Amcor Rigid Plastics
Brazil
June 2016
Agenda
1
Introduction to ARP Brazil
1
Where we are
2
What we do
3
Strategy
2
Looking forward
3
Jundiai and Louveira plants
4
Wrap up
2
Amcor in Brazil
ATP, ARP & Flexibles
Latin America
ATP
13%
9 sites
1,000 employees
6
Rigid Plastics
6 manufacturing plants
1 country
Tobacco Packaging
1 manufacturing plant
1 country
1
2
Brazil
AFA
13%
Revenue
Mix
ARP
74%
Flexibles Americas
1 manufacturing plant
1 sales office
1 country
3
Key messages
In Brazil, Amcor Rigid Plastics is advantaged by:
Our business plan is intimately aligned to the Amcor Way:
Having a regional footprint which maximizes customer
coverage with best-in-class cost competitiveness driven by
focus on productivity and operational efficiency
Deliver best-in-class costs vs relevant competitors in selected
markets
Having a disciplined profitable growth agenda favoring
returns and long-term relationships
Leverage on superior technology capabilities to drive
innovation
Having a superior talent pool with a strong culture of
outperformance
Continuing to invest in technology upgrades and superior
innovation capabilities
Operate safely
Continuously improve vs current baseline
Sustain our customer value proposition to become the partner
of choice for our selected customers
Continuing to assess potential growth opportunities via M&A
under a disciplined and strategic approach
4
Brazil is one of the biggest countries in the Americas with
significant opportunities for further growth
Brazil by region
Area, population and GDP
Rainforest
North:
Low growth
Total Area: 8,515,770
Population: 204m
km2
(ranked
Area: 45%
Population:8%
5th)
GDP: 5%
North East:
Area: 18%
Population:28%
Potential on tourism
Fast growth due to social
programs
GDP: 14%
Centre West:
Fast growing area
Area: 6%
Agro industrial belt
Population:8%
Area: 12%
Engine of the country
GDP: 10%
Population:42%
Services
South East:
GDP: 55%
Mature
economic region
Industrialized region
South:
Area: 9%
Population:14%
GDP: 16%
Source: CIA World Factbook IBGE, Sebrae, CervBrasil and Market Information - Jun 2015
5
Brazil is one of the biggest countries in the Americas with
significant opportunities for further growth
Evolution economic scenario
2011 to 2016F
2011
GDP (US$ bi)
GDP %YOY
GDP per capita(US$)
Exchange rate (eop)
Exchange rate %YOY
2,613
3.9%
13,237
1,86
-11%
2012
2013
2014
2,459
1,9%
12,342
2,461
3,0%
12,244
2,416
0%
11,915
2,05
-10%
2,36
-15%
2,66
-12%
2015
1,769
-3,8%
8,651
3,96
-49%
2016F
1,604
-3,7%
7,781
3,94
-1%
In 2014, Brazil’s GDP placed among the 12th largest
economies in the world and the 2nd largest in the
Americas; country is considered a strategic target for
blue-chip customers
Brazil places among the biggest in:
6th largest population and labor force
3rd largest consumer of CSD and in beer in total liters
and the 3rd largest beer producer
9th largest consumer of electricity
Source: Focus – Consensus forecast May ‘16
6
Successfully implemented world-class safety
18.0
16.0
15.5
652
14.0
employees
12.0
10.7
10.0
8.0
in ARP Brazil
LTIFR
7.8
RCFR
6.6
6.0
4.0
3.8
2.0
0.0
0.0
FY'4
FY'5
0.8
FY'6
3.7
1.5
FY'7
0.6
FY'8
0.0
FY'9
1.0
0.0
FY'10
1.5
0.8
0.0
FY'11
FY'12
2.0
0.9
0.0
FY'13
0.0
FY'14
1.0
0.5
FY'15
2.4
0.6
FY'16
Three out of six sites with “no injuries” in the fiscal year (Suape, Goiânia, Femsa).
