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AMCOR LtdCorporate Profile
Disclaimer: The information contained in this profile have been taken from sources believed to be reliable. BWC does not claim that the views of the sources quoted are accurate or complete and should not be relied on as such. Investment conclusions reached as a result of reading this profile are those of the reader. BWC makes no claim to giving market advice. |
COMPANY BACKGROUNDThe past 20 months have been tumultuous for the paper and packaging giant AMCOR. The first signs of trouble came in May 1997 when news that AMCOR's profits for the half year were unimpressive. In July AMCOR announced that they would have to rationalise and cut $100 million from their entire operations, with the recycled board mill at Broadford being the 'first head on the corporate chopping block' with 120 retrenchments. In early July came the news that AMCOR would launch anti-dumping action against 14 countries that export high quality coated papers into Australia. In late August AMCOR then announced to the world their worst ever financial performance, a net loss of $80.1 million caused largely by writedowns totalling $A323.4 million and the bottoming out of world paper prices. In September AMCOR announced that the current 9.6% rate of return on businesses was clearly unacceptable and that they would expect all businesses to achieve a 15% rate of return within 3 years or be sold.Early October saw credit agency Standard & Poor's warn that unless AMCOR showed improved performances within 12 months it would downgrade its outlook on AMCOR from stable to negative. This was followed in late October when SBC Warburg downgraded its recommendation on AMCOR from positive to neutral. These factors, along with the $80.1 million loss, helped AMCOR's share price plummet over $2 in the space of several weeks. AMCOR's share price took a further tumble (to a then record low of $6.46) in mid December when statistics were revealed showing a blow out in international pulp stockpiles. AMCOR also revealed plans to sell $300 million worth of assets by mid 1998 and that AMCOR Printing Papers would be a separate financial entity in the new year. In late November AMCOR announced that it had recently won 22 anti-dumping actions against importers of coated paper and that the undisclosed tariff levels would certainly boost AMCOR's profits. Scapegoats for AMCOR's dire financial dilemma were soon found. On January 10 CEO Don MacFarlane resigned after 41 years with the company and a $2 million dollar pay out. 10 days later, two long serving AMCOR men Garry Ringwood (head of corporate operations) and Chris Nixon (head of Containers Packaging) resigned. In early April, after a few months in limbo, AMCOR selected the head of their packaging division for the past 2 years, Russell Jones as the new CEO. Broking giant Merril Lynch welcomed the news by tagging AMCOR stock neutral in the medium term and accumulate in the longer term. AMCOR received some good news in late April when they won a case to maintain protection against the dumping of A4 copy paper from Indonesia. The Customs Minister, Mr Warren Truss rejected a recommendation from the Anti Dumping Authority to lift price guarantees from the Indonesian company Tjiwi Kimia. (Noone mentioned though that Spicers Paper (AMCOR holds a 42% share) is the largest importer of Indonesian paper in Australia and already imported paper from Tjiwi Kimia). In early May the Federal Government said that it would act against 4 countries accused of dumping quality paper products in Australia. The decision came after an extensive inquiry uncovered allegations that 31 companies dumped coated woodfree paper on to the domestic market. AMCOR's share price had its first significant improvement in late May with the news that price increases in cardboard boxes and photocopy paper would soon eventuate. Early June 1998 saw the closure of AMCOR's Burnie pulp mill with the loss of at least 200 jobs. This was part of the plan to switch all photocopy paper to the new M5 paper machine at Maryvale, while making more complicated paper types at the Burnie paper mill. It was also revealed that AMCOR would stop buying pulp from North Forest Products in Tasmania and would import pulp from Indonesia as a replacement. By late August, Jones was confident that AMCOR had at last turned the corner and would be poised for moderate profit growth. AMCOR by this stage had closed dozens of plants and merged the operations of others in the past year or so. Plans to sell off $300 million worth of assets by the end of 1998 were reduced to $250 million. Also worth noting that AMCOR hoped to lift returns from its paper business by 12% by late 2000 (not 15% as earlier thought) and returns from the packaging businesses of 15%. More bad news emerged in early September when Standard & Poor's cut AMCOR's credit rating and placed it on watch, probably partly due to AMCOR's announcement one week earlier of a less than expected profit increase of 18.1%. Mid September saw AMCOR announce a share buy back due to shares reaching an all time low of $5.72. Standard & Poor's then cut AMCOR's rating for the second time in a month in late September from A- to BBB+. In late October AMCOR announced a 11% rise in first quarter earnings and share prices began to increase during the later quarter of the year. The Australian Competition and Consumer Commission in early December announced that both AMCOR and Visy would have to face the federal court over collusion in the recycled paper market. Moody's Investor Service following Standard and Poor's lead by downgrading AMCOR's credit rating in December. This decision had little impact on AMCOR's share price however reaching $7.32 by the 23rd of January 1999, a $1.60 gain since mid September. Late January 1999 saw AMCOR announce the selling of their fibre packaging operations in Britain and France for $380 million, while in early March with their share price moving over the $8 mark for the first time since October 1997, AMCOR announced that they had achieved a 12% rise in first half earnings and predicted solid growth in the second half. They also rewarded shareholders with a higher interim dividend.
