Amcor Asia has five plants in three countries. Its head office is located in Singapore. The business produces tobacco and flexible packaging, including high value-added medical packaging. The business has responsibility for Amcor’s ownership of the Hong Kong publicly listed company AMVIG Holdings Limited (AMVIG).

Amcor Asia consists of:

• Two wholly-owned tobacco packaging plants (one in Singapore and one in Malaysia);
• Three wholly-owned flexible packaging plants (two in China and one in Singapore); and
• The investment in the Hong Kong publiclylisted company, AMVIG.

On 13 August 2008, AMVIG announced its half year earnings to 30 June 2008. Profit after tax attributable to the equity holders of AMVIG increased 68.7% from HK$139.3 million to HK$235.1 million. Earnings attributable to members of AMVIG, for the 12 months to 30 June 2008 increased 46.9% from HK$306.1 million to HK$449.6 million. This improvement in earnings was primarily driven by the acquisition of Brilliant Circle and an improvement in product mix to higher value-add cartons.

During the 2007/08 fiscal year, Amcor’s ownership of AMVIG reduced from 41.05% to 35.4%. This reduction in ownership was due to AMVIG issuing 200 million shares as part payment for the Brilliant Circle acquisition, completed in October 2007. On 6 February 2008, Amcor purchased 18.756 million shares representing 1.9% of AMVIG’s share capital at a price of HK$9.50, increasing its shareholding in AMVIG to 35.4%.

Subsequent to year end, Amcor increased its ownership in AMVIG from 35.4% to 40.2%, investing HK$700 million to acquire 78.3 million shares in AMVIG at a price of HK$8.94 per share. This is expected to reduce to 39.3% following the completion of AMVIG’s latest acquisition by way of cash and shares.

Consolidated Entities

For the controlled entities, profit before interest and tax and before significant items (PBIT) for the year was lower at SG$11.3 million. Returns, measured as PBIT over average funds employed, were 15.5%.

The wholly-owned tobacco operations continued to deliver sound operating performance and benefited from the upgrading of the printing capabilities at the plant in Malaysia. During the year, there was a more competitive pricing environment in the region, impacting margins.

The flexibles operations result was below the 2006/07 year earnings. The plant in Southern China completed the relocation to a new facility during the second half and this negatively impacted earnings. The new facility, with larger and more modern equipment, has created the opportunity for more accelerated growth in the region.

Footnote

The funds invested in AMVIG in Amcor’s accounts at 30 June 2008 consist of cash payments of SG$158.3 million to purchase 346.2 million shares in the publicly-listed company at an average price of HK$3.64 per share, together with the injection of the two tobacco packaging operations in China (Beijing and Qingdao), which had a carrying value of SG$69 million.

The carrying value of AMVIG at 30 June 2008 in Amcor’s accounts is SG$403.3 million, with the difference between this amount and the invested funds being predominantly accounting adjustments for ‘fair value market up-lift’ at the time of exercising options to acquire additional shares plus Amcor’s accumulated share of AMVIG profits.

Subsequent to year end, an additional HK$700 million was invested to acquire 78.3 million shares. The total carrying value as at 21 August 2008 is SG$526.0 million at an average price of HK$5.01 per share.