half.