Russell Haydn Jones BCom (Melb) Managing Director and CEO AMCOR Ltd since 1998. Managing Director AMCOR Packaging 1998, Fibre Packaging 1996-97. Former Chief Executive ACI Packaging Group. Tel: (03) 9226 9000 - Fax: (03) 9226 9050. David Edward Meiklejohn BCom (Qld), DipEd (Qld), FCPA, FAIM. Born Jan 22 1942, Maryborough Qld. Educated: Maryborough Boys High School, University of Queensland. Executive Director Finance and Administration AMCOR Limited, Chief Financial Officer since 1981. Joined AMCOR 1966. Director since 1985. Chairman Kimberly Clark Australia. Director Treasury Corporation of Victoria. Director Colonial Ltd. Director Spicers Paper Ltd. Member General Committee MCC. Member Financial Committee Murdoch Research Institute into Birth Defects. Tel: (03) 9694 9000 - Fax: (03) 9686 2924. Address: AMCOR Limited, Southgate-Tower East, 40 City Road, South Melbourne, Vic 3205. Bert Guy Company Secretary, AMCOR Ltd. General Manager Comm. AMCOR Paper Group Tel: (03) 9226 9037 - Fax: (03) 9226 9064. Elizabeth Anne Alexander AM 1990, BCom, FCA, FCPA, FAIM. Daughter of W Alexander. Educated: University of Melbourne. Partner Price Waterhouse since 1977. President Australian Institute of Company Directors in Victoria since 1997, Member Victorian Council since 1985. Member Federal Government National Commission of Audit 1996. Director AMCOR since April 1994. Director BORAL Ltd. Member Australian Accounting Standards Board 1992-95. Director CSL Ltd since 1991. National President Australian Society of Certified Practising Accountants 1988-89, State President Victorian Division Council 1984. Member Council of the Australian Defence Force Academy since 1985. Member ASC Corporations and Securities Panel since 1991. Former Director Gas & Fuel Corporation of Victoria 1986-89. Member Small Business Council of Australia 1984-87. Councillor University of Melbourne1984-87. Commissioner Australian Film Commission 1981-84. Veuve Clicquot Business Woman of the Year 1982. Tel: (03) 9666 6228 - Fax: (03) 9666 6009 - Address: Price Waterhouse, Level 6, 215 Spring Street, Melbourne, Vic, 3000. David Charles Keith Allen AO 1990, MA, MSc (Geophysics), LLD (Hon) Monash, DIC, FAIM, FAICD Son of GK Allen, born April 3 1936 - Hannow England. Eductated: Oundle School (UK), Corpus Christie College (Cantab.), Royal School of Mines, Imperial College (London). Chairman CSIRO since 1996. Director National Bank since 1992. Director Australian Gas Light and Co Ltd since 1996. Director AMCOR Ltd since 1996. Director Earthwatch Australia Ltd Managing Director Woodside Petroleum Ltd 1982-96, Executive Director 1980-82. Divisional Manager Western Division Shell-BP Nigeria 1977-79, Operations Manager 1975-77, Area Geologist Middle East shell International Petroleum Maatschappij, The Hague 1974-75, Chief Geophysicist Shell Exploration and Petroleum London 1971-74, Professional Geophysicist Shell Holland, NZ, Turkey, Nigeria 1961-71. Australian Institute Energy Medal 1992. Former President Australian Mines and Metal Association. Former Vice President Confederation of Australian Industry 1997. Tel: (03) 9662 7430 - Fax: (03) 9662 7470. Address: CSIRO Level 9, 60 Collins Street, Melbourne, Vic 3000. Tommie Carl-Erik