Correspondence 0001748790-23-000015 from Amcor plc (AMCR, AMCCF) (CIK 0001748790) (AMCR)
Amcor plc (AMCR, AMCCF) (CIK 0001748790)
Date: April 28, 2023 · CIK: 0001748790 · Accession: 0001748790-23-000015
AI Filing Summary & Sentiment
File numbers found in text: 001-38932
Letter
Via EDGAR Division of Corporation Finance Form 10-K for the Year Ended June 30, 2022 Form 10-Q for the Quarter Ended December 31, 2022 Form 8-K furnished February 7, 2023 File No. 001-38932
Dear Ms. Erlanger and Ms. Gilmore,
On behalf of Amcor plc, a company organized under the laws of Jersey, Channel Islands (the “Company”), below please find the Company’s responses to the comment letter to Mr. Casamento, the Chief Financial Officer of the Company, dated March 31, 2023, from the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”). The numbered paragraphs below set forth the Staff’s comments together with the Company’s responses. Page numbers and table numbers in the Company’s responses correspond to page numbers and table numbers, respectively, in the Company’s applicable filing with the Commission.
Please note that certain confidential information contained in this letter was omitted by means of redacting a portion of the text. The symbol “[****]” has been inserted in place of the omitted portions (the “redacted information”). Copies of this letter containing the redacted information have been filed separately with the Commission subject to a request for confidential treatment pursuant to Rule 83 of the Commission’s Rules on Information and Requests (17 CFR §200.83). The Company requests that the redacted information be maintained in confidence, not be made part of any public record, and not be disclosed to any person (other than the Staff) as they contain confidential information.
Form 10-K for the Year Ended June 30, 2022
Management's Discussion and Analysis of Financial Condition and Results of Operations Presentation of Non-GAAP Information, page 34
***CONFIDENTIAL TREATMENT REQUESTED BY AMCOR PLC FOR CERTAIN PORTIONS OF THIS LETTER PURSUANT TO RULE 83***
1.Staff’s Comment: We note your disclosure that Adjusted EBIT from continuing operations and Adjusted Net Income from continuing operations include an adjustment for the amortization of acquired intangible assets from business combinations. We also note from your footnote to the table that amortization of acquired intangible assets from business combinations includes amortization expenses related to all acquired intangible assets from past acquisitions, including $26 million of sales backlog amortization for the fiscal year 2020 from the Bemis acquisition. Please revise future filings to disclose that while the expense is excluded, the revenue of the acquired company is reflected in the measure and that those assets contribute to revenue generation. Your disclosures in your earnings releases furnished on Form 8-K should be similarly revised.
Response: In consideration of the Staff’s comment, the Company will add a statement on future Form 10-K and Form 10-Q filings containing a presentation of non-GAAP information, as well as within future earnings releases containing such a presentation, that while the amortization expense related to all acquired intangible assets is excluded, the revenue and all other expenses, unless otherwise stated, of the acquired companies is reflected in the measures Adjusted EBIT and Adjusted Net Income (from continuing operations, if applicable) and that those assets contribute to revenue generation.
Note 11, Fair Value Measurement, page 71
2.Staff’s Comment: We note that within the section titled "Assets and Liabilities Measured and Recorded at Fair Value on a Nonrecurring Basis," you disclose that during the fourth quarter of fiscal year 2022, you met the criteria to recognize the related assets and liabilities of the Russian operations as held for sale which resulted in remeasuring the disposal group at its fair value, less cost to sell, which is considered a Level 3 fair value measurement. Please tell us, and revise to disclose in future filings, the description of the valuation technique(s) and the inputs used in the fair value measurement of the disposal group. See guidance in ASC 820-10-50-2(bbb)(1). Please note this disclosure should be made for any material nonrecurring fair value measurements.
Response: The Company respectfully acknowledges the Staff’s comment and the guidance in ASC 820-10-50-2(bbb)(1) that requires a description of the valuation technique(s) and the inputs used in the fair value measurement.
The Company acknowledges it did not specifically state the valuation technique(s) and inputs used in the fair value measurement of the Russian disposal group in the Form 10-K for the Year Ended June 30, 2022. The Company did disclose in the Form 10-K for the Year Ended June 30, 2022 in Note 2, Significant Accounting Policies (page 55) that the fair value of a disposal group “is determined based on management’s assessment of indicative bids, a market multiples model in which a market multiple is applied to forecasted earnings before interest, taxes, depreciation, and amortization (“EBITDA”), discounted cash flows, appraised values or management's estimates, depending on the specific situation.”
