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Amcor’s President of Greater China, SheXin, shared his viewpoints on the Chinese packaging market recently during anexclusive interview with China Plastic & Rubber Journal (CPRJ).


She Xin, President of Amcor Greater China.
She Xin, President of Amcor Greater China.

Amcor successfully completed the acquisition of Bemis Company Inc. on June 11, 2019. Through the merger and acquisition, China is expected to become one of the packaging giant’s global leading markets and major exporters in five years.

In August last year, Amcor announced to acquire Bemis in an all-stock combination valued at US$6.8 billion. Amcor stated that the acquisition would complement its businesses and create one of the world’s leading consumer goods packaging enterprises.

Bemis, founded in 1858, is a global supplier of flexible packaging used by leading food, consumer products, healthcare, and other companies worldwide.

After the successful completion of acquisition effective June 11, the combined company now operates as Amcor Plc. During the 2018 financial year, the company generated combined revenues of more than US$13.4 billion from operations at approximately 245 locations in more than 40 countries.

As a large consumer of consumer goods in the world, China is expected to become a more significant market to Amcor.

Amcor to set sail for growth in China

On the day of the acquisition announcement, Amcor’s share rose by 10%, suggesting the optimism in the market,” said She Xin.

The total retail sales of social consumer goods in China reached RMB 38.1 trillion in 2018, representing an increase of 9%, according to the statistics of the National Bureau of Statistics. This put China as the second largest consumer goods country in the world, and further narrowing its gap with the US.

Apparently, the significance of the Chinese market to international enterprises has been increasing, and its influence on consumer goods packaging enterprises, such as Amcor, is more direct.

Amcor was established in 1960, and entered the Chinese market in 1994. In the beginning, it built two factories in Beijing and Zhongshan, and continued to expand thereafter. After acquiring Bemis, Amcor has 13 factories and a stronger business presence in major consumer markets across China.
The market position of Amcor in packaging industry is further enhanced after acquiring Bemis.
On supermarket shelves, packages produced by Amcor can be found among products including food and beverages, home and personal care, tobacco, fast-moving consumer goods, medical devices, medicine, etc.

Amcor serves a wide range of international and local consumer brands, such as Unilever, Nestlé, Durex, Yili, Mengniu, Huang Laowu, Junlebao, Qiaqia, Wutai Gankang, Yunnan Baiyao, etc.

Every day, about 200-300 million Amcor packages are active in the Chinese market. Almost everyone contacts Amcor packages from day to night,” remarked She Xin.

Even so, the Chinese market accounts for only 6% of Amcor’s global business. “This does not match the development of an international enterprise in China. For international enterprises, the Chinese market generally accounts for 15-20% in sales,” he commented.

She Xin continued: “Therefore, growth will be our top priority in the Chinese market. Amcor targets to develop China as one of its global leading markets in five years. Meanwhile, considering the complete local industrial supply chain, the quality of workforce, the One Belt, One Road Initiative advocated by the government, and other factors, China will also become one of Amcor’s major exporters in the world.”

Restructuring an irresistible trend to the packaging sector

At present, there are nearly ten thousand flexible packaging processing enterprises in China, with the majority of which are small and medium enterprises. On the contrary, the sector is more integrated in the developed European and American markets.

In view of the industrial supply chain, the upstream raw materials and the downstream end-user industries are being integrated. Moreover, as the increasing requirements for environmental protection and safety production put more pressure on enterprises, merger has become one of the crucial ways for development. Every sign indicates that the restructuring of the flexible packaging industry is an irresistible trend.

She Xin believes the process of consolidation and integration will speed up in the sector in the next five to ten years. “After the restructuring is completed, enterprises will benefit from the standardization and technological upgrade in areas like environmental protection and safety. The society will also benefit from the restructuring as well.”

Amcor factories in China adopt advanced technologies including solvent-free lamination, flexography, co-extrusion lamination, etc., thus all the environmental indicators outperform the national emission standards.

Amcor acquired seven factories in China in the past decade, and will continue to acquire high-performance enterprises,” pinpointed She Xin.

Bringing the world-class R&D capability to China

After acquiring Bemis, in addition to benefiting from business integration, Amcor’s R&D capability is remarkably enhanced.