ARP Brazil has been able to sustain “no injuries” for eight months in all six plants
Guardian Angel program, Hand Safety campaign and safety refresh implemented in Q2
7
Amcor has 6 plants in Brazil with 652 employees
Manaus
Preforms: 15 to 106g
Customers: CSD
Goiânia in-house
Food containers:
180 to 600ml
LTA Unilever
Jundiaí in-house
CSD bottles:
200 to 3000ml
LTA with Femsa
Suape
Preforms: 13,6 to 64g
Customers: CSD and food
Co-located to resin petrochemical hub
Louveira
DP containers: 10 to 2000ml
Customers: Personal Care,
Pharmaceutical, Caps and others
One-step & injection platform
Jundiaí
Bottles: 237 to 2500ml
Customers: CSD and CB segment
8
Brazil Leader Profiles
Ruben Melara
General Manager
Salvadorean
24 yrs in Supply Chain, Commercial , GM
Coca-Cola, SAB Miller, Kimberly Clark
Rodolfo Salles,
Carlos Ferretto
Thaisa Santos
Sonia Pedroni,
Finance Director
HR Manager
Supply Chain Director
R&D Manager
2006: Finance Director
2001: Controller
2011: Human Resources Mgr.
2010: O&D Supervisor
2012: Supply Chain Director (Carglass)
2008: Procurement/Logistics Director(PPG)
2004: Procurement/Logistics Mgr.(Quimica Taubaté)
2000: R&D Manager
1994: Louveira Plant Manager
Gilberto Casares
Mauro Luna
Karina Borin
Operations Director
Commercial Director
Strategic Marketing and V+ Champion
2012: Industrial Director (Kidde)
2010: Manufacturing and Supply Dir. (PPG)
2008: South America Plant Mgr. (PPG)
1998: Plant Manager (PPG)
2012: Managing Director/Country Mgr. (SKF Peru)
2006: Industrial Sales & Mkt Dir. (SKF Brazil)
1997: National Sales Manager (PTI/Falk)
1989: Sales Engineer (Voith)
2014: Strategic Marketing and V+ Champion
2012: Key Account Coordinator
2010: Mkt & New Business Developer
2010: Marketing Coordinator
9
Business Categories & Key Customers
CSDW
Custom Beverage (Heat Set and Aseptic)
Diversified Products
Personal & Home Care
Food
Pharmaceutical
(Containers, droppers and caps)
10
Annual Sales Volume Trend
CAGR
+6%
FY12
FY13
FY14
FY15
FY16
85% of volume is protected under long-term agreements.
Sustainable year-over-year growth higher than GDP evolution
Even though market is in recession, achieved double digit volume growth in last 2 fiscal years due to strong market
share gains leveraged on innovation and strategic investment for footprint upgrades.
11
Rigid plastics Brazilian market with high
participation of blue-chip customers
B-Brands
Player #1
Other
Waters
CSDW
Player #3
Player #2
Others
Player #1
Player #2
Player #3
Player #4
Player #5
Player #6
Player #7
Player #8
Player #9
Player #10
Player #11
Player #12
Player #13
Player #14
Player #15
Player #16
Player #17
Player #18
Player #19
Player #20
Player #21
DP
Top 3 customers hold 67% of BR market in rigid
plastics
High customer fragmentation in DP segment in rigid
plastics market
ARP participates with leading share of wallets in
2 biggest players
ARP with high opportunity to continue to increase share
of wallet in key players of DP segment
Source: ARP Brazil internal analisys
Customers where ARP participates
12
Fragmented Competitive Landscape
Rigid plastics market: 25,2b units
Others
Majority of market concentrated with ten multi-national and large local
converters
Amcor Rigid Plastics is:
# 2 in rigid plastics
# 2 in total CSDW segment
Competitors
market share
# 7 in DP segment
Amcor
Source: ARP Brazil internal analisys
13
Our Business Strategy
Simple and Focused
Objective
Strategy
Translation
1
Strengthen company culture
Engaged workforce
2
Build an outperformance team
Top talent
3
Have the lowest CTP in the market
Cost competitiveness
4
Become the partner of choice
Customer value proposition
Based on a strong foundation of safety, compliance & control
14
Our Commercial Strategy
Profitable volume growth
Market share gain in potential existing customers
Maximize installed capacity with DP plant
Diversify customer and product portfolio
Continue to expand isotonic segment
DP customers / new SKUs with focused growth in other poly-olefins
Focused on
leveraging our
strengths with injection,
pursuing market share
growth and
diversifying into
new segments
Explore new segments
Dairy (Aseptic)
Juice (Aseptic)
Water
Edible Oil
15
Working together as “One Amcor” in Brazil
Rigid Plastics and Flexibles
Since 2010, both BGs
have ha/d joint
participation in major
Pharma and Cosmetic
fair in Sao Paulo
Rigid Plastics and Tobacco
After Amcor Tobacco´s acquisition of Souza Cruz’s Tobacco
packaging plant in 2015, relevant synergies between support
areas of both BGs:
Information and Technology
Human Resources
Joint approach to
common customers in
Pharma segment
Plant in
South Brazil
16
Agenda
1
Introduction to ARP Brazil
1
Where we are
2
What we do
3
Strategy
2
Looking forward
3
