How was trading in 2021 – did you hit forecasts despite the pandemic or was trade affected? What is your company forecast for 2022?
Norman Gierow, SIG: In 2021 we sustained strong revenue growth throughout the year with our performance globally reflecting the resilience of our business. Following the recent announcement of our half year results to 30 June 2022, we remain confident that we can achieve full year revenue growth of 22-24% at constant currency.
Marco Marchetti, Tetra Pack: Despite tough operating conditions in 2021, we achieved a top-line growth of 4.1%. We saw growth in many markets, particularly in China, South Asia and the US. In 2022, we expect to see good top-line growth across all our businesses, supported by visible improvements in priority areas such as quality and sustainability.
David Woodyat, FC Cartons: Trading was good. We continued to work at 100% productivity as a key supplier to the food and pharmaceutical supply chain. We achieved sales growth of 29%, margins held up well, so another great year for Team FC. We have a conservative budget to maintain our position, taking a positive but cautious approach.
Mark Pollard, Pusterla Pollards: Covid again impacted turnover in 2021 which resulted in trading numbers being very similar to 2020. Gross margin was improved. Forecast growth for 2022 is circa 25%.
Olivier Serre, Essentra: Like many other companies, we were expecting 2021 to be the year of the bounce back post-Covid but this did not happen as quickly as expected. We saw demand improving from Q2 2021 in the US, but only after the summer in Europe. Since then, the orders have started to come in thick and fast and the overall performance of the business improved notably in Q4. However, we still have to manage supply chain disruptions. Board shortage is affecting the whole market and is one of the most challenging issues that we have to face day-to-day, like many other businesses. We don’t expect an improvement in supply from the main board manufacturers in 2022. Demand growth in all sectors and the sustainability agendas of many companies, switching exponentially from plastic to board packaging, are factors stretching demand.
What’s your strategy for 2022?
Norman Gierow: In Q1 of this year we announced the acquisition of Scholle IPN and Evergreen Asia. Scholle IPN is a global leader in innovative sustainable packaging solutions for bag-in-box and spouted pouches. Evergreen Asia is a systems supplier of packaging for chilled beverages primarily in the dairy segment in China. We are also looking for a suitable site to build a sleeves plant in India for our aseptic carton business.
Marco Marchetti: Sustainability is the agenda. With this in mind, we are investing approximately €100m per year over the next five to 10 years to develop more sustainable packaging solutions.
David Woodyat: We have plans to invest and further increase the capacity and diversity of our capital portfolio in 2022 and further expand our production facility. Recruiting staff is on our agenda but it’s proving difficult. Our location brings it’s own challenges with so much industry, warehousing, logistics neighbouring us doesn’t help. We believe our approach to investing in our capital portfolio and people has always served us well.
Mark Pollard: We are focusing on efficiencies across our four UK sites and on developing our staff.
Olivier Serre: We have invested in new technologies, with a notable current example being the large format Landa digital press we have installed in our Bradford site in the UK. This piece of equipment brings the benefits of digital technology, as well as the possibility to include serialisation and variable printing on large format sheets. Further investments in several of our sites across many markets focus on improving our services to facilitate more efficient operation of our customers packing lines, such as PiggyBack for leaflets in American and European regions, and our launch of ComboPack in Italy and Spain.
What new print and other technology has caught your eye?
Norman Gierow: With factories operating on an unprecedented scale, production lines need to be more agile, customised and flexible to cope with faster product changes, for example. This also applies to printing technologies. Modern digital printing technologies, where the printed image is transferred directly from a file to a printing press, offer enormous opportunities here in terms of speed and flexibility, but also in terms of print quality, customisation, sustainability and smaller minimum order quantities. In this context, we are working on a totally new solution set for our customers and are already configuring an optimal infrastructure that can cover every requirement even more flexibly.
Marco Marchetti: We are focusing on innovations enabling a shift to a circular economy: from designing out waste and pollution, through keeping products and materials in use and regenerating natural systems. Projects include transforming potential food waste into sources of nutritious food, as well as developing alternative protein-based food applications and introducing cartons that use certified recycled polymers – a world first.
David Woodyat: Not so much the print but the environmentally friendly material which is readily available. We have been surprised at the speed and demand for change from the plastic option to cardboard, paper based biodegradable products. Team FC have attained and retained a carbon neutral status since 2008 and understand that we must all work towards a position where we only use paper-based materials, which can be recycled in any paper waste stream, or can degrade in compost or landfill conditions, back to natural fibres without any harm to the environment. If it ends up in our oceans, it will harmlessly break down to natural fibres. There are materials available that satisfy this requirement.
Mark Pollard: We continue to evolve our production lines to make more use of robotic technology
Olivier Serre: We uniquely operate several print technologies – digital, offset, and flexo – optimising resources in shorter print runs and maintaining high productivity in larger batches, enabling the company to stay responsive to shifting market needs. We recently purchased a hybrid printing press for labels. This reduced both the time it takes for sample printing and material usage for versioned work by up to 80%. It has also significantly reduced processing waste, making the process more sustainable. Digital printing has particularly strong benefits for the pharmaceutical sector in addition to personalisation, where its agility and speed are ideal in supporting applicaitons such as remote clinical trial packs, samples, serialisation and anti-counterfeit technologies.
How is the cartons sector handling and improving sustainability?
Norman Gierow: SIG was the first ever to provide aseptic carton packs without an aluminium layer. By eliminating the need for an aluminium layer, combibloc ECOPLUS – tailored for products that are not sensitive to light – cuts the carbon footprint of SIG’