Amcor Ltd., Australia“s largest packaging company, said on 30 May that it would sell its US-based flexibles operation and record a AUD 16 million loss on the transaction.
Amcor said in a statement t…
Amcor Ltd., Australia“s largest packaging company, said on 30 May that it would sell its US-based flexibles operation and record a AUD 16 million loss on the transaction. Amcor said in a statement that Amcor Flexibles, Inc. had failed to deliver its target of 15% profit before interest and tax, or PBIT, on average funds employed. Mercury Flexibles, Inc. is purchasing Amcor Flexibles for an undisclosed sum. “The operation in the US has experienced a difficult 12 months, with rising raw material prices and a lack of scale impacting our ability to deliver satisfactory returns,” Amcor Managing Director Russell Jones said in a statement. “Our strategic objective is to be a leading participant in all the markets in which we operate, and this business was not an appropriate base from which to grow.” Jones noted that Amcor remains committed to the flexible packaging industry globally and wants to grow its operations in the US via “appropriate scale and technology in the future.” Amcor Flexibles was purchased in 1994 and has incurred operating losses this current fiscal year. The company said Stevens Packaging, Amcor“s other flexible packaging business in the US, is operating profitably and although small, has the process know-how and product technology to deliver ongoing growth and satisfactory returns. The move to divest Amcor Flexibles follows the company“s recent decision to tip its European flexible packaging assets into a three-way merger, in which Amcor will have a controlling stake.