Jundiai and Louveira plants
4
Wrap up
17
Looking Forward
Brazil, even through a recession, remains one of the biggest geographies
in the Americas with enough resources and demand to recover growth
Politics: consolidated democracy with solid institutions
Customers: high concentration of blue-chip customers, in both CSDW and DP segments, plays to Amcor´s strength in servicing global brand owners
Consumers: robust domestic market
Competitors: concentrated on ten multi-national and big local converters, current market footprint reflects significant opportunities for market
consolidation through M&As
Suppliers: strategic supplier partnerships leveraged on scale
Amcor Brazil
Relevant leadership position in the PET market with future focus on growth in other poly-olefins market servicing the DP segment
Offering the best value proposition for customers leveraging on innovation and V+
Delivering most competitive TCO to market leveraging on scale, cost management and P+
Engaging top talent leveraging on a strong outperformance culture
18
Brazil has the lowest PET per capita consumption vs similar
markets with a huge potential to increase
PET consumption per capita (kg/year)
Source: Canadean 2013
19
Innovation recognitions from customers
Preform 15g
for Coke
bottle 200ml
Upside down
container for
Unilever
ketchup
Shampoo
200ml container
with 50% PCR
for J&J
Pepsico
recognizes ARP
as Gold Partner in
“Quality Excellence
Award 2016”
“Silver”
Supplier
for Femsa
2016
CSD:
Best Converter
2014
ARP was
number #1
company
mentioned by
magazine
readers
20
Agenda
1
Introduction to ARP Brazil
1
Where we are
2
What we do
3
Strategy
2
Looking forward
3
Jundiai and Louveira plants
4
Wrap up
Jundiaí and Femsa (in-house) plants
Process, products and safety performance
Process
Safety performance
Safety Program: “Guardian Angel”
Bottles Blow Molding: preform is re-heated in
oven to be bi-axially stretched in a blow mold
Enter
“Taking care of each other, advising regard unsafe
behaviors to prevent accidents and incidents.”
Exit
Femsa Plant
15
LTI frequency rate
RC frequency rate
10
Preforms
Customers and Products
Container or Bottle
5
0
FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
Jundiai Plant
15
10
5
0
Source: ARP Brazil internal analisys
FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
22
Louveira plant
Process, products and safety performance
Process
Process
One Step: Injection, Stretch and Blow Molding:
Melted plastic is injected into a cavity then transferred to a blow
mold to form the final container
Safety Program: “Guardian Angel”
Louveira Plant
6
Enter
Exit
LTI frequency rate
RC frequency rate
4
2
Resin
Container or Bottle
0
FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
Customers and Products
Personal and home care, food and pharmaceutical segments
Source: ARP Brazil internal analisys
23
Staying safe on the shop floor
Required safety behaviors for visitors
Take Action, Take Care!
is Amcor’s safety
philosophy and a
cornerstone of staying
safe in our site.
If you see something you think is
unsafe during your visit, Take Action
by telling your guide. Take Care of
yourself and others by staying with
your guide at all times, not touching
anything, and following a few
basic rules:
Listen to your guide and pay attention to signs.
Obey all instructions (verbal or written)
No jewelery
Consult your guide in case
of concern
Mobile phones are not
allowed on the shop floor
No cameras allowed on site
Except by special permission
Pay attention to vehicles and
stay in pedestrian walkways
Make eye contact with drivers
before crossing pathways
Don’t touch machinery
or equiment
Hold the handrails on stairs
24
Agenda
1
Introduction to ARP Brazil
1
Where we are
2
What we do
3
Strategy
2
Looking forward
3
Jundiai and Louveira plants
4
Wrap up
25
Key messages
In Brazil, Amcor Rigid Plastics is advantaged by:
Our business plan is intimately aligned to the Amcor Way:
Having a regional footprint which maximizes customer
coverage with best-in-class cost competitiveness driven
by focus on productivity and operational efficiency
Deliver best-in-class costs vs relevant competitors in
selected markets
Having a disciplined profitable growth agenda favoring
returns and long-term relationships
Leverage on superior technology capabilities to drive
innovation
Having a superior talent pool with a strong culture of
outperformance
Continuing to invest in technology upgrades and superior
innovation capabilities
Operate safely
Continuously improve vs current baseline
Sustain our customer value proposition to become the
partner of choice for our selected customers
Continuing to assess potential growth opportunities via M&A
under a disciplined and strategic approach
26