4/4/2011
Amcor Flexibles Asia Pacific Investor & Analyst Tour Presentations April 2011
AF Bangkok Safety Induction
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Your Safety Is Our
#1 Priority
© Amcor 2011
Slide 3
Evacuation Procedure Upon hearing the bell ring the following procedure is effective:
•
Evacuate the building by the nearest exit route which observed by illuminated exit box in an orderly manner
•
Strictly follows your escort until reach the designated emergency assembly area
•
Proceed to the designated emergency assembly area by quick walk but not run (open space in front of admin building).
•
Do not re-occupy the building unless instruction to do so by the emergency response team.
© Amcor 2011
Slide 4
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Guard gate
Rest room
Motorcycle parking lot
SAFETY POINT Waste water treatment
Image development
Guard gate
Waste Boomerang water storage
Polish master master
Toilet
Engraving
Air Washing compress room
AFB Emergency Exit
Printing
Ink
WAREHOUSE MRP office
OFFICE : nd Solvent mixing room
Chemical storage
DRY LAMINATE WAX
Cylinder storage
Curing room
HR
Bag making
Nurse room
Cylinder storage
Gas storage
CPP Office
Toilet
Maintenance
CPP
V.M.
Packing & Return goods
Film blowing
Steel shop
Toilet
Slitting
LPG LPG
Store
Laminating Finished Goods Garbage storage
Delivery Fire pump
In case you are in production building © Amcor 2011
DC office
Recreation
Toilet Pond Canteen ALCAN PACKAGING Alcan Packaging Strongpack Public Company Limited M. Kingkaew Road,Rachadhewa T. A. Bangplee Samutprakarn Tel. - - -
Major Way Minor Way
Slide 5
Guard gate
Rest room
Motorcycle parking lot
SAFETY POINT Waste water treatment
IT
MARKETING DEV. Conference Room
Toilet
MARKETING
PURCHASE TREASURY
Printing
Air Washing compress room
AFB Emergency Exit
Guard gate
Waste FINANCES water storage
Ink
WAREHOUSE MRP office
OFFICE : nd Solvent mixing room
Chemical storage
DRY LAMINATE WAX
Cylinder storage
You are here
Curing room QC Lab
Training Center
Bag making
Nurse room
Gas storage Toilet
QA PROD.
CPP Office
TSD
CPP
Steel shop
Slitting
V.M.
Film blowing
Toilet
Boiler room
LPG LPG
TQM
Packing & Return goods A/C warehouse Laminating Finished Goods Garbage storage
Delivery Fire pump
In case you are in meeting room. © Amcor 2011
DC office
Recreation
Toilet Pond Canteen
FIRE EXIT nd
floor
Rev. No.
Major Way
Rev. date
Slide 6
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Introduction & Welcome Ralf K. Wunderlich President - AFAP
Amcor Flexibles Asia Pacific
© Amcor 2011
Slide 8
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Belief Statement and Values
Taking care of each other
© Amcor 2011
Building trust through honest and ethical behaviour
Working together to make a difference
Caring for communities and the environment
Finding better ways
Slide 9
The Amcor Way
Having a common goal towards no injuries
© Amcor 2011
Creating value for shareholders through a singular focus on our customers and markets
Recognising people are our most valuable resource
Delivering improved performance with a focus on investments that achieve the best returns
Seizing the opportunity to do things smarter and leaner and look for ways to improve our business every day.
Slide 10
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The Amcor Way – Safety Safety Performance – Long Term Trend
Deliverables
• No injuries • No accidents
RCFR
• Safe workplace
4.5
4.7 4
• Safe behaviour
Processes & Programs
2.9
2.6
• Safety Standards • Risk Assessment • Behavioural Safety Audits
FY06
LTIFR
FY07
FY08
FY09
0.8
0.7
FY10
YTD FY11
3.0
1.5
KPIs
• Loss Time Injury Frequency Rate (LTIFR)
0.2
0.4
• Recordable Case Frequency Rate (RCFR) • Behaviour Audit Frequency Rate (BAFR)
© Amcor 2011
FY06
FY07
FY08
FY09
FY10
YTD FY11
The objective is always to have ZERO accidents
Slide 11
The Amcor Way – Customer & Market Deliverables
• Customer delight • Competitive advantage through
• DIFOTIS measurement
innovation • Profitable sales growth
Processes & Programs
• Value Plus (V+) • Voice of Customer (VOC) • Product Leadership & Innovation (PL&I) • Environmental Action
KPIs
• Net promoter score (NPS). • DIFOTIS
consistently applied across the AFAP business group with pleasing trends being observed • Accelerated Value + deployment across the BG to acquired sites • 85% sales coverage
• Vitality Index (% new products / total sales) • Commercial Profit Bridge Growth • V+ Impact Actions • Environmental Action Targets
© Amcor 2011
Slide 12
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The Amcor Way – Talent Deliverables
• Best people • High performance
The Amcor Way
• Engaged co-workers
Processes & Programs
• Goal setting, performance appraisals & feedback • Training & development
Outperformance Culture
• Organisation Plans • Talent Councils • Engagement survey & actions • Reward for Results
KPIs
• HR Performance Index*
Talented and Engaged Co-workers Voice of Employees
• Top Talent retention • Succession ―3 in 3‖ • Engagement ratings
© Amcor 2011
Slide 13
The Amcor Way – Capital Discipline Deliverables
• Stong operating cashflow and superior returns
• Investment directed towards growth in high-performance plants
Processes & Programs
• Capital planning & approval
• Solid working capital
process • Cash management • Working capital management
management • Strong operating cash-flow, returns on sales & funds
KPIs
• Free Cash Flow (FCF) • Capital Return on Investment
employed
(ROI) • Average Working Capital (AWC) / Sales
© Amcor 2011
Slide 14
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The Amcor Way – Low Cost Deliverables
• Advantaged cost position
• Centre-led procurement organisation driving capture of
Processes & Programs
integration synergies and
• Procure Plus (P+)
leverage across the organisation
• Continuous Improvement / LEAN
• CI activities driven by rigorous analysis, benchmarking and best KPIs
practice sharing
• Operations Profit Bridge Growth (Cost ↓ > Cost ↑) • P+ Impact Actions • SG&A / value added
© Amcor 2011
Slide 15
AFAP Executive Team German > 20 years in packaging > 1 year with Amcor
