MELBOURNE, AUSTRALIA — Australian-based global packaging company Amcor Ltd. is buying a Chinese flexible packaging business for 211 million RMB (US$31.4 million).
The sale will be finalized in the first half of 2015.
Zhongshan Tian Cai Packaging Co. Ltd. has one plant in Zhongshan, in China's Guangdong province. It has annual sales of about 280 million RMB (US$45.2 million).
Melbourne-based Amcor said in a statement that Tian Cai produces flexible packaging products for the food, beverage and pharmaceutical end markets and supplies Chinese and multinational customers.
The company was established in 1998. Its current owner is selling because Tian Cai is not a core business.
Amcor's statement said: “This acquisition will complement the existing food and beverage business and broaden Amcor's capabilities within the South China region to include pharmaceutical packaging.”
Amcor said it already is southern China's market leader, with three flexible packaging plants in the region, including one it already owns in Zhongshan. It has another seven plants in China.
Amcor managing director and CEO Ken MacKenzie said: “China is one of the most attractive markets for flexible packaging globally. The Tian Cai acquisition is a strong fit with our existing operations and provides an opportunity to further expand Amcor's customer base and product offering in the South China region.
“Amcor has a strong and successful position in the Chinese flexible packaging market with 10 operations covering all key regions and annualized sales of US$500 million.”
Tian Cai's plant is close to Amcor's Zhongshan plant. Amcor executive general manager corporate affairs John V. Murray said it is likely both plants will continue to operate.
Tian Cai's U.S. agent is Panco Packaging, in San Mateo, Calif.
Amcor's profit in the year to June 30 was A$737 million (US$602 million). Tian Cai is the first purchase by Amcor's Flexibles Asia Pacific division since it bought an Indonesian flexible packaging business, Jakarta-based Bella Prima Packaging Ltd., for A$27 million (US$22 million) in May.
Murray said Amcor plans to build a new plant in the Philippines to manufacture food and beverage packaging. He said the plant's cost has not been disclosed and Amcor is still selecting a site.