According to Australia's 2020 ASX index, consumer packaging manufacturer Amcor is the 16th largest business in its exchange
Since its origins as the first paper mill in Melbourne, Amcor has grown into a giant business within the global packaging industry.
The firm – which according to the 2020 ASX index is the 16th largest business in its exchange – develops, amongst other things, flexible packaging, rigid containers, specialty cartons, and closures and services.
In the 12 months between June 2019 and June 2020, the company reported net sales of $12.9bn – and, as of August 2020, had a market capitalisation on the ASX index of 26.4bn Australian dollars (A$) ($18.9bn).
We take a look at the past, present and future of one of the biggest packaging businesses in the world.
History of Amcor
The company’s history can go back to the 1860s when a Yorkshireman by the name of Samuel Ramsden arrived in Australia, going on to establish the state of Victoria’s first paper mill company in Melbourne.
By 1896, the business had grown and owned combined mills in Melbourne, Broadford and Geelong, with it called the Australian Paper Mills Company.
In the 1910s and 1920s, Australian Paper Mills entered a period of expansion – doubling in size within the first 30 years of that century.
In 1920, the business amalgamated with Sydney Paper Mills to form the Australian Paper and Pulp Company – with an amalgamation with the Australasian Paper Pulp Company in 1926 creating the Australian Paper Manufacturers (APM).
The pulp and papermaking arm of Amcor continues to operate under this name to the present day.
In the 1970s and 1980s, the firm added a range of packaging interests to its papermaking activities – with partnerships and strategic acquisitions, expanding and diversifying its activities.
The business adopted its current Amcor name – which was designed to reflect its “much broader range of interests” – in May 1986.
A few years later, it bought Twinpack, the largest plastics container producer in Canada – with the acquisition accounting for a significant proportion of the 32% increase in containers packaging sales in the 1989-1990 financial year.
In 1993, Amcor made a move to consolidate its rapidly expanding holdings into its three main divisions.
These were its Container Packaging division – mainly responsible for the production of plastic and metal containers – Amcor Fibre Packaging, and the Amcor Paper Group.
In 2010 the business unveiled its new global brand to reflect the birth of “new Amcor”, with a green and blue colour change to its branding signifying its commitment to sustainable practices.
Nine years later, Amcor acquired flexible packaging firm the Bemis Company for $6.8bn – with the combination creating one of the worlds’ biggest consumer packaging businesses.
What does Amcor do?
Based on sales, by far and away the biggest money generator for Amcor is its flexible packaging division – making the company $10.8bn between June 2019 and June 2020, or about 78% of its total net sales.
Part of the money earned from this side of the business – $1.1bn worth – came from its specialty flexible folding cartons.
The firm says these help leading companies differentiate their products and increase sales because of their “premium look”.
The rest of the sales made by the flexible packaging division – $8.6bn – is split between its flexible beverage, food, healthcare, home care, personal care, pet care and technical application products.
The rest of its global sales – 22% or $2.8bn between June 2019 and June 2020 – is made of its rigid packaging items.
This includes the rigid plastics part of the business, which supplies products to the food, beverage, spirits, personal care, home care and healthcare industries.
Between June 2019 and June 2020, 47% of its sales were made in North America, 24% in western Europe, 26% in what it describes as emerging markets, and 3% in Australia and New Zealand.
As of June 2020, the company employs approximately 47,000 people and has 231 principal manufacturing facilities in more than 40 countries.
Its current CEO and managing director is Ron Delia – who went to Amcor in 2005 after a five-year spell as an associate principal at consultancy McKinsey & Company.
He joined as an executive vice president of corporate operations, ascending to his current role ten years later – following on from a four-year spell as the firm’s chief financial officer.
How Amcor as a business is looking to make itself more sustainable
In January 2018, Amcor pledged to make all its packaging recyclable or reusable by 2025, also committing to significantly increase its use of recycled materials and driving more recycling of packaging around the world.
Speaking at the time, Delia said: “Our aspiration is to be the leading global packaging company.
“That means winning on behalf of the environment, customers, consumers, shareholders and our people at the same time, in ways that differentiate Amcor and generate growth.”
The action saw the company join ten leading brands and retail companies making the same 2025 commitment – in collaboration with the Ellen MacArthur Foundation.
Later that year, it furthered its commitment by becoming one of the first signatories of the Ellen MacArthur Foundation’s New Plastics Economy Global Commitment.
In a 2019 review, Amcor outlined three sustainability goals, the first being to make all of its packaging to be recyclable or reusable by 2025.
It calculated at the time that approximately 97% of its rigid packaging was recyclable, with it “actively supporting solutions” that will improve recycling for flexible packaging and recycling systems.
Its second goal saw the firm commit to achieving a 10% use of post-consumer recycled (PCR) materials across Amcor’s global portfolio by 2025 – and, as of the end of the 2019 financial year, 5.6% of its PET resins were PCR materials.
The third target the company outlined is to work with others to drive greater packaging recycling worldwide, driven through its continued to work with global organisations like the Ellen MacArthur Foundation, Ocean Conservancy and the Earthwatch Institute.
What Amcor as a business has done during the Covid-19 pandemic
Like many, Amcor as a business has been impacted and has had to adjust during the Covid-19 pandemic.
Its plants do still continue to operate, with the firm taking a range of precautions to make sure its staff are as safe as possible.
These include global and regional response teams in contact with authorities and experts to manage the situation, significantly restricted travel that prioritise the safety of people, and quarantine protocols for employees who may have had exposure or symptoms to Covid-19.
Alongside this, it has identified further ways in which Amcor can make a difference in its communities.
In June 2020, the firm announced it had donated one million of its ULTRA and BOP sterilisation pouches to help fight against the pandemic, delivering them to hospitals in Bulgaria, Romania and Ukraine.
Outlining why the donations were needed, the World Federation for Hospital Sterilisation Sciences’ Dr Christine Denis said: “This donation will provide supplies to our colleagues working in hospital sterilisation departments as they support frontline services.”
The aim of the donation was to help assist hospitals in meeting heightened demand for sterilised medical equipment.