Page 11 - Packaging News Nov-Dec 2019

www.packagingnews.com.au November-December 2019
NEWS EXTRA
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RIGHT: MD & CEO Brian Lowe with the EFI Nozomi C18000 at Orora’s plant in Oakleigh. The plant and the Nozomi will both be sold to Nippon Paper as part of the deal.
the Botany B9 Paper Mill, fibre converting, specialty packaging, cartons, bags, functional coatings, and Orora WRS packaging distribution.
Orora expects to receive net cash proceeds of A$1.55bn from the transac- tion after taxes, transaction costs, restructuring costs, and customary closing adjustments. It will return in the vicinity of A$1.2bn, the majority of the net proceeds, to shareholders, in what it says is “the most efficient way through capital management initiatives”.
FOCUS
Once the sale goes through Orora will focus on its Australian beverage business, in which it has the number one market position in cans and glass wine bottles, and number two in wine closures and glass beer bottles; and on its North American business, which encompasses both pack- aging and visual display. It is in the top five in both US sectors, with the fragment- ed packaging solutions market valued overall at US$50bn and the visual display market worth around US$10bn, giving Orora plenty of room for growth.
Even before the sale, Orora’s revenue from North America is now higher than that from Australia. Orora’s last set of full year results saw $2.61bn coming
from the US, with $2.15bn from Austral- asia. At $1.4bn the Australasian Fibre business had higher earnings than the prior year.
Lowe said: “This announcement repre- sents an exciting new era for both Orora and the Fibre business as it transitions to Nippon Paper.
“Orora Group will retain the market leading Beverage business, which manu- factures around 65 per cent of Australia’s wine bottles, is the leading manufacturer of aluminium cans in the Australasian region, and has exclusive rights to produce Stelvin wine closures.
“The Beverage business has a history of sustained growth, innovation and profit-
ability. Orora’s North America businesses likewise operate in attractive segments and, following recent initiatives, are well positioned to drive future growth and cash flow generation.”
Almost 90 per cent of the Australian car- tonboard industry is now in the hands of two fully integrated companies: Visy and Nippon. The deal follows the trend of the last three years which has seen major consolidation in all print and related sectors, including the outdoor media industry, the magazine publishing industry, the newspaper publishing industry, and the catalogue and magazine printing industry, all of which are now in the hands of just two major players. ■
IMAGE: JAKE NELSON