***CONFIDENTIAL TREATMENT REQUESTED BY AMCOR PLC FOR CERTAIN PORTIONS OF THIS LETTER PURSUANT TO RULE 83***
In consideration of the highly uncertain political, regulatory, and economic environment relating to transactions involving Russian assets following the Russia-Ukraine conflict beginning in February 2022, management’s assessment of the following specific factors was used to determine fair value of the Russian disposal group as of June 30, 2022. Management evaluated pre-diligence offers received and discounted them after considering various uncertainties present at the time, including evolving customer decisions on remaining in the region and decisions to move business out of the region. In addition, management consulted with an external advisor to assess the discount that the Russian government was likely to apply to the transaction value given the newly introduced requirement to obtain approval of the transaction and agreed purchase consideration from a Russian government commission prior to the sale.
The Company’s filings subsequent to the Form 10-K for the Year Ended June 30, 2022, have included incremental information on how the fair value of the Russian operations was determined. In the Form 10-Q for the Quarter Ended September 30, 2022 in Note 7, Fair Value Measurement (page 17), the Company disclosed it had “obtained indicative bids on which basis the expected fair value less costs to sell the Russian business has been updated.” In the Notes to the Financial Statements of the Form 10-Q for the Quarter Ended December 31, 2022, the Company disclosed the completion of the sale of the Russian operations on December 23, 2022, and the total net cash consideration received upon the sale.
The Company will ensure on future Form 10-Q and Form 10-K filings that the Company’s Fair Value Note to the Financial Statements meets the disclosure requirements in ASC 820-10-50-2(bbb)(1) for all material nonrecurring fair value measurements.
Note 21. Segments, page 97
3.Staff’s Comment: We note your disclosure of revenue disaggregated by sales by major product and geography. Please tell us how you considered disclosing revenue by industry segment under the guidance in ASC 606-10-55-89 through 55-91. In this regard, we note that investor presentations and earnings calls appear to address changes in sales volumes related to specific industries or market segments such as medical and pharmaceutical, beverage, food, and consumer goods, etc. Please advise or revise accordingly.
Response: In response to the Staff’s comment, the Company confirms that it considered the guidance in ASC 606-10-50-5 and related guidance in ASC 606-10-55-89 through 55-91 when evaluating how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors to determine the appropriate categories for disaggregation of revenue. ASC 606-10-55-89 highlights that the extent to which a company’s revenue is disaggregated depends on the facts and circumstances of the company’s contracts with customers. The Company generates revenue by providing its customers with flexible and rigid packaging products, serving a variety of end markets. The majority of customer contracts across all categories are in the form of either a purchase order or the combination of a purchase order with a master supply agreement pursuant to each of which control is typically transferred for all products at a point in time upon shipment to customers.
***CONFIDENTIAL TREATMENT REQUESTED BY AMCOR PLC FOR CERTAIN PORTIONS OF THIS LETTER PURSUANT TO RULE 83***
Following the implementation guidance in ASC 606-10-55-90, the Company considered (a) disclosures presented outside of the financial statements, including in the investor presentations and earnings calls, (b) information regularly reviewed by the Company’s Chief Operating Decision Maker (“CODM”), and (c) other information that is similar to information identified in (a) and (b) that is used by the Company or users of the Company’s financial statements to evaluate the Company’s financial performance or make resource allocation decisions. In determining the categories for disaggregation of revenue, the Company considered the examples cited in ASC 606-10-55-91: (a) the type of good or service, (b) the geographical region, (c), the market or type of customer, (d) the type of contract, (e) the contract duration, (f) the timing of transfer of goods or services, and (g) the sales channels.
The Company’s five Flexibles operating segments have different methods for disaggregating revenue as presented to the Company’s CODM, with some breaking down revenue by country and others breaking down revenue by markets that do not have a uniform definition across the different Flexibles operating segments. The Company does not consistently track revenue by industries or market segments across its Flexibles operating segments for internal purposes and does not report this information to the CODM as part of its normal reporting processes.
