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Amcor to acquire flexible packaging operations of Chinese company

Australian packaging company Amcor has announced an agreement to acquire the flexible packaging operations of China-based Jiangsu Shenda Group for CNY350m ($57m).

Following the acquisition of the business, which has sales of about CNY440m ($72m), Amcor is claimed to have a strong position in both film manufacturing as well as conversion.

According to Amcor, the acquired business, which has two plants in the Jiangsu province in Eastern China, is a strong fit with its existing plant in Jiangsu province. Two thirds of its sales are to the pharmaceutical, snacks and culinary end markets.

The acquisition will also enable sharing of overheads, optimization of production across the sites and operating improvements through sharing of best practice. The opportunities are expected to deliver cost synergy benefits in excess of 5% of sales.

Amcor managing director and CEO Ken MacKenzie said continued strong growth in consumer spending makes China one of the attractive markets globally.

"Amcor has a strong and successful position in the Chinese flexible packaging market with nine plants, covering all the key regions and sales of over A$400 million," MacKenzie said.

The agreement, which is subject to regulatory and other usual conditions, is expected to close in the coming months.