Roy Davidson, 16 May 2019



Amcor (AMC) is one of the world’s largest packaging companies. The company has a global footprint and a broad range of rigid and flexible packaging products servicing the food, beverage, healthcare, home and personal care, and tobacco packaging industries.

AMC has a global footprint

AMC has grown from its origins in Australia into a true global packaging player with more than 35,000 employees in over 40 countries. AMC has been able to achieve this through a combination of organic growth and successful acquisitions. One such acquisition was the transformational purchase of Alcan Packaging from Rio Tinto in 2010. The Alcan Packaging acquisition added approximately US$4.1bn in sales and 14,000 employees across 80 plants in 28 countries. It also increased AMC’s revenue by 50% and earnings by 40%. The company has made several strategic acquisitions since then and continues to assess opportunities.

Defensive end markets

While AMC’s pursuit of acquisitions and operations in emerging markets (30% of sales) provides earnings growth potential, the end markets the company serves are very defensive, with demand less linked to economic conditions. Around two thirds of overall sales are from the food and beverage sectors, with healthcare, tobacco and home and personal care making-up the remaining third.

Bemis expands North American presence

For some time AMC has looked to expand its share in the North American flexibles market where it has historically been underweight. This would enable it to expand its offering to multinational customers and increase its exposure to an attractive market. To this end, AMC recently announced the acquisition of Bemis, a leading flexible packaging provider. The combined company will be the world's leading consumer packaging company with a comprehensive global footprint and over US$13bn in revenue.

Investment view

AMC’s sales tend to be more defensive in nature (food, beverage, pharmaceutical, tobacco) which insulates AMC more than most. AMC also has a history of innovating and we expect this to be a source of continued competitive advantage, especially as demand increases for more sustainable packaging. The balance sheet remains sound and the company has competitive advantages based on its market leading position and global operations. Acquisitions, which have proven successful in the past, remain a key part of the AMC business model. Increases in the cost of raw materials (e.g. resins) have recently dented earnings, however, these are ultimately passed on to end customers, and this headwind is now turning into a tailwind.


  1. technological change
  2. economic downturn
  3. increased competition