The Company does provide in its investor presentations and earnings calls additional directional, high-level information on sales volume changes related to specific industries or market segments, such as medical and pharmaceutical, beverage, food, and consumer goods. For example, the unique facts and circumstances of the 2019 Novel Coronavirus (“COVID-19”) pandemic temporarily impacted consumer behavior differently across different industries, which the Company highlighted when referencing the short-term changes in the healthcare, medical and pharmaceutical industries. While the information across industries is not used by the Company’s CODM to evaluate financial performance and make resource allocation decisions, the Company believes that discussing directional changes in sales volumes per industry is meaningful to investors at the time such disclosures are made because the information provides additional context and aligns with market metrics discussed by the Company’s customers.
The Company’s contracts with customers generally span industries or market segments if the customer is active in multiple industries or market segments. Customer contract terms and conditions, including payment terms, do not vary by industry or market segments. As noted, references to specific industries or market segments are occasionally discussed to provide investors additional directional information on the Company’s overall revenue performance. The Company’s reference to specific industries or market segments is not intended to indicate that there are different economic factors that regularly impact the nature, amount, timing, and uncertainty of revenue and cash flows.
The Company has concluded that the disclosure of disaggregated revenue by geography and major product type best represents the characteristics of the Company’s revenue including the nature, amount, and timing of the Company’s revenue. The other
***CONFIDENTIAL TREATMENT REQUESTED BY AMCOR PLC FOR CERTAIN PORTIONS OF THIS LETTER PURSUANT TO RULE 83***
categories cited in ASC 606-10-55-91 (e.g., market or type of customer, type of contract, contract duration) do not differ across the five Flexibles operating segments when evaluated with respect to the Company’s revenue. The Company will continue to evaluate the disclosure of disaggregated revenue in future filings, considering changes in its business and information regularly provided to investors.
Note 21. Segments, page 97
4.Staff’s Comment: We note your disclosure that your five Flexibles operating segments (Flexibles Europe, Middle East and Africa; Flexibles North America; Flexibles Latin America; Flexibles Asia Pacific; and Specialty Cartons) have been aggregated in the Flexibles reportable segment as they exhibit similarity in economic characteristics and future prospects, similarity in the products they offer, their production technologies, the customers they serve, the nature of their service delivery models, and their regulatory environments. We also note from your disclosure in MD&A on page 29 that it appears higher rates of regional inflation and raw material supply in certain regions affected your operations. Please explain to us how you evaluated the aggregation criteria in ASC 280-10-50-11 in determining you have only one Flexibles reportable segment. In doing so, explain in sufficient detail how you determined your operating segments have similar economic characteristics, including historical and projected profit measures for each of the operating segments.
Response: The Company respectfully acknowledges the Staff’s comment. The Company believes that the aggregation of the Flexibles operating segments is consistent with the criteria set forth in ASC 280-10-50-11, which provides that two or more operating segments may be aggregated a) if aggregation is consistent with the objectives and principles of ASC 280, b) if the operating segments have similar economic characteristics, and c) if the operating segments are similar in the following five qualitative characteristics: nature of products and services, nature of developing their product, types of customers, methods of distributing products, and similar regulatory environment.
The Company’s analysis of the considerations specified in ASC 280-10-50-11 is presented below.
Similar Qualitative Characteristics
The following factors were considered in concluding the five Flexibles operating segments share similar qualitative characteristics.
a.The nature of products and services – same types of products that are a variety of plastic, paper, and aluminum flexible packaging for consumer products.
The five Flexibles operating segments manufacture flexible packaging for customers in different industries. Flexibles Packaging is also one of the categories typically used across the entire packaging industry when segmenting the market by products with other commonly used categories being Rigid Plastics, Paper & Board, Glass, or Metal
***CONFIDENTIAL TREATMENT REQUESTED BY AMCOR PLC FOR CERTAIN PORTIONS OF THIS LETTER PURSUANT TO RULE 83***
Packaging. The products of the different operating segments may vary by customer, but they are similar in nature (i.e., flexible packaging products).
Each operating segment’s products as described above are similar in that they are packaging products designed to meet specific customer needs, mainly in the food, medical, home and personal care, and pharmaceutical industries.
b.The nature of the production process – same types of production equipment from same equipment suppliers that convert same materials.
