Amcor's NZ plans focus on growth

By Mark Reynolds

Australian-based packaging and paper group Amcor expects to boost its earnings from New Zealand significantly over the next few years, following a three-year restructuring of its operations here.

The refocusing involved amalgamating or closing businesses and cutting jobs, but the concentration now is very much on growth, said Amcor managing director Russell Jones.

Mr Jones was commenting following the opening of Amcor's new multi-million dollar packaging materials plant near Albany. He said further investment in New Zealand operations was planned.

One such investment will be a $A15 million ($17.8 million) steel-can plant to be built near Hamilton in association with the New Zealand Dairy Board.

It will manufacture steel can ends for Amcor both in New Zealand and Australia.

"More and more companies are seeing the New Zealand and Australian markets as one, and we need to make sure we can provide a consistent product in both countries," Mr Jones said.

While most of Amcor's packaging products were made for local exporters, there were opportunities for regional manufacturing, he said.

"We aren't going to make flat boxes and export them, but there are some things that certain parts of our operations do well and we can use that knowledge to our advantage."

In New Zealand, Amcor will concentrate on opportunities in the dairy and meat industries and will invest in further assets to support that.

Amcor already generates annual packaging sales of about $A200 million in New Zealand.

In recent years that has been boosted through greenfields developments, such as the Albany plant that makes flexible packaging and a South Auckland box plant operated by subsidiary Kiwi Packaging.

Mr Jones said the new investments had been made so Amcor could provide its clients with a full range of packaging options.

The box market, in particular, has become more competitive, with the entry into New Zealand of Australian rival Visy Board two years ago.

"Margins have been depressed and it is important now to make sure market share is maintained," Mr Jones said.

Amcor has operations throughout the world, but Mr Jones said the company was not truly global.

"We are involved in some niches but do not offer something for everyone around the world," he said.

"What we have been doing over the past 12 months is looking after our backyard," he said, explaining that the company has sold a number of operations it regarded as non-core, such as the $A380 million sale of a European box business.

"Our balance sheet is strong and ready to take advantage of growth opportunities," he said.

Amcor will report its December half-year financial results on Thursday.