Bergman Chairman and Managing Director, Asea Brown Boveri Pty Ltd since 1991. Director AMCOR Ltd since 1997. Director Atlas Copco Australia Pty Ltd. Chairman ABB Power Generation Ltd, former Managing Director ABB Co. Portugal, India and Singapore, President ABB Industrial Systems Inc. USA, Member US Executive Management, senior positions ABB (Aust) 1970's. Tel: (02) 9356 0998 Fax: (02) 9356 0991 Address: Asea Brown Boveri Pty Ltd, Level 20 Gold Fields House, 1 Alfred Street, Sydney, NSW 2000. Ross Cameron BCom. Son of F Cameron, born June 13 1931. Educated: Geelong Grammar School, University of Melbourne. Director AMCOR since 1988. Former Managing Director Containers Packaging 1986 to 1993, Group General Manager Containers Ltd 1978-86. Joined Containers Ltd Group in 1954. Director McPherson's Ltd. Director Yarra Valley Water Ltd President Packaging Council of Australia Tel: (03) 9428 4994. Neil Rex (Nobby) Clark AO 1991, BCom, FCPA, FBIA. Son of RH Clark, born July 9 1929, Belmore NSW. Education: Homebush Boys High School (NSW), UNSW. Chairman Coles Myer Ltd 1995-97. Chairman Ashton Mining Ltd since 1994. Deputy Chairman Western Australian Diamond Trust. Director AMCOR Ltd since 1993. Former Chairman State Bank South Australia (resigned 1994). Former Director Mayne Nickless Ltd (resigned 1996). Director BORAL Ltd (resigned 1993). Chairman Foster's Brewing Group Ltd 1990-95. Former Chairman Sun Alliance Holdings Ltd. Former Director Santos Ltd. Former Director IBM Asia/Pacific Group Graduate School Management Ltd. Consultant National Australia Bank 1990-91, Chief Executive 1985-90, Director National Nominess 27/685 - 1/10/90, Chief General Manager 1984-85, General Manager Retail Banking and Finance National Australia Bank 1981-84, Chief Manager Special Duties 1980, State Manager South Australia 1979, Chief Administration Officer EDP and Systems 1976, Assistant State Manager NSW 1974, Personnel Manager 1973. Council for Equal Opportunity in Employment Ltd. Institute of Public Affairs Rodney (Rod) Turner Halstead LLB (Hons) Sydney, LLM London. Partner Clayton Utz, Partner ic M & A Clayton Utz since 1993. Director AMCOR since April 1994. Director BORAL since 1991. Former Senior Partner Mallesons Stephen Jaques, Chairman 1991-92. Tel: (02) 9353 4126 - Fax: (02) 9231 7832 - Address: Level 27-35, 1 O'Connell Street, Sydney, NSW, 2000. Brian Thorley Loton AC 1989, BMetE, FIE Aust, MAusIMM Son of Sir Thorley Loton, born May 17 1929 - Perth. Educated: Hale School Perth, University of Melbourne. Chairman Atlas Copco Australia Pty Ltd since 1996. Director Hoechst Australia Ltd since 1996. Director Australian Foundation Investment Co Ltd since 1993. Chairman BHP 1992-97, Deputy Chairman 1991-92, Deputy Chairman and CEO 1989-91, Managing Director 1982-91, Chief General Manager 1977-82, Executive General Manager Steel Division 1973, General Manager Newcastle Steelworks 1970, General Manager Planning and Development 1969, Assistand Chief Engineer 1961, Technical Assistant to Production Superintendant 1959, joined as cadet in 1954. Director AMCOR since 1992. Joint Vice Chairman National Bank since 1992, Director since 1988. Member IBM Asia Pacific Board 1990-94. President Business Council 