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CORRESP 1 filename1.htm Document CONFIDENTIAL TREATMENT REQUESTED BY AMCOR PLC FOR CERTAIN PORTIONS OF THIS LETTER PURSUANT TO 17 C.F.R. § 200.83 (“RULE 83”) April 28, 2023 Via EDGAR Ms. Claire Erlanger Ms. Melissa Gilmore U.S. Securities and Exchange Commission Division of Corporation Finance 100 F Street, N.E. Washington, D.C. 20549 Re: Amcor plc Form 10-K for the Year Ended June 30, 2022 Form 10-Q for the Quarter Ended December 31, 2022 Form 8-K furnished February 7, 2023 File No. 001-38932 Dear Ms. Erlanger and Ms. Gilmore, On behalf of Amcor plc, a company organized under the laws of Jersey, Channel Islands (the “Company”), below please find the Company’s responses to the comment letter to Mr. Casamento, the Chief Financial Officer of the Company, dated March 31, 2023, from the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”). The numbered paragraphs below set forth the Staff’s comments together with the Company’s responses. Page numbers and table numbers in the Company’s responses correspond to page numbers and table numbers, respectively, in the Company’s applicable filing with the Commission. Please note that certain confidential information contained in this letter was omitted by means of redacting a portion of the text. The symbol “[****]” has been inserted in place of the omitted portions (the “redacted information”). Copies of this letter containing the redacted information have been filed separately with the Commission subject to a request for confidential treatment pursuant to Rule 83 of the Commission’s Rules on Information and Requests (17 CFR §200.83). The Company requests that the redacted information be maintained in confidence, not be made part of any public record, and not be disclosed to any person (other than the Staff) as they contain confidential information. Form 10-K for the Year Ended June 30, 2022 Management's Discussion and Analysis of Financial Condition and Results of Operations Presentation of Non-GAAP Information, page 34 ***CONFIDENTIAL TREATMENT REQUESTED BY AMCOR PLC FOR CERTAIN PORTIONS OF THIS LETTER PURSUANT TO RULE 83*** 1.Staff’s Comment: We note your disclosure that Adjusted EBIT from continuing operations and Adjusted Net Income from continuing operations include an adjustment for the amortization of acquired intangible assets from business combinations. We also note from your footnote to the table that amortization of acquired intangible assets from business combinations includes amortization expenses related to all acquired intangible assets from past acquisitions, including $26 million of sales backlog amortization for the fiscal year 2020 from the Bemis acquisition. Please revise future filings to disclose that while the expense is excluded, the revenue of the acquired company is reflected in the measure and that those assets contribute to revenue generation. Your disclosures in your earnings releases furnished on Form 8-K should be similarly revised. Response: In consideration of the Staff’s comment, the Company will add a statement on future Form 10-K and Form 10-Q filings containing a presentation of non-GAAP information, as well as within future earnings releases containing such a presentation, that while the amortization expense related to all acquired intangible assets is excluded, the revenue and all other expenses, unless otherwise stated, of the acquired companies is reflected in the measures Adjusted EBIT and Adjusted Net Income (from continuing operations, if applicable) and that those assets contribute to revenue generation. Note 11, Fair Value Measurement, page 71 2.Staff’s Comment: We note that within the section titled "Assets and Liabilities Measured and Recorded at Fair Value on a Nonrecurring Basis," you disclose that during the fourth quarter of fiscal year 2022, you met the criteria to recognize the related assets and liabilities of the Russian operations as held for sale which resulted in remeasuring the disposal group at its fair value, less cost to sell, which is considered a Level 3 fair value measurement. Please tell us, and revise to disclose in future filings, the description of the valuation technique(s) and the inputs used in the fair value measurement of the disposal group. See guidance in ASC 820-10-50-2(bbb)(1). Please note this disclosure should be made for any material nonrecurring fair value measurements. Response: The Company respectfully acknowledges the Staff’s comment and the guidance in ASC 820-10-50-2(bbb)(1) that requires a description of the valuation technique(s) and the inputs used in the fair value measurement. The Company acknowledges it did not specifically state the valuation technique(s) and inputs used in the fair value measurement of the Russian disposal group in the Form 10-K for the Year Ended June 30, 2022. The Company did disclose in the Form 10-K for the Year Ended June 30, 2022 in Note 2, Significant Accounting Policies (page 55) that the fair value of a disposal group “is determined based on management’s assessment of indicative bids, a market multiples model in which a market multiple is applied to forecasted earnings before interest, taxes, depreciation, and amortization (“EBITDA”), discounted cash flows, appraised values or management's