Ken MacKenzie has resigned as Amcor chief executive, after 10 years of leading the $10bn company into steady growth and expansion into emerging markets, with a refocused portfolio.
Chief financial officer Ron Delia will replace MacKenzie from July 1, inheriting one of the world’s biggest packaging companies with operations in 43 countries, and one that made a $737m profit last year.
MacKenzie almost doubled return on capital during his tenure and guided the company through the aftermath of the carton cartel scandal and the de-merger of Orora in 2013. Amcor’s share price initially fell 3.4 per cent since the announcement of the first change at the top of the company in a decade as the market digests the news.
Incoming Amcor chief executive Ron Delia.
Delia found out about his appointment last week. He says, with the company a solid position, the fundamental strategy will not change, and his business philosophy aligns with MacKenzie’s. Delia says, “Amcor’s success over the past decade has been built on the strength of a high quality and talented team of people.
“Nothing is broken but there are opportunities to improve and evolve as we have done for the past 10 years. Each block in the journey builds on the last. I will be on the road meeting many of our senior people in coming months, and I know they will have ideas.”
Before he became CFO in 2011, Delia ran Amcor’s Latin American rigid plastics operation for three years, and with emerging markets proving to be Amcor’s strongest growth engine in recent years his experience will be a great asset.
Delia sees opportunities in the developing regions of Latin America, Asia, and Eastern Europe. He says, “Emerging markets have been a focus of ours for some time and make up 30 per cent of our total sales and are growing nicely with more opportunity in the future. They have been a source of success for us and we have had a steady stream of acquisitions there and I expect that to continue.”
Outgoing Amcor chief executive Ken MacKenzie.
Amcor, constantly active in the acquisition market, spent $1bn on acquiring 15 companies since its $2.4bn 2009 buy of Alcan. It averaged four acquisitions per year, according to Delia. He sees a ‘rich pipeline’ of deals in progress but he expects most of them to be small despite the recent failed bid for Austrian packager Constantia, prompting some analysts to suggest he might go after a whale to stamp his authority on the job.
MacKenzie says Amcor let the Constantia deal go because it could not get the right return, and it was not a factor in his decision to step down.
Despite Amcor’s consistent strong growth since 2010, and a 14.4 per cent FY14 revenue jump even after spinning off all but its flexibles and rigid plastics operations in 2013, Delia says he is not after ‘size for its own sake’. He says, “I want to focus on value for our shareholders and the return on investment of any acquisition. We have a broad approach to growth across our business but I see good opportunity in rigid plastics in America, particularly non-beverage where the market is fragmented.”
The 43-year-old New Jersey-born Delia, just two years older than MacKenzie when he took on the role in 2005, was MacKenzie’s first outside hire. However, for this top job, the board chose Delia from a field of internal candidates. MacKenzie says the board did not consider an outside hire because of the strength of Amcor’s leadership team, which is sees as one of his biggest achievements.
He says his proudest achievement is not Amcor’s countless acquisitions, but creating a strong culture of outperformance in a team that strives to be better tomorrow than today. He says, “Changing a company’s culture is the hardest thing to do in business. I believe after 10 years in the role the time is right to hand over the leadership of the company.
“I have been fortunate to lead a very talented and committed team through an exciting journey that has created a global leader in the packaging industry with an extensive footprint and considerable opportunity for further growth.”
Delia will earn a fixed salary of $US1.7m ($2.1m), though that could more than triple through various short and long term incentives.