1990-92, Past President 1992. Member International Iron and Steel Institute, Chairman 1991-92. Vice Chairman Defence Industry Committee 1984-88. Member Manufacturing Council 1977-81. Senior Member and International Counsellot The Conference Board. Awarded Order of Industry Service by South Korea 1992. Institute of Public Affairs Address: GPO Box 86A Melbourne Victoria 3001. Zygmunt Edward SwitkowskiBSc, PhD (Nuclear Physics) (Melb). Born: June 21, 1948, Rheine Germany, settled Australia 1949. Educated: St. Bernards College (Essendon), University of Melbourne. Group Managing Director, Business and International Division, Telstra Corporation Ltd, since 1997. Former Chief Executive Officer Optus Communications Pty Ltd and former Chairman Optus Vision Pty Ltd 1996-97. Former Chairman and Managing Director Kodak (Australasia) Pty Ltd 1992-96, Deputy Managing Director 1988-92, Director Business Planning Eastman Kodak Co. NY 1985-88, Marketing Manager Consumer Products 1983-85, Sales Manager 1982-83, Manager Research and Development 1980-82, Senior Research Scientist 1978-80.. Director AMCOR Ltd since July 1995. Group Managing Director Telstra. Chairman Advisory Council on Industrial Property. Chairman Australian Quality Council. Member Business Council of Australia. Work Ethic: "Following T.Q.M. and the principle of continuous improvement" Tel: (03) 9634 1111 - Fax: (03) 9634 8826 - Address: Telstra Corporation Ltd, 242 Exhibition Street, Melbourne, Vic 3000. Peter Stewart Cairns General Manager Corporate Affairs, AMCOR Containers Packaging 679 Victoria Street, Abbotsford Vic, 3067 Ph: (03) 9229 3320 BCom, MCom (Prelim) General Manager Corporate Affairs since 1985. Son of KS Cairns, born August 4, 1941. Educated: MCEGS, University Melbourne. Princ. Peter Cairns and Associates 1982-84 Director Public Relations ANZ Banking Co. 1974-82 Economist The Herald Melbourne 1968-74, financial journalist 1963-74 Louis John Lachal Group General Manager Commercial Operations Peter J Brown Managing Director AMCOR Fibre Packaging Australasia David M Goldthorpe Managing Director, Containers Packaging Australasia 971 Burke Road, Camberwell Victoria, 3124 Ph: (03) 9811 7111 Fax: (03) 9811 7171 Gordon Anthonisz General Manager Spicers Paper, Spicers Paper Ltd, 44 Raglan Street, Preston, Vic 3072. Ph: (03) 9487 8888 Fax: (03) 9416 8157 Mobile: 0412 224949. General Manager Spicers Paper since 1997. Son of George Kingsley and Malvinna Esme. Born: December 13 , 1957, Kandy, Sri Lanka, settled Australia 1965. Educated: Christian Brothers (Lewisham), UNE State Manager NSW and ACT Spicers Paper 1993-97, WA 1990-93, Sales Manager NSW and ACT 1985-89, Marketing Services Manager 1984-5, Sales Rep 1980-84, Trainee Cadet 1979-80.
In regards to Maryvale, prior to July 1998 AMCOR imported bleached long fibre mainly from New Zealand (radiata pine probably supplied by Fletcher Challenge) and the west coast of North America. Since July AMCOR has to import bleached short fibre from South America (most likely Brazil), Thailand and Indonesia although noone from the company would elaborate on the companies supplying the fibre, although they are more than likely to be the same companies supplying AMCOR's Tasmanian mills.