estimates, depending on the specific situation.” ***CONFIDENTIAL TREATMENT REQUESTED BY AMCOR PLC FOR CERTAIN PORTIONS OF THIS LETTER PURSUANT TO RULE 83*** In consideration of the highly uncertain political, regulatory, and economic environment relating to transactions involving Russian assets following the Russia-Ukraine conflict beginning in February 2022, management’s assessment of the following specific factors was used to determine fair value of the Russian disposal group as of June 30, 2022. Management evaluated pre-diligence offers received and discounted them after considering various uncertainties present at the time, including evolving customer decisions on remaining in the region and decisions to move business out of the region. In addition, management consulted with an external advisor to assess the discount that the Russian government was likely to apply to the transaction value given the newly introduced requirement to obtain approval of the transaction and agreed purchase consideration from a Russian government commission prior to the sale. The Company’s filings subsequent to the Form 10-K for the Year Ended June 30, 2022, have included incremental information on how the fair value of the Russian operations was determined. In the Form 10-Q for the Quarter Ended September 30, 2022 in Note 7, Fair Value Measurement (page 17), the Company disclosed it had “obtained indicative bids on which basis the expected fair value less costs to sell the Russian business has been updated.” In the Notes to the Financial Statements of the Form 10-Q for the Quarter Ended December 31, 2022, the Company disclosed the completion of the sale of the Russian operations on December 23, 2022, and the total net cash consideration received upon the sale. The Company will ensure on future Form 10-Q and Form 10-K filings that the Company’s Fair Value Note to the Financial Statements meets the disclosure requirements in ASC 820-10-50-2(bbb)(1) for all material nonrecurring fair value measurements. Note 21. Segments, page 97 3.Staff’s Comment: We note your disclosure of revenue disaggregated by sales by major product and geography. Please tell us how you considered disclosing revenue by industry segment under the guidance in ASC 606-10-55-89 through 55-91. In this regard, we note that investor presentations and earnings calls appear to address changes in sales volumes related to specific industries or market segments such as medical and pharmaceutical, beverage, food, and consumer goods, etc. Please advise or revise accordingly. Response: In response to the Staff’s comment, the Company confirms that it considered the guidance in ASC 606-10-50-5 and related guidance in ASC 606-10-55-89 through 55-91 when evaluating how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors to determine the appropriate categories for disaggregation of revenue. ASC 606-10-55-89 highlights that the extent to which a company’s revenue is disaggregated depends on the facts and circumstances of the company’s contracts with customers. The Company generates revenue by providing its customers with flexible and rigid packaging products, serving a variety of end markets. The majority of customer contracts across all categories are in the form of either a purchase order or the combination of a purchase order with a master supply agreement pursuant to each of which control is typically transferred for all products at a point in time upon shipment to customers. ***CONFIDENTIAL TREATMENT REQUESTED BY AMCOR PLC FOR CERTAIN PORTIONS OF THIS LETTER PURSUANT TO RULE 83*** Following the implementation guidance in ASC 606-10-55-90, the Company considered (a) disclosures presented outside of the financial statements, including in the investor presentations and earnings calls, (b) information regularly reviewed by the Company’s Chief Operating Decision Maker (“CODM”), and (c) other information that is similar to information identified in (a) and (b) that is used by the Company or users of the Company’s financial statements to evaluate the Company’s financial performance or make resource allocation decisions. In determining the categories for disaggregation of revenue, the Company considered the examples cited in ASC 606-10-55-91: (a) the type of good or service, (b) the geographical region, (c), the market or type of customer, (d) the type of contract, (e) the contract duration, (f) the timing of transfer of goods or services, and (g) the sales channels. The Company’s five Flexibles operating segments have different methods for disaggregating revenue as presented to the Company’s CODM, with some breaking down revenue by country and others breaking down revenue by markets that do not have a uniform definition across the different Flexibles operating segments. The Company does not consistently track revenue by industries or market segments across its Flexibles operating segments for internal purposes and does not report this information to the CODM as part of its normal reporting processes. The Company does provide in its investor presentations and earnings calls additional directional, high-level information on sales volume changes related to specific industries or market segments, such as medical and pharmaceutical, beverage, food, and consumer goods. For example, the