Packaging giant Amcor continues to consolidate and diversify its global business with a recent acquisition in Mexico. As they say, if you want to stay at the top, you've got to keep on moving.
Amcor announced this week that it has entered into an agreement to purchase the PET injection and blow molding assets of Mexican firm Embotelladoras Arca and supply PET bottles to Arca with an initial supply agreement of eight years.Arca is the second largest Coca Cola bottling franchise in Mexico and was formed in 2001 through the merger of three of the oldest bottling companies in the country.
The firm distributes product throughout the Northern region of Mexico. Amcor will purchase the PET on site injection and blow molding assets of Arca for around $60 million. This amount will be paid in yearly instalments throughout the life of the contract.
Amcor currently supplies around 250 million preforms to Arca annually. As a result of this agreement, Amcor will supply 100 per cent of Arca's requirements, which will represent in excess of 800 million units.
Amcor managing director Russell Jones said: "This acquisition is a further step forward for our business in this region. Over the past few years the business in Mexico has delivered substantial growth in volume and earnings driven by strong customer relationships and the conversion from glass to PET of a number of hot fill beverages.
"Arca is the second largest Coca Cola bottler in Mexico and it is pleasing they chose Amcor as their partner when they decided to exit the self manufacture of PET bottles. The acquisition price will be spread over several yearly instalments and ensures that Amcor will achieve its targeted returns by the end of the third year."