Bemis is an enterprise with high research & development (R&D) strength. Its Innovation Center in Wisconsin, the US, has cutting-edge laboratory equipment and pilot workshop, and provides powerful support for customer product innovation.
AmLite is a unique line of metal-free high barrier packaging, which utilizes Amcor’s extensive experience in high barrier coating and conversion.
Amcor also has the R&D prowess in the applications of raw materials including plastics, paper and aluminum foils, as well as rigid and flexible packaging. Take biodegradable materials that draw the market’s attention as an example, a commercial product which can be biodegraded in the natural environment within 24 months is about to be launched in the European and American markets,” She Xin said.

Sustainability is one of the most important goals for Amcor’s packaging development. In the European and American markets, 40% of Amcor products are biodegradable, recyclable, and reusable. According to Amcor’s plan, 100% of its packages around the world will be recyclable or reusable by 2025.

It is our R&D goal to reduce the use of packaging materials while protecting the quality of packaged products, and keep the costs the same as traditional products,” She Xin explained.

In China, Amcor has its own R&D team which is at the world’s forefront, especially in the digital and intelligent packaging development. Amcor cooperates with Alibaba and JD.com, two famous e-commerce platforms in China, to develop packages that are more eco-friendly and more suitable for e-commerce.

For example, to solve problems like collisions, leakage, and odor tainting during transportation, Amcor has developed a new package. For the secondary packaging, it has developed a higher-strength package for express delivery. Meanwhile, it also enhanced the application of QR codes on packaging for product traceability and anti-counterfeiting.

To better meet its development needs and introduce sooner the technologies of other Amcor R&D centers in the Chinese market, She Xin unveiled that Amcor will intensify its R&D capability in China and establish two or three R&D centers targeting such fields as food and medical packaging.

Boosting smart manufacturing for mass customization

The 5G era, Industry 4.0 and intelligentization are changing our life. A new era is around the corner. Everyone and every enterprise are concerning these topics every day.

She Xin, who has also focused on researching smart manufacturing, pointed out that the first half of the Internet+ upgrade has completed the collection and application of consumer goods and personal information, helping enterprises to make better business decisions.

In the second half, the massive industrial applications of the Internet of Things (IoT) and collection of machine information will help enterprises to make more rational production plans and business decisions,” he analyzed.

The trend of mass customization is becoming increasingly more prominent now and will still be so in the future, She Xin said. It requires factories to grow bigger in scale and develop the capability of flexible production, so as to meet the market demands for individualization, customization, small batches and multiple orders.

The trend also requires factories to adopt advanced technologies like digital printing, and be capable of optimization and design processes, he added.

Amcor’s China factories have introduced the MES system for processes, including printing, lamination, slitting, and bag making, to complete data collection. In the future, it will continue to promote smart manufacturing, apply cutting-edge technologies such as automatic printing and digital printing, and introduce more automatic and intelligent equipment for back-end packaging, warehousing, etc.

She Xin admitted that compared with Amcor factories in overseas, factories in China still have a long way to go in intelligent technologies. To better promote smart manufacturing in the future, Amcor will consider building a smart manufacturing demonstration factory in China.

Adopting people-oriented management style

She Xin graduated with a master’s degree in polymer and chemical engineering in New Zealand and then joined the renowned dairy company Fonterra. In 2001, he started to work for Tetra Pak where he was in charge of the sales and key accounts management for the Chinese and the Taiwan region market. He also worked in the global smart manufacturing department. He has joined Amcor since early 2018.

As for management, She Xin cannot agree more with the “happy employees are more productive” management style.

He explained that one of an enterprise’s top priorities should be building an employee development platform. It is because the higher the value generated by employees, the happier they feel, the more productive they are, and higher the value they bring to customers. In simple words, an enterprise should be people-oriented.

He also emphasized the importance of transparent decision making process. In the versatile modern consumer goods market, a festival and even an event often require customized marketing and generate new packaging needs. This requires quick responsiveness, otherwise the business opportunity would be gone in an instant.

In such business environment, since the decision making depends on the front line, we can serve customers better by giving more decision making power to front-line employees,” he explained. “Meanwhile, the transparent process in the sophisticated Western management system is indispensable because it assures that the decisions made are normative and rational, enabling big players like Amcor to always stay responsive in the market.”

All in all, an enterprise should continue to make breakthroughs and create new values, concluded She Xin.

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