Ralf Wunderlich President, AFAP
Australian 24 years in Finance and MNCs 3 years with Amcor
Andrew Terry
Anthony Wong
VP, Finance & IT
VP&GM, China
Chinese/Australian > 25 years with leading MNCs 3 years with Amcor
Palit Limpiti Australian 23 years in Finance and Packaging 17 years with Amcor
Graeme Hazeldine
VP&GM, Thailand
VP, Sales & Marketing and Integration Javier Fernandez
Singapore 18 years in HR with leading MNCs To be on board on June 1, 2011
VP&GM, ISI VP, HR Tata Ismail
© Amcor 2011
Indonesian > 30 years with leading MNCs 1 year with Amcor
Werner Meier VP, Technical
Adrian Seath Acting GM, Singapore
American 18 years with leading MNCs, 3 years with Amcor
Spanish 12 years in packaging < 1 year with Amcor
Irene Wong
GM, Indonesia
Swiss >25 years with leading MNCs 11 years with Amcor
Thai 25 years with leading MNCs 5 years with Amcor
Ann O’Hara
Anant Gadre
VP&GM, ANZ
GM, India
Australian 20 years in Finance, Commercial and Packaging 14 years with Amcor Indian > 20 years with leading MNCs 4 years with Amcor
Slide 16
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AFAP Key Themes PROFITABLE GROWTH through LEVERAGE + FOCUS LEVERAGE OF: •
Existing footprint capacity & scale – within countries and throughout the region
•
Growth – underpinned by strong Asian organic and acquisition opportunities
•
Amcor capabilities & discipline – The Amcor Way Ma rke t
FOCUS ON: Market / segment sweet-spots
•
Key strategic and key accounts
•
Core products and new technologies
Existing Footprint Product / Technology Focus
•
Fo cu s
The Amcor Way Asia Organic Growth
s
cu
er
Fo
om st
Cu
© Amcor 2011
Slide 17
AFAP The Asian Imperative AFAP is delivering strong returns
• • •
Closed FY10 with record returns from combined business Strong foundation for synergy leverage and future growth Trend continuing through FY11
Opportunity to leverage AFAP’s unique capability in the region
• •
In reality there are few global flexibles suppliers and a small number of truly regional players There are a large number of small local competitors that are less well equipped to compete with AFAP‘s target customer base Majority of packaging is sourced locally to de-risk supply chain issues
Profitable growth imperative achieving leadership positions in markets of interest
• • •
AFAP operates in GROWTH markets underpinned by the rise of Asia‘s consumer market Further economic growth will see key markets in Asia reach consumer inflection points Customers becoming more focussed and outcomes driven in the procurement space, not necessarily price driven – sustainability, supplier consolidation, dual sourcing, e-bidding market testing
•
Rapid growth and associated key driver make certain segments more attractive than in mature markets Commodity segments in mature markets remain value segments in Asia given differing structures to respond to different market conditions and consumer preferences – heat, humidity, barrier, tear vs peel
AFAP packaging market responds to different environmental and consumption drivers
•
•
AFAP is uniquely placed to out-perform
© Amcor 2011
Slide 18
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AFAP Customer Overview Graeme Hazeldine Vice President Sales & Marketing and Integration - AFAP
Market Overview • The rise of Asia‘s consumer market provides a solid platform for flexibles growth across the region • Customers target strong growth throughout Asia • Competition is mainly local suppliers • Certain commodity segments in mature markets are value segments in Asia • Packaging structures respond to different market conditions and consumer preferences – heat, humidity, barrier, tear vs peel
© Amcor 2011
Slide 20
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Major Customer Focus • Quality & Service including food safe packaging • Product Innovation • Broad and versatile footprint across countries, region, globe • Total Cost of Ownership • Sustainability • Ethics and code of conduct • Local sourcing • Access to global trends and knowledge
© Amcor 2011
Slide 21
AFAP Sales Focus • Food , Medical, Pharma, Household & Personal Care, Industrial • ANZ, China, India, and Sth. East Asia • Leverage competitive advantage to maximise growth • MNCs and large local customers • Import /Export – inter and intra region
© Amcor 2011
Slide 22
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AFAP Sales & Marketing Focus PROFITABLE GROWTH through LEVERAGE + FOCUS FOCUS ON: • Market / segment sweet-spots • Key strategic and key accounts • Core products and new technologies Ma rke tF oc us
LEVERAGING PEOPLE, PROCESS & SYSTEMS: • Value proposition
Product / Technology Focus
• Value Plus – sales & marketing excellence
Existing Footprint The Amcor Way Asia Organic Growth
• Market segmentation • Talent - people
© Amcor 2011
us oc rF me o t s Cu
Slide 23
Value Plus and ‗The Amcor Way‘
• The Amcor Way is about our five business competencies that are the pillars for our success and is the next step in ensuring that we continue to build operational excellence and industry leading positions • Value Plus is linked to the customer and market focus capability. Our main objectives are: • Building sales and marketing excellence and our commercial capabilities – an ‗Amcor Way‘ of Sales and Marketing, and • Gaining a deeper understanding of customer and market needs. © Amcor 2011
Slide 24
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Unique Value Proposition across the Region • Global Scale and Financial Strength • Product and Process Innovation • Responsible Partner • Sustainable Packaging Solutions • Quality & Service Excellence • Experienced Local Teams • Broad Contingency Options
© Amcor 2011
Slide 25
Procure Plus & LCCS Overview Our journey towards procurement excellence Changsheng Wu Vice President Global Procure Plus & Low Cost Country Sourcing (LCCS)
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4/4/2011
Procure Plus is focused on developing an industry ‗bestin-class‘ global procurement organisation •
The ‗Amcor Way‘ is about our five business competencies that are the pillars for our success.
