Australian packaging company Amcor Ltd. has fleshed out details of plans to rationalize its European flexible packaging operations. The restructuring will cut 900 of Amcor's current 7,600 European jobs.
Amcor Chief Executive Officer Ken MacKenzie foreshadowed the restructuring in February, when he announced plans to sell Amcor's European PET blow molding business and establish a new flexibles plant in Poland.
In an April 24 news release, MacKenzie said the aim is to shift more of the company's manufacturing operations to lower-cost regions in southern and Eastern Europe. He said the plan will cost about 60 million euros (US$81.5 million), but will deliver annual savings of about 30 million euros (US$40.7 million) beginning in 2009.
MacKenzie said Amcor currently has 38 plants in 15 European countries, with seven plants already in southern Europe, Spain, Italy and Portugal.
While not quantifying the number of plants to close, he said that, by the end of the process, one-third of Amcor's European manufacturing sites will be in the lower-cost regions.
``There will be a smaller number of more focused sites with improved operating performance,'' he said. ``The geographic presence in Eastern and southern Europe will increase. These are regions where Amcor already has an excellent footprint and management experience.''
MacKenzie said that, as part of the process, there will be a ``substantial'' reduction in the number of Amcor's extrusion plants and the number of sites with flexographic or gravure printing.
He said proposals for plant closures will be prepared by local management and, once approved, presented to employees for consultation in line with European legal requirements.
The company already has started a detailed program of communication and consultation with staff and customers.