unique facts and circumstances of the 2019 Novel Coronavirus (“COVID-19”) pandemic temporarily impacted consumer behavior differently across different industries, which the Company highlighted when referencing the short-term changes in the healthcare, medical and pharmaceutical industries. While the information across industries is not used by the Company’s CODM to evaluate financial performance and make resource allocation decisions, the Company believes that discussing directional changes in sales volumes per industry is meaningful to investors at the time such disclosures are made because the information provides additional context and aligns with market metrics discussed by the Company’s customers. The Company’s contracts with customers generally span industries or market segments if the customer is active in multiple industries or market segments. Customer contract terms and conditions, including payment terms, do not vary by industry or market segments. As noted, references to specific industries or market segments are occasionally discussed to provide investors additional directional information on the Company’s overall revenue performance. The Company’s reference to specific industries or market segments is not intended to indicate that there are different economic factors that regularly impact the nature, amount, timing, and uncertainty of revenue and cash flows. The Company has concluded that the disclosure of disaggregated revenue by geography and major product type best represents the characteristics of the Company’s revenue including the nature, amount, and timing of the Company’s revenue. The other ***CONFIDENTIAL TREATMENT REQUESTED BY AMCOR PLC FOR CERTAIN PORTIONS OF THIS LETTER PURSUANT TO RULE 83*** categories cited in ASC 606-10-55-91 (e.g., market or type of customer, type of contract, contract duration) do not differ across the five Flexibles operating segments when evaluated with respect to the Company’s revenue. The Company will continue to evaluate the disclosure of disaggregated revenue in future filings, considering changes in its business and information regularly provided to investors. Note 21. Segments, page 97 4.Staff’s Comment: We note your disclosure that your five Flexibles operating segments (Flexibles Europe, Middle East and Africa; Flexibles North America; Flexibles Latin America; Flexibles Asia Pacific; and Specialty Cartons) have been aggregated in the Flexibles reportable segment as they exhibit similarity in economic characteristics and future prospects, similarity in the products they offer, their production technologies, the customers they serve, the nature of their service delivery models, and their regulatory environments. We also note from your disclosure in MD&A on page 29 that it appears higher rates of regional inflation and raw material supply in certain regions affected your operations. Please explain to us how you evaluated the aggregation criteria in ASC 280-10-50-11 in determining you have only one Flexibles reportable segment. In doing so, explain in sufficient detail how you determined your operating segments have similar economic characteristics, including historical and projected profit measures for each of the operating segments. Response: The Company respectfully acknowledges the Staff’s comment. The Company believes that the aggregation of the Flexibles operating segments is consistent with the criteria set forth in ASC 280-10-50-11, which provides that two or more operating segments may be aggregated a) if aggregation is consistent with the objectives and principles of ASC 280, b) if the operating segments have similar economic characteristics, and c) if the operating segments are similar in the following five qualitative characteristics: nature of products and services, nature of developing their product, types of customers, methods of distributing products, and similar regulatory environment. The Company’s analysis of the considerations specified in ASC 280-10-50-11 is presented below. Similar Qualitative Characteristics The following factors were considered in concluding the five Flexibles operating segments share similar qualitative characteristics. a.The nature of products and services – same types of products that are a variety of plastic, paper, and aluminum flexible packaging for consumer products. The five Flexibles operating segments manufacture flexible packaging for customers in different industries. Flexibles Packaging is also one of the categories typically used across the entire packaging industry when segmenting the market by products with other commonly used categories being Rigid Plastics, Paper & Board, Glass, or Metal ***CONFIDENTIAL TREATMENT REQUESTED BY AMCOR PLC FOR CERTAIN PORTIONS OF THIS LETTER PURSUANT TO RULE 83*** Packaging. The products of the different operating segments may vary by customer, but they are similar in nature (i.e., flexible packaging products). Each operating segment’s products as described above are similar in that they are packaging products designed to meet specific customer needs, mainly in the food, medical, home and personal care, and pharmaceutical industries. b.The nature of the production process – same types of production equipment from same equipment suppliers that convert same materials. T