FOCUSED LEADERSHIP

In the past, Amcor Australasian and Packaging Distribution (AAPD) was a giant business that used to
manufacture packaging solutions. Later on, they realized that it was very difficult to remain a leader in
such a divided company as they were, since they had different manufacturing technologies, end
markets and distinct raw materials. Which was the reason why, eventually, the management of this
company decided to focused on their core competency and demerge in two separate entities listed
under ASX by creating a sister company called Orora. In this demerge, Orora will be a regionally
focused business manufacturing glass, metal and fiber packaging products while Amcor will be a
globally focused one, specialized on rigid and flexible plastic. Therefore, AAPD’s management was
involved in a very complex process of meaning negotiation where they had to convince the investors
that the restructure of this company was going to lead it to higher shareholder value over time. Also,
they talked everyone into believing that this decision was in the best interest of the company.

Even though, this was not an easy task, since its main disadvantage are the restructuring costs,
Amcor’s management ended up choosing to concentrate efforts on what it does best, which is the
production of plastic-based packaging. On the other hand, they wanted to show that this split off was
not only going to allow each business, both Amcor and Orora, to focus on their own set of unique
strategic priorities, but also to have separate wealth agendas, which can give them the flexibility to
pursue different strategic objectives and adopt independent capital structure as well as financial
policies.

Now, for all of these reasons that I just mentioned, I believe that Amcor is a focused company since its
team really understood that they were good at offering rigid and flexible plastic-based packaging
solutions to global brands, so, owing to their visionary leadership, they decided to follow that
direction. This huge step, takes a lot of courage but in the end, it was worth it, since it helped them to
become a more aggressive business in the global marketplace while expanding their operations in a
world where expansion is key to success.

That’s all, professor. I hope I showed you enough arguments to prove you that AMCOR is indeed a
focused company.

See ya!

They understood what was the thing they were very good at, their core competency. Years ago, Amcor
used to be a company that offer a wide range of packaging solutions. They offer plastic based packaging,
glass packaging, fiber and even metal cams, but after a while they decided to concentrate efforts and
focused on the one thing they were really good at. They understood it was hard to remain as a leader
across different industries with different production processes, different ad markets and different raw
material and processes. So, the management of the company understood that it was very difficult to
remain as a leader in different industries at once, so they decided to demerge all the companies that
were not part of their core competency or their core business. Everything that was not plastic based
packaging they decided to demerged and create a sister company called ORORA. All the companies that
did not produce plastic based packaging solutions were part of the AAPD business units (Australasians
Pacific and Packaging Distribution Businesses). So, the management of the company was involved in a
very complex process of meaning negotiation and they basically talked the investors into accepting the
company’s restructuring in which they were going to be two companies. On the one hand, Amcor and
on the other hand the new company called Orora. But this was not an easy process, there was a lot of
negotiation involved. There was a lot of fear in terms of the investors. They actually had to convince
everyone that this was a smart move for the company. So, the management of the company did an
excellent job convincing everyone that this move was on the best interest of the shareholders. This
demerger was going to allow each company to have its own set of strategic priorities and wealth
agendas. Also, Amcor understood that AAPD or the new company called Orora was a much more
regionally focused business and Amcor, on the other side, was going to end up being a global plastic-
based packaging company. And all of these actions were taken in the best interest of the shareholders.
Now, at the end of the process, the objective was that each company was going to be able to have its
own strategic set of priorities, financial policies and capital structures. In this way, they were going to be
much more flexible companies in terms of decision making and they were going to be able to support
expansion strategies in a much more efficient way. So, but the owners of the company, they were
proposed and they were given an extract talk on the separate company, in this way, by creating two
companies they actually were able to expand operations and to be much more aggressive in the global
marketplace.

We believe that Amcor is a focused company because they understood their core competency, their
core ability was the development and the production of plastic based packaging and, everything else,
needed to be restructured and needed to be part of a second organization who was able to grow and
have its own set of priorities and strategies.