Amcor to demerge packaging business to focus on plastics

"Although Amcor and AAPD are both packaging companies, they are actually very different in terms of product segments and geographic focus," said Amcor CEO and Managing Director Ken MacKenzie in a news release. "Amcor has global leadership positions in the flexibles and rigid plastics segments, while AAPD operates in the fiber, glass and beverage can packaging markets in Australasia and packaging distribution in North America and Australia."

MacKenzie said that for the past six years, Amcor has invested significantly in AAPD to improve its manufacturing capabilities and ensure it is well positioned for growth. These investments have been in excess of $1 billion over that period and include the new recycled paper mill at Botany, a new furnace at the glass bottle plant at Gawler and a new beverage can line in New Zealand. He said that AAPD will continue to benefit from these initiatives in terms of earnings and cash flow.

Following the demerger, each company will have its own management team and board. For Amcor, Graeme Liebelt will be the chairman and Ken MacKenzie will remain the managing director and CEO. For the new company, which is yet to be named, Chris Roberts will become the chairman, and Nigel Garrard, the current president of AAPD will be appointed CEO. John Pizzey and Jeremy Sutcliffe will also join the board of the new company. Both Amcor and the new company will be listed on the Australian Securities Exchange.

Amcor expects completion of the demerger to occur in December 2013, subject to shareholder, court and other approvals. Once the demerger is complete, Amcor will still have packaging plants in more than 40 countries with a focus on flexible and rigid.