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$468m hit for packager Amcor

Thursday, 09 June 2016
By Print21
‘It’s critical we continue to take decisive steps’: Amcor CEO Ron Delia

ASX-listed global packaging giant Amcor will take a hit of more than $US350 million ($A468m) due to foreign exchange losses and the restructuring of its tobacco packaging business.

Amcor has announced a $US350 million impairment for the year ending 30 June because of foreign exchange losses in its rigid plastics business in Venezuela following the collapse in oil prices and the Venezuelan currency.

The company also says the restructuring of its tobacco packaging unit will take a further $US70 million to $US100 million over the next few years.

In a statement to the ASX, Amcor says it will restructure or close several plants in developed markets, and streamline operations in Europe in order to improve its cost base and align capacity with demand.

“It’s critical we continue to take decisive steps to align the organisation with market growth opportunities and customer needs,” says Amcor CEO Ron Delia. “Amcor invests in emerging markets with a long term view and for more than 20 years, talented local management teams have consistently delivered strong earnings and returns from these operations. We have more than 80 plants across 27 different emerging countries and from time to time we are faced with challenges in individual countries. However, we firmly believe in the long term attractiveness, and in our ability to deliver value, from emerging markets.

“In Venezuela, Amcor has six Rigid Plastics plants, almost 20 years of experience, an excellent local management team and a strong joint venture partner we remain committed to. Today we have announced a proactive and conservative accounting change for this business. This will eliminate risk and allow us to focus on the many opportunities we have within emerging markets, including in the Latin American region.”

 

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