Posts Tagged ‘energy’

  • $10m power bill hike for Pact

    Packaging manufacturer Pact Group, chaired by billionaire Raphael Geminder, suffered a sharp drop in its share price after posting an 18% fall in profit despite a 13% rise in revenue for the year ending June 2018.

    ‘Challenged by the macro environment’: PACT CEO Malcolm Bundey.

    Group sales revenue of $1,674 million increased 13% or $199 million compared to the pcp. Statutory profit was 18% lower at $74 million, with net profit (before significant items) down 5% to $95 million. Pact Group shares fell by more than 20% at the close of trading yesterday.

    “The Group delivered solid organic growth in the contract manufacturing, sustainability and infrastructure sectors and improved rigid packaging volumes into the health and wellness sector,” Pact told the ASX. “This was partly offset by lower materials handling volumes, due to raw material shortages following a major supplier plant outage across May and June, and lower rigid packaging volumes, impacted by a major customer plant closure in the dairy sector, and drought conditions in the agricultural sector.”

    Pact MD and CEO Malcolm Bundey, said: “Our strategic growth initiatives have performed well, with revenue and earnings in line with expectations. Integration of our acquisition in Asia is on schedule and our Australian crate pooling business is fully commissioned and operating in line with expectations. We have been challenged by the macro environment, and this is reflected in our earnings.

    Raw material input costs, especially the rising price of resin, have been challenging, Bundey said. “Whilst we have disciplined raw material cost recovery mechanisms across our business, earnings have been adversely impacted by time lags.

    “Energy prices in Australia also increased sharply in the second half and, as we anticipated, recovering these additional costs has been difficult. Consequently, our earnings reflect significant unrecovered energy costs.”

    Pact said its Australian energy costs jumped 40% in the second half of the financial year, representing an increase of $10 million.

    “Against these headwinds, we have been strongly focused on driving efficiency,” Bundey said. “We have delivered improvements in the business through our operational excellence programs and we have commenced transformation of our rigid packaging network.

    “Our diversified portfolio has mitigated the impact of volume softness in some sectors. Solid organic growth in the contract manufacturing, sustainability and infrastructure sectors offset the impact of lower materials handling and rigid packaging volumes in the period. We expect to achieve higher revenue and earnings in FY2019, subject to global economic conditions.”

    Pact also announced the $122 million acquisition of TIC Retail Accessories (TIC), a closed loop plastic garment hanger and accessories re-use business. The deal is expected to be completed in October 2018.

    TIC, established in 1989, has “transformed the garment hanger industry,” eliminating significant waste from single-use plastic hangers and accessories by pioneering a closed loop re-use program.

    TIC’s re-use program supplies plastic garment hangers and accessories to garment manufacturers. The hangers and accessories are collected after sales from retail stores, sorted and then distributed back to the garment manufacturers for re-use. The program significantly reduces waste in the supply chain, with re-use rates of up to 80%.

    “The acquisition of TIC is a unique opportunity to further leverage our demonstrated capability in closed loop asset pooling and plastics manufacturing,” said Bundey. “TIC adds scale to our portfolio and expands our Asian platform. TIC’s sustainability agenda is strongly aligned with the Group’s commitment to providing innovative ways to assist our customers to meet their sustainability objectives.”

    Pact Group Holdings Ltd (PGH) is a manufacturer of packaging and other products with 64 manufacturing plants across Australia, New Zealand, Asia and USA. PGH converts primarily rigid plastic, resin and steel into packaging and related products that service customers in the food, dairy, beverage, chemical, agricultural, industrial and other sectors.



  • PIAA slams NEG as disaster

    The PIAA has slammed the federal government’s proposed national energy guarantee (NEG) as a debacle which will do nothing to alleviate the ongoing energy crisis.

    Andrew Macaulay, CEO PIAA.