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INSIDE
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AMCOR LTD679 Victoria StreetAbbotsford, Victoria PO Box 1643N Melbourne, Victoria 3001 Tel: (03) 9694 9000 Fax (03) 9686 2924 Internet: http://www.AMCOR.com.au Activities : Packaging, pulp and paper, trading and distribution, tissues and personel care products, investment. Former name : APM Ltd. |
AMCOR Printing Paper Group685 Burke Road,Camberwell, Vic 3124 PO Box 811, Camberwell, Vic 3124 Ph: (03) 9811 9811 Fax: (03) 9811 9836 Internet: http://www.apg.com.au Activities: Forestry, pulp and paper manufacture, paper merchanting. Trading Names: Australian Paper Subsidiaries: AMCOR Envelopes, Dalton Fine Papers, Tomasetti Paper House Group Parent: AMCOR Ltd. Staff: 3700 Ian M Wightwick Managing Director Darryl Abotomey Group General Manager Commercial John B Tompkins General Manager Human Resources Ian R Howard Group General Manager Sales and Marketing Australian Paper Jeff D Landels Group General Manager Maryvale Mill Australian Paper Greg R Court General Manager Sales and Marketing Australian Paper |
Spicers and APPAMCOR has 42% interest in Spicers Paper. Spicers paper are the largest distributors of the Indonesian photocopy paper in Australia.Consolidated Paper Industries and Commonwealth Paper also sell this paper in Australia. Popular brands include Victory, Crown, Pacesetter and Alpine. Spicers deaals mainly with Asia Pulp Paper (APP). APP paper is sourced mainly from tropical rainforests and acacia plantations with the additional pulp coming from Scandanavia. Main mills include Perewang in Sumatra and Serang, Pindo Deli and Twjiwi Kimia on the island of Java. APP's aim is to be the largest supplier of paper products in Australia, directly undercutting AMCOR. APP's woodfree paper capacity is scheduled to increase from about 1.5 millio tonnes at the end of 1997 to 4.2 million tonnes by the end of 1999. APP has almost 60 paper machines in 17 mills making pulp, graphic paper, packaging, tissue etc through Indonesia, Malaysia and China.
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AMCOR has an agreement with the Victorian State Government to gain access to native forest fibre until the year 2030. Most of this is supplied from the Central Highlands region of Victoria and the southern Gippsland region of Victoria. Interestingly AMCOR most likely sources woodchips from forests held by Hancock Victorian Plantations, who have long raised the ire of Strezlecki conservationists because of the appalling logging practices of Victorian Plantation Corporation who were granted 40 000 hectares of forest lands in the Strezlecki Ranges in 1993, 20 000 of which is native forest including old growth and cool temperate rainforest. Hancock, a subsidiary of an American insurance company John Hancock Mutual Life Insurance Company, purchased VPC in November 1998. The Planthard Mill (owned by the Thomas P Clarke group of companies) sources 100 000 cubic metres of Hancock owned Strezlecki timber each year. Marketed as 'Planthard' and sourced supposedly from 'plantation grown sources in the Strezleckis', the mill generates a 40% log recovery, meaning that over 40 000 cubic metres of woodchips would be generated by this $20 million 'value adding' mill, most likely making their way to the Maryvale mill). It should also be pointed out that current timber harvesting of AMCOR's plantations located in the Strezleckis is far from satisfactory and is having devastating impacts upon the environs of South Gippsland and the Strezlecki Ranges. Kimberly-Clark (50% owned by AMCOR) was sourcing approximately 40 000 tonnes of woodchips from the Otways region in southern Victoria until December 1998, but now relies on native forests from the Central Highlands (as does the Maryvale mill) and plantations for its tissue fibre. AMCOR also relies on Melbourne's water catchments for some of its fibre needs, most notably the Thomson and more recently the Armstrong Catchment will be targeted for logging). Also of interest is AMCOR's 42% stake in Spicers Paper, who incidently are Australia's largest importer of Indonesian paper. The following information is a brief overview of issues confronting AMCOR and the procurement of wood fibre across the world to feed its paper machines. (There is no information as yet about AMCOR procurement of fibre from North America and New Zealand, but we're working on it). For another review of other environmental factors facing AMCOR please read the AMCOR Corporate Profile published by Native Forest Network in September 1997.
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