Amcor cut 300 jobs yesterday. The packaging manufacturer also announced it will close two factories and downsize another.
The redundancies come as Amcor increased its first-half profit by 16.3% to $238.3 million for the six months to December.
“We’ve have a solid first half,” Amcor’s managing director and chief executive, Ken MacKenzie, told an investor briefing yesterday.
However, the manufacturer will close its cartonboard mill in Petrie, Queensland, before the end of the year, its beverage manufacturing site in Thomastown, Victoria, will close mid-year, and its North Laverton manufacturing site in Victoria will also be downsized.
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Nigel Garrard, managing director of Amcor Australasia, said the redundancies and closures were part of steps to “realign” its Australian operations to what he described as the “challenging conditions” facing all Australian manufacturers.
“The continued strength of the Australian dollar significantly increasing cost pressures, including in areas such as energy costs, have made it impossible for these sites to remain competitive,” he said in a statement.
Garrard said the sites were unsustainable.
“We will continue to make adjustments to our operations in Australia in response to these conditions, in order to secure the long-term viability of the business,” he said.
“While I regret that these changes will see a number of co-workers leave the business, we must transform our Australian operations in order to remain a viable business for the long term.”
The Australian Manufacturers and Workers Union has described the job losses as disappointing.
Leigh Diehm, assistant state secretary for the AMWU in Victoria, said there was an average work life of around 20 years at Amcor’s Thomastown site.
“Our members are quite concerned about what is next and it remains to be seen what the future holds for them,” he says.
Diehm says there were no doubt a “couple of factors” prompted the job cuts, including the loss of major contracts such as the one with CUB last year.
“I don’t think anyone would sit there and see a high Australian dollar is a good thing for the manufacturing industry and overseas imports are hard to compete with,” he says.
“We hope the federal government’s push to try to encourage local manufacturers to use local supply chains works, unfortunately in this situation that announcement over the weekend has all been a little late for this facility.”
This article first appeared on LeadingCompany’s sister site, SmartCompany.