    Meeting this morning the Board and CEO Andrew Macaulay discussed the NEG, with Macaulay coming out of the meeting saying, “We agreed that the proposed NEG is a disaster for print and packaging manufacturers, and for all manufacturing industry. The NEG is only a potential long term remedy that in the meantime will send print manufacturing offshore, never to return.

    “The government is playing politics while industry is facing sky high energy costs and inconsistent supply. Two states Queensland and Victoria are unlikely to agree to it anyway, they want high renewables and emissions targets. It is a debacle.”

    The PIAA has been fighting for an immediate fix to the energy crisis, and wants the government to invest in dispatchable energy, power that is affordable and reliable. Macaulay says, “The NEG, if it ever gets off the ground is at least three years away, meanwhile we are seeing the states close down coal fired power stations in favour of solar and wind, which are unreliable, and when not delivering cause the price of power to skyrocket.

    “The government has to listen to manufacturing if it wants to keep it in this country. This is not a debate about sustainables, it is a debate about the viability of industry, jobs and the future well being of the nation. Industry is technology agnostic, we don’t care where the power comes from, as long as it is affordable and consistent.

    “We are in a ludicrous situation where the most resource rich nation in the world is paying the highest energy prices, it is a very serious situation, which the proposed NEG will do nothing to address, it is a wasted opportunity.”

    What Australian printers pay for power varies for state to state but typically SA printers pay the most at more than three times what their peers in the US and Canada pay, with printers in NSW, Queensland and Victoria paying two to three times the price of North American printers.



  • Australian Paper’s radical solution to power crisis

    Australian Paper’s mill at Maryvale, VIC.

    Australia’s only manufacturer of office, printing and packaging papers plans to build a $600 million power plant that would burn household rubbish to power its Maryvale paper mill and sell excess energy back to the grid.

    Australian Paper says the Energy from Waste project would be built next to its Maryvale facility in Victoria’s Latrobe Valley and would burn hundreds of thousands of tonnes of non-hazardous household rubbish to generate 225 megawatts of electricity. 

    The company has received $5 million in state and federal funding to conduct a feasibility study of the project and says it could go ahead within five years, if approved.

    The plant, which would replace two existing gas-fired boilers, would divert an estimated 650,000 tonnes of waste from landfill each year. It would not burn recyclables.

    “One of our immediate priorities is to stabilise our costs and one of the most significant focus areas is energy,” Australian Paper says in a statement. “Despite being Victoria’s largest generator of baseload renewable energy, we are the largest industrial user of natural gas in Victoria and also use significant quantities of coal-fired electricity. Like any other business or household in Australia, we are exposed to surges in energy prices and uncertainty of supply.

    “Australian Paper is proposing to develop a 225-megawatt thermal Energy from Waste (EfW) plant adjacent to the existing AP Maryvale Pulp and Paper Mill site on land owned by AP in the Latrobe Valley, Victoria. The aim of the proposed $600m EfW plant is to allow AP to attain a sustainable, long-term and stable alternative base load energy source to provide steam and electricity for the existing Maryvale Mill, which has been manufacturing paper since 1938.”

    From Australian Paper’s website.

    The company says the benefits of the scheme will include helping to secure the future of the Maryvale Mill – a key employer in the region with approximately 850 staff – and supporting an estimated 1,600 fulltime equivalent (FTE) jobs during the construction phase and 440 FTE jobs during the operational phase (direct and flow on) in Victoria.

    It would also cut greenhouse gas emissions by approximately 550,000 tonnes per year, which would be the equivalent of taking more than 100,000 cars off the road.

    “We want to address our future energy needs proactively, which is why we are carrying out a comprehensive Energy from Waste (EfW) feasibility study,” says the company.

    The study is expected to conclude in mid-2018.

    Australian Paper is owned by Japanese-based Nippon Paper Group, one of the 10 largest companies in the global forest, paper and packaging industry, with more than 20 paper mills in Japan and business interests in Asia, Oceania, North and South America and Europe. Australian Paper is Nippon Paper’s largest investment outside Japan.