•
By developing effective tools, processes, capabilities and talent, the Procure Plus program aims to drive low cost and add sustainable value to Amcor, through: • Savings and cash • Secure supply & great customer service • Total Cost of Ownership and reduced complexity • Optimised systems and tools • Innovation through Supplier Relationship Management • Responsible sourcing
© Amcor 2011
Slide 27
Amcor‘s procurement operating model reflects our identified areas of responsibility by category
Lead: Corporate Procurement
Procure Plus program – The Amcor Way
•
•
• • •
• •
Lead & Coordinate: Business Groups
II. Standards
III. Communication
& Processes
& Tools
& Integration
Proc. Strategy: Aggregation, links to GEP, x-BG/Region Processes: SRM, Category Mgmt., Global Sourcing, etc.
• • •
Standards: Tools: Reporting:
Templates, MDM* Spend Database Validation, Benchmarking & Outperformance
• • •
IV. Human Resource Development
Build: ProcurePortal, etc. Integrate: Best practice sharing Communicate: Success Stories
Develop: Measure:
• •
P+. Curriculum Accreditation, P+ for Executives, Talent management
Global Indirect Categories:
•
Lead: Business Groups
I. Strategy
Category Strategy Market Research Negotiation (with BG SME‘s/Secondee‘s) Contract Management AND Ensuring BG ‗s own Implementation
Prof. Services
IT
(Legal, Consulting, HR)
(HW, SW, Services)
Sourcing (LCC)
International Travel &
Special Projects / M&A
Corporate Cards
(Value Chain Initiative, M&A DD & PMI, etc.)
Insurance
Low Cost Country
―Semi-direct‖ and Regional Indirect Categories: • • • • • •
Category Strategy Market Research Demand Specification / Mgmt. Negotiation Contract Management Realising Cost Optimisations
Secondary Packaging Utilities
Facility Mgmt.
Pre-Press
MRO, Capex
Waste Mgmt.
Logistics
Regional Telecoms
Board
Liquids
Aluminium
Other Direct
Direct Categories: • • • • • •
© Amcor 2011
Category Strategy Market Research Demand Specification / Mgmt. Negotiation Contract Management Realising Cost Optimisations
Resins
Films
PET Resin/ PET Films Paper
Slide 28
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Amcor Flexibles Asia Pacific plays a significant role on our journey • Nominated Business Group Champion to drive the Procure Plus program • Working with the global indirect procurement team to deliver global and regional category benefits • Newly established regional procurement team, to focus on regional indirect category procurement • Working collaboratively with other business groups globally to drive and leverage direct category procurement • Hosting a global centralised procurement function in Asia to drive Low Cost Country sourcing for Amcor
© Amcor 2011
Slide 29
Advanced capabilities Low cost country and global sourcing Content
LCC Assessment • Systematic analysis of opportunities to expand geographic supply base
Global
China
outside of traditional geographic supply markets • Maximize risk/value trade-offs by identifying countries with low-cost
India
Type of LCC
base and stable supply and quality
Mexico
Hungary
Regional
Type of Exports
Services
Identification of global and regional Low Cost Countries (LCC) for respective goods / services Notes:
© Amcor 2011
Czech
Manufactured Goods
specific screening of supplier industries
Poland
Vietnam Slovakia
Tools/approaches employed • Systematic macroeconomic / product
Brazil
Bubble size represents the value of exports
Slide 30
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Re-capping Procure Plus and ‗The Amcor Way‘
• We have started the journey to drive and invest in procurement excellence across all of our businesses to ensure: • We best leverage our global scale • Professionalise our procurement organisation and processes • Business compliance
© Amcor 2011
Slide 31
AFAP EHS & Technical Overview Werner Meier Vice President Technical - AFAP
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AFAP Safety – Toward Zero Incidences Safety Performance – Long Term Trend RCFR
4.7
4.5
4 2.9
FY06
LTIFR
FY07
FY08
FY09
0.8
0.7
FY10
2.6
YTD FY11
3.0
1.5
0.2
FY06
FY07
© Amcor 2011
FY08
FY09
FY10
0.4
• Zero Incidents as an achievable Vision • Safety is a journey – we are advancing well • Focus on • Leadership & Behavior • Procedures • Safe equipment • AFAP is one of leading BG in Amcor FY 11 YTD • Low Cost Countries equally engaged and performing
YTD FY11
Slide 33
AFAP EHS Strategy FY11 – Key programs overview NO INJURIES, NO PROPERTY LOSSES, MINIMIZED ENVIRONMENTAL FOOTPRINT Management & Leadership • Safety Leadership Tours • Regular Shift Talks • Risk control knowledge training for leaders
Aware & Trained Workforce • Near Miss program • First Aid analysis • Job specific Risk Control Trainings • Do-Not-Touch/MMI expansion • Employee awareness trainings • Employee involvement in HIRARC • Review & testing of safety knowledge
© Amcor 2011
Key Risk Management & Property Loss Prevention
Systems, Auditing & Reg. Compliance • Conduct triennial
• 10+ key risks control programs • Improvement program according to Roadmaps • Systematic property loss prevention program • EHS capex management • Environmental footprint reduction
Comprehensive Audits by internal professionals in all sites • Manage OCNC register and action plans • Indian sites have been certified in 2010 • Other sites‘ certifications according to needs
Slide 34
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AFAP Equipment Overview Population Upstream equipment -
> 60
Extrusion film blowers Cast film extrusion Vacuum Coating Pre-Press
Main conversion equipment
> 160
- Flexographic printing - Rotogravure printing - Various lamination & coating machines
Downstream equipment
> 300
- Bag-making - Slitting, others
LCC sourced equipment approx. 40% - Growing importance, opportunities to lower asset costs - Strong partnership with several Chinese machine makers, competitive edge - Since 2006 all new equipment CE safety certified, older equipment upgraded to acceptable safety standards © Amcor 2011
Slide 35
Continuous Improvement in AFAP • CI purpose is to add Value & keep AFAP at forefront of industry in process efficiency • CI is ―line responsibility‖ and not a separate activity • Emulate the model used for EHS & Quality • Local ownership and accountability, centrally facilitated • CI is a blend of the best characteristics of both former companies • Tools, processes and discipline of legacy Alcan model mixed combined with: • Bottom line focus of the former Amcor model • Aligned KPI system, Benchmarking, Gap Analysis and Project Management • Freedom within Boundaries • Common Purpose [value], Language, Benchmarking, Sharing, & KPI‘s • Freedom of Structure and Application appropriate to each site
© Amcor 2011
Slide 36
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Typical CI Organisation Structure Functional Report becomes Direct Report for AFAP identified High Value SWAT Projects
AFAP CI BU Leader Yellow Belt
General Manager
BU VP must release resource on request Operations Director
Full Time BB / MBB [Process Improvement]
Functional Managers Yellow or Black Belt
Other Functional Leaders
Manufacturing Leaders Black Belt
Production Manager
Department Manager
Department Leaders Black or Green Belt
Department Manager
Team Leader
Green Belt 68 Part time (11 FTE)
Team Leaders Green Belt
Team Leader
Operator
Operator
Operators Green or White Belt
Black Belt 23 Part time (6 FTE) Operator
Yellow Belt 18 Part time © Amcor 2011
Operator
Slide 37
CI Project Assignment Approach
Day to Day Problems
Smaller improvement activities driven by shop floor through informal teams and ‗influencers‘ using Kaizen.
General Manager
Projects that can be tackled using Lean Tools
More complex Higher Value projects
Operations Director
Full Time BB / MBB [Process Improvement]
Other Functional Leaders
Production Manager
Department Manager
Department Manager
Team Leader
Indicative
80% A weakness in current program with responsibility & authority to act, but the greatest opportunity for cultural change © Amcor 2011
Project selection, priority and review in consultation with AFAP CI
15% An understanding of the issues, and a knowledge of the tools generally exists but the responsibility is seen as belonging to someone else
Team Leader
Operator
Operator
Operator
Operator
AFAP CI
5% Full time BB & MBB cannot maximise the value opportunity here because they are being pulled back to the lower value issues
Slide 38
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AFAP Talent Management Irene Wong Vice President Human Resources - AFAP
Talent at Amcor
Business Strategy
Profitable Growth
Talent Strategy Employer of Choice
Partner of Choice Engagement & Retention Attracting & Developing © Amcor 2011
Slide 40
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HR Focus in Asia Pacific ... To support the organizational success through engaged co-workers and prepare organization for future growth
Diversity in Executive Leadership Team
• More Asians and Female Recruits in the team
Foster strategic & innovative thinking
• Talent Councils • Succession Planning
Culture & Climate Promote Learning Engage & Retain
Diverse, Rapid Change and Fast Growth Asian Markets
Build Local Talent Customer Focus Drive Execution
• Engagement Survey • 360 Feedback Survey • Communication Programs
Stretch Assignment & Coaching
• Talent Exchange Program
Build Organization Capability
© Amcor 2011
• SuccessFactors Implementation • Reward & Recognition Program
Slide 41
HR Strategy Moving Forward...
INTEGRATION “Get the Basics Right” Being Amcor & The Amcor Way
TRANSFORMATION “Good to Great” People Development & Leadership Pipeline
HR Tools & Systems in Place
– Continue to build strong local talent pool
Workforce Analysis & Tracking
Outperformance Culture – Coaching & Feedback
Performance Management System Talent Management System Engagement & Communication
© Amcor 2011
– Accountability & Ownership – Reward & Incentive – Employer Branding Organization Development
Slide 42
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Asian Economic Perspective Ralf K. Wunderlich President - AFAP
Asian Economic Perspective Growth Prospects in Asia There is likely to be a rapid realignment in World GDP Share over the next 5 following de-linking of emerging markets from the US market triggered by the GFC The IMF considers that a ―rebalancing‖ of demand will occur in the future a key element of which is higher consumption and lower savings in Asia and lower consumption and higher savings in the US
35
Regional Context • According to a recent OECD report, global middle class demand may grow from US$21trn to US$56trn by 2030 and with > 80% of the growth in this demand coming from Asia there will likely be major implications for existing supply chains and manufacturing investment – eg.in 2000, Asia (excl. Japan) accounted for just 10% cent of the global middle class spending; by 2040, this could reach 40% • The take off in demand for packaged products rests upon the outlook for consumer demand across developing Asia especially: China, India and ASEAN - a confluence of drivers presages a lift off in demand in all three regions—led by China • Demographics, rising income, access to consumer credit, the provision of social security, changing consumer preferences and the rise of modern retailing through Asia are all factors that will impact on this demand
15
30
25
IMA Asia
US
Euro area
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
20
2002
•
2001
•
•
IMF WEO: World Market Shares (GDP), %
Global Context
2000
•
Asia/Pacific (14)
Source: IMA Asia
Source: The Emerging Middle Class in Developing Countries, OECD Development Centre, Jan 10
© Amcor 2011
Slide 44
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Defining Growth Prospects in China … Political and Policy Issues: A stable system for leadership transition has emerged which underpins a high degree of political stability and policy continuity. After two decades of rapid transition, China‘s economic and commercial structure is stabilising which should lead to a better operating environment Market Outlook: China should sustain GDP growth at 8% or better until 2015. In this period it will start a decade long transition form investment driven demand to consumption driven demand, underpinned by 10-15% wage growth in a low inflation environment. GDP/Capita reaches US$4,000 this year which usually marks the take off point for a consumer market yet China is already the worlds largest market for many consumer goods. GDP /Capita is expected to increase to US$9000 in 2015 Demographic Trends: Population (~ 1.35 billion) will have a positive impact as the labour force continues to grow through 2015. Thereafter population aging will begin and by the early 2020s the working age population will have peaked and labour force participation growth is limited by the large nos of woman then in the workforce Income Growth: Total household consumption is forecast to double in just four years between 2010 and 2014. As some Tier 1 & 2 cities become more saturated, retailers are turning to the secondary and tertiary cities tat are also enjoying rising consumption Food Industry: China‘s food industry is among the fastest growing with output rising by over 20% annually. This is helping drive the rise in food consumption as a wider range of packaged goods becomes available to consumers
Modern Retailing Development: Despite its vast size, China‘s modern grocery market is beginning to mature with some of the major cities unable to accommodate many more large scale store openings. Nonetheless conservative forecasts of double digit growth will continue to entice foreign investment into the retail sector and fuel expansion by locals © Amcor 2011
Slide 45
Source: IMA Asia, Intercedent Asia
Defining Growth Prospects in India … Political and Policy Issues: PM Singh has made modest progress on reforms since being elected for a second 5 year term in May 2009. The slow pace reflects the broad structure of the UPA coalition that Congress leads. Whilst the UPA Coalition controls 59% of lower house seats which provides stability, policy is often hostage to small coalition partners. Moreover since it lacks a majority in the upper house it must seek the support of more minor parties Market Outlook: India is in the middle of a fixed investment boom driven by public and private spending which will help lift trend growth towards 8%. Long term consumer outlook looks good. Strong population growth (1.3% p.a.), a declining dependency curve, and robust employment growth in industry and services will boost incomes & spending Demographic Trends: (Popn ~ 1.2 billion) Unlike most countries‘ working age populations, India‘s will continue to grow- a catalyst for sustained economic growth Income Growth: Personal disposable income has been rising by 15% p.a. in recent years. Retail sales will be boosted by faster growth and inflation Food Industry: rising disposable incomes and increasing urbanisation means higher value processed foods should experience strong growth, especially with MNC investment Modern Retailing Development: Income is highly skewed between rich and poor and urban and rural populations resulting in the emergence of two distinct consumer segments. Independent retail outlets, handcarts and kiosks serve rural areas whereas in the cities supermarkets become increasingly common
© Amcor 2011
Slide 46
Source: IMA Asia, Intercedent Asia
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Defining Growth Prospects in Thailand … Political and Policy Issues: Despite apparent political calm in late 2010, political and social tensions remain pervasive in Thailand. While political risks remain relatively high, economic risks have been falling. Thailand‘s export manufacturers have ridden a surge in China and ASEAN demand and are back at full capacity. Operating conditions have improved over the last two decades as the country has grown and modernised Market Outlook: The economy rebounded in H1 2010 despite political turmoil. The strong export outlook should underpin GDP growth of 7.5% in 2010 and help sustain it at ~ 5% p.a over the next 5 years. Export growth has ensured almost full employment and provides steady growth in household incomes, which underpins growth in consumer demand Demographic Trends: (Popn ~ 64m) Population ageing: median age will climb form 30 to 40 by 2030 and the working-age population will grow boosted by higher female participation Income Growth: Households earning > US$ 5,000 p.a. grew by 9.4% p.a. from 2006 to 2010 but this may slow as rural income support policies unwind. Demand for consumer goods is strong relative to some other parts of ASEAN Food Industry: the domestic food processing industry is expanding rapidly with Thailand the largest food exporter in S.E. Asia. However food manufacturing remain s fragmented with a large number of SMEs hindering output and productivity Modern Retailing Development: The structure of the retail sector has changed in recent years as foreign retailers have entered the market and captured a large share, Growth has been driven by rising purchasing power and general economic recovery, better employment conditions, low inflation and low interest rates
© Amcor 2011
Slide 47
Source: IMA Asia, Intercedent Asia
Defining Growth Prospects in Indonesia … Political and Policy Issues: Political risk should remain low throughout President Yudhoyono‘s 2nd term to 2014. Indonesia‘s Sovereign rating is just below investment grade which provides a big incentive to push ahead with reforms to improve the rating which would lower debt costs and launch major projects. Export operations are expected to be established from 2010 onwards Market Outlook: Indonesia‘s trend growth is expected to lift to 6.7% p.a. for 2010 – 2015 (from 4.5% in 2009) which is stronger than at any time since the Asia crises in 1997. Much of this is domestically driven with steady growth in consumer and investment spending. If exports develop faster than expected then growth could increase to 8% if the government is successful in pushing through reforms. With GDP / Capital rising from US$3000 in 2010 to over US$6,000 in 2015 (assuming a stable rupiah), Indonesia has a strong emerging consumer market for low end goods and services Demographic Trends: Indonesia‘s population ( ~ 233m) is still relatively young and slowing growth in the working age population will remain positive. Overall population growth is relatively high (1.2% p.a.) but declining Income Growth: Strong economic growth means that personal disposable income in US$ terms should expand at an annual average of 7- 8% Food Industry: Foreign direct investment is considerable, encouraged and particularly evident in the country‘s emerging food processing industry, which has led to its rapid development in recent years Modern Retailing Development: Indonesia‘s new base has the means and the inclination to shop in modern retail outlets due to an attraction to convenience, environment and range of goods. Local major retailers have unveiled ambitious expansion plans while MNCs continue to grow. Jakarta is the only major city approaching saturation
© Amcor 2011
Slide 48
Source: IMA Asia, Intercedent Asia
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AFAP Business Group Overview Ralf K. Wunderlich President - AFAP
AFAP - Significant Diversity
AFAP is One Business Group but with significant diversity driven by differing market / business maturity This calls for a unique set of strategic and tactical priorities for each business unit within the leverage / focus framework Business organisation reflects diversity and focus required – P&L owned by the BU‘s – Central functional teams supporting The Amcor Way • BG strategy, synergy capture, top regional customers, V+, P+, R&D, CI and OE
ANZ
• • •
Committed and valued partner with tailored service offering Customer focus through centres of excellence New channel providing access to Pharma market
China
• •
4 distinct regional markets Single goal - profitable growth
Thailand
• •
Customer and product focus – service and innovation Leverage business model
ISI
• •
Operational excellence focus Focussed growth in chosen segments with key customers
Rest of Asia
• •
Served by import / export across region Product / source diversity
© Amcor 2011
Slide 50
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4/4/2011
AFAP – Australia & New Zealand
Medical 1%
Other 10%
Leading supplier of flexible packaging in ANZ Market Served | Business Portfolio
Household & Personal Care 5%
Food
Household and Personal Care
• • • • • •
• Nappy Bags
Salty Snack food Dairy Confectionary Dried Groceries Bakery Small goods
Medical Other • Protective Film
Food 84%
© Amcor 2011
Slide 51
Ma rke t
Fo cu s
Existing Footprint
Product / Technology Focus
ANZ Key Focus Areas
Asia Organic Growth
s cu Fo er m sto Cu
The ANZ business will be a committed & valued partner a complete offering delivered through centres of excellence. Leveraging its market focus and AFAP‘s unique customers will have access to compelling value propositions. ANZ Flexibles will also be recognised as a safety leader and an employer of choice
Vision
Focus
•
Complimentary import / export strategy offering customers unique value proposition
•
Mature application of Amcor Way disciplines Strong cash generation opportunity CI philosophy to continue to provide offset to price and inflation risks
• •
© Amcor 2011
Customers | Market
•
Centres of excellence with scaled and efficient well-capitalized sites Continuing to deliver step changes in cost
Product
Amcor Way
Asia Growth
Footprint
Leverage •
The Amcor Way
• • •
•
Product and service offering Fast-to-market with products delivering value to our customers New channel / new markets through Technichem Australia acquisition
Existing core products and new innovations capture through global R&D insights and linkages
Slide 52
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4/4/2011
AFAP China
Leading supplier of flexible packaging in China
Other 12%
Market Served | Business Portfolio Food
Pharm a & Medical 18%
HPC 15%
© Amcor 2011
Household and Personal Care
• Dairy, Milk Powder Food Products • Snacks/Biscuits 55% • Confectionary • Noodle • Health Food • Meat and Seafood • Retortable Pouch • Jelly Lidding • Milk Pouch
• • • • • •
Personal Care Hygiene Products Household Products Cosmetics Toothpaste laminate Evoh Multi-layer laminate
Pharma Medical Other
Slide 53
Ma rke t
Fo cu s
Existing Footprint
Product / Technology Focus
China Key Focus Areas
Asia Organic Growth
er m sto Cu
Focus
• • •
© Amcor 2011
Supporting import / export strategy offering customers unique value proposition
Value+ Growth capital investment CI philosopy to continue to provide offset to price and inflation risks
Customers | Market
•
Centres of excellence with scaled and efficient well-capitalized sites Integration & shared service focus to provide lower cost base
Product
Amcor Way
Asia Growth
Footprint
Leverage
•
s cu Fo
Leveraging local market knowledge and organic growth prospects and Amcor‘s world class product to grow Amcor‘s China business under a number of ―centres of excellence‖ in selected fast growing, profitable niche market segments
Vision
•
The Amcor Way
•
Core end-use segments include – Pharma, Culinary & Technical Specialty Focus end-use segments include – Medical, Confectionary, Snack, Liquid Beverage, Ready Meals Focus on MNC‘s and large local players that value delivery of promise and innovation
• •
•
Grow specialties products at dedicated plants
Slide 54
27
4/4/2011
AFAP Thailand
Pharm a 6%
Other 1%
The largest flexible packaging manufacturer in Thailand
HPC 20%
Market Served | Business Portfolio
Food 73%
© Amcor 2011
Food
Household and Personal Care
• • • • • • • •
• Personal Care • Hygiene Products • Household Products • Dental/Cosmetics Medical Pharma Other • Agricultural Products • Pet Food
Dairy, Milk Powder Products Snacks/Biscuits Confectionary Noodle Health Food Meat and Seafood Ice Cream Retortable Pouch
Slide 55
Ma rke t
Fo cu s
Existing Footprint
Product / Technology Focus
Thailand Key Focus Areas
The Amcor Way Asia Organic Growth
er m sto Cu
s cu Fo
Achieve a sustainable market leadership position in the Thailand market through organic and Vision
inorganic growth, leveraging talent and core competencies combined with superior customer service and clear product and manufacturing technology focus.
Focus
• •
•
© Amcor 2011
Leveraging existing footprint and business model
Grow existing successful export business supporting key customers Utilise knowledge of the Thai market to provide access to profitable niche enduse segments
Full suite of Amcor Way disciples applied for delivery of competitive advantage
Customers | Market
•
• •
• Product
Amcor Way
Asia Growth
Footprint
Leverage
Continuous focus on optimising portfolio in core segments Special focus on key accounts both MNC and big local customers
Developing to capture growing market trends namely High-barrier Film – ultra high barrier VM film; Special Features for single-served markets; easy-tear, anti-counterfeit; Costsaving Laminate – bi-layer structure
Slide 56
28
4/4/2011
AFAP Indonesia Pharm a 10%
AP Indonesia is one of the top 10 flexible packaging Manufacturers in Indonesia
Other 2%
Market Served | Business Portfolio Household & Personal Care 8%
Food
Household and Personal Care
• • • • • •
• Personal Care • Household Products • Car Care Products
Snacks & Biscuits Confectionary Beverages Culinary Frozen Food Dairy Products
Food 80%
© Amcor 2011
Pharma Other • Nutritional • Industrial • Chemical Products
Slide 57
AFAP India Focused Manufacturing Operations and Leading Pharma Manufacturer in the country Market Served | Business Portfolio Pharm a 43% Food 56%
Household & Personal Care 1%
© Amcor 2011
Food
Household and Personal Care
• • • • • • •
• Personal Care • Household Products • Car Care Products
Snacks & Biscuits Confectionary Noodle Beverages Culinary Frozen Food Dairy Products
Pharma
Slide 58
29
4/4/2011
India Footprint Food Flexibles
• Two plants focused in different markets, both started in 2008: •
Haridwar (greenfield) to the North focussed in Food flexibles
•
Chakan (acquired) to the south focused in Pharma flexibles
• Fully aligned with the Amcor values, starting from Safety • Strong key account relationships and operational efficiencies combined with a lean structure Pharma Flexibles
© Amcor 2011
• Talented and very committed team
Slide 59
AFAP Singapore Other Food 2% 8%
One of the leading Medical Packaging Manufacturers in South East Asia Market Served | Business Portfolio Medical
Other
•Medical Devices
•Industrial
Food •Dairy •Frozen Seafood Pharm a Medical 90% 90%
© Amcor 2011
Slide 60
30
4/4/2011
Ma
rk et
Fo
cu
s
Existing Footprint
Product / Technology Focus
ISI Key Focus Areas
Asia Organic Growth
Cu
•
© Amcor 2011
Participating in local markets (India) Supporting import / export strategy with low-cost position
Full deployment of Amcor Way initiatives
Customers | Market
Leveraging existing footprint and business, leveraging excess capacity with focused incremental investment AFAP internal supply
Product
Footprint Asia Growth Amcor Way
• •
m
er
Fo
cu
s
Focus
Leverage
•
sto
Leveraging growth afforded in the markets and operational focus in the short-term, ISI is focused on achieving sustainable profitability and deliver maximum returns providing a solid base for future market expansion. Operational focus is directed towards increasing scale, portfolio optimisation and leveraging winning customers and products
Vision
•
The Amcor Way
• • • •
India – Snacks / HPC / Pharma Indonesia – Pharma / Beverage (Aseptic Pouch) & HPC (Metallised Films) Singapore – Medical and High Barrier Films MNC and local market leader focus
• • •
India – Laminations Indonesia – Aseptic Pouch Singapore – High Barrier Films
Slide 61
AFAP Profitable Growth Levers LEVERAGE REGIONAL GROWTH PROFILE
TARGETED ACQUISITIONS
ACCELERATED GROWTH
© Amcor 2011
• Market participation strategy increase exposure to attractive segments that offer higher growth and margins and / or where AFAP has an advantaged position • Associated capital discipline targeting these positions
• Build scale • Acquire niche capability • Increase exposure to attractive segments
• Acquire business of similar scale to expand geographic footprint, capture significant synergies and offer differentiated value proposition to MNCs and major domestic customers
Slide 62
31
4/4/2011
Ma
rk et
Fo
cu
s
Existing Footprint
Product / Technology Focus
AFAP Key Focus Areas
The Amcor Way Asia Organic Growth
Cu
sto
m
er
Fo
cu
s
AFAP will be the leading Flexible Packaging business in the Asia Pacific region. We will be a committed & valued partner to our customers with a complete flexible packaging offering, leveraging our unique footprint, scale, process & systems and access to leading Amcor technology and product innovations to drive optimal returns and create value for shareholders.
Vision
By leveraging its regional footprint to provide its customers a compelling and sustainable value proposition. AFAP will also be recognised as a safety leader and an employer of choice
ANZ
• • •
Committed and valued partner with tailored service offering Customer focus through centres of excellence New channel providing access to Pharma market
China
• •
4 distinct regional markets Single goal - profitable growth
Thailand
• •
Customer and product focus – service and innovation Leverage business model
ISI
• •
Operational excellence focus Focussed growth in chosen segments with key customers
Rest of Asia
• •
Served by import / export across region Product / source diversity
© Amcor 2011
Slide 63
AFAP China Overview Anthony Wong Vice President & General Manager - China
32
4/4/2011
China BU Safety & DIFOTIS Performance Safety Performance – Long Term Trend
DIFOTIS
RCFR
DIFOTIS FY11 Target 85.4% 2.04
FY07
1.91
FY08
1.42
FY09
0.2
0.2
FY10
YTD FY11
DIFOTIS focus area of improvement for China team Currently 91% as at Mar 2011
LTIFR
0.91
0.77 0.2
FY07
FY08
FY09
0.2
0 FY10
YTD FY11
BU china has reduced RCFR and LTI FR significantly since 05/06 based on senior managements commitments and personal participation in EHS, training risk management and mitigation including Nip points, MMI, WAH, Lugo action initiatives
© Amcor 2011
Slide 65
AFAP China Business Overview No of Plants No of co-workers
7 plants & R&D Centre in Huizhou 1,874
Beijing
Key Capabilities • • • •
Chengdu
Adhesive Lamination Extrusion Lamination Slitting / Rewinding Gravure Printing
• Bag making • Blown film extrusion
Jiangyin Shanghai HO Huizhou Dequan Zhongshan
© Amcor 2011
Accreditations • ISO 9001:2000 • ISO14001 • OHSAS18001
• Lean Six Sigma • GMP, HACCP, AIB • ISO14001＆OHSAS 18001
Slide 66
33
4/4/2011
The AFAP China Team Vice President & GM, China Anthony Wong
GM, Huizhou Walter Cheng
GM, Zhongshan Terence Wong
18+ years experience 13 years in Packaging
16+ years experience 7 years in Packaging
Director, HR & Admin Jam Chu
GM, Jiangyin Daniel Chen
28 years MNCs mgt. experience in Australia/China including 13 years in packaging industry
GM, Beijing Raymond Toh
21+ years experience 17 years in Packaging & Pharmaceutical
30 years experience 18 years in Packaging
Director, Sales &Marketing Austin Chang
Director, Finance & IT Howard Cheung 19 years experience 13 years in Manufacturing industry
28 years experience 14 years in Packaging
Director, Procurement Lillian Zhang
© Amcor 2011
JV Partners
18 years experience 14 years in sales mgt. 4 years in Packaging industry
20 years experience 15 years in Packaging
Slide 67
AFAP China Other 12%
Leading supplier of flexible packaging in China Market Served | Business Portfolio Food
Pharm a & Medical 18%
• Dairy, Milk Powder Food Products • Snacks/Biscuits 55% • Confectionary • Noodle • Health Food • Meat and Seafood • Retortable Pouch • Jelly Lidding • Milk Pouch
HPC 15%
Household and Personal Care • • • • • •
Personal Care Hygiene Products Household Products Cosmetics Toothpaste laminate Evoh Multi-layer laminate
Pharma Medical Other
Products
© Amcor 2011
Slide 68
34
4/4/2011
Our Capability and Competency EXTRUSION COEXTRUSION 挤出 / 共挤
· Co-extrusion · up to 7 layers
· · · · ·
PRINTING
LAMINATION
印刷
复合
up to 10 colors Rotogravure Flexo Toluene-free ink Alcohol-based ink
· · · · ·
LACQUERING & COATING 涂层
Solvent based Solventfree Water based Triplex Extrusion
· Patterned Cold Seal · Heat Seal Lacquer · Sterilizable Sealing Agents
SLITTING
DIE-CUT LIDS
PRE-MADE BAGS
REELS
分切
模切盖材
制袋
卷材
· Slitting
© Amcor 2011
· · · ·
Aluminium lid Alu-free lid Lid with HSL Lid with Hotmelt
· Pre-made pouches & bags · Standup pouch · Free shape · Bag-in-box
· Mono printed · Up to multi-layer laminates · For Form, Fill, Seal in line
Slide 69
Amcor‘s Values and The Amcor Way
We value …
The Amcor Way …
Safety
© Amcor 2011
Customer and Market Focus
Talent
Capital Discipline
Low cost
Slide 70
35
4/4/2011
China Summary & Conclusions • Strong safety and financial results • The organic growth prospects in the market are significant • Our China footprint along with a unique product and technology offering represents a key competitive advantage • Talent is a key enabler and we have a very experienced dynamic management team supported by a high quality workforce • The Amcor Way disciplines with its continuous improvement philosophy represents a powerful opportunity
The China momentum & opportunity is significant.
© Amcor 2011
Slide 71
36
