Amcor Steps up Chinese Presence

Source from:  worldtobacco.co.uk 03/03/2006

Australian packaging specialist Amcor will increase its operations in the Chinese tobacco market under a three-stage deal giving it 44% of a Hong Kong listed cigarette packager. Amcor said it would sell two packing plants in Beijing and Qingdao for HK$ 509m worth of shares (121.1m) in Vision Grande Group for HK$ 4.20 each. Vision Grande has also agreed to issue Amcor another 16.67m new shares at the same price and a further 96m HK$2.50. Amcor managing director Ken MacKenzie said in an interview "The restructure increased Amcor's exposure to the Chinese tobacco packaging market. Our initial investment in Vision Grande was designed to build our relationship with that company. The current plans to increase ownership and inject our Chinese tobacco operations into Vision Grande will cement our relationship and give a solid platform for further growth in this rapidly consolidating industry." Mr MacKenzie added that Amcor will appoint Vision Grande's chairman and take control of the board, and would consolidate Vision Grande's earnings after the deal was complete. In 2004-05 Amcor enjoyed a strong year in tobacco packaging in Asia, but overall profit for the region fell 9%, mainly due to a poor second half marked by asset write-downs and lower margins and volumes in its corrugated box division. Enditem