Amcor to demerge its Australian operations Dec. 18, pending shareholder approval, into AU$2B Orora entity that will focus on Australian and New Zealand fiber, glass and beverage can packaging markets, packaging distribution in Australia and North America
NEW SOUTH WALES, Australia
October 24, 2013
– PACKAGING company Amcor is on track to deliver strong earnings growth in fiscal 2014 as it readies to demerge its Australian operations into an entity to be known as Orora.
The rebadging of Amcor's Australasian and packaging distribution business as Orora was revealed at the company's annual meeting yesterday in Melbourne.
Orora will be listed on the Australian Securities Exchange on December 18 if shareholders back the proposal at a vote nine days earlier.
The $2 billion Orora will be focused on Australian and New Zealand fibre, glass and beverage can packaging markets as well as packaging distribution in Australia and North America.
Following the demerger, Amcor will purely specialise in flexible and rigid plastic packaging and tobacco packaging for predominantly overseas markets. At yesterday's meeting, Amcor chairman Chris Roberts, who will stand down as chairman following the demerger to chair Orora, assured shareholders that Amcor would retain its Australian domicile after the demerger. ``This is our home,'' Mr Roberts said to applause.
Amcor chief executive Ken MacKenzie said Amcor's first-quarter trading was broadly in line with expectations and the company was on track to produce earnings before interest and tax in the current financial year that were materially higher than the $1.13bn recorded in fiscal 2013.
``Volumes in developed markets remain subdued and in emerging markets there continues to be good growth,'' Mr MacKenzie said.
Amcor was currently assessing several potential bolt-on acquisitions with a combined value of between $2bn and $3bn.
Mr MacKenzie also hit back at suggestions, in the wake of corruption allegation at Leighton Holdings, that multinational companies risked participating in shady deals to operate in emerging markets. ``I completely disagree (with the view that paying kickbacks are unavoidable in emerging markets). I think you have to stay very focused on your corporate governance,'' he said.
Amcor operates in 45 countries, including India, Malaysia, China and Argentina as well as countries in eastern Europe.
Corporate governance issues are not new for Amcor. In 2005 it received whistleblower protection from the Australian Consumer & Competition Commission over its participation in a cartel with fellow packaging company Visy.
All resolutions at the meeting, including the approval of the company's remuneration report, were passed on majorities of more than 90 per cent.
Amcor shares yesterday closed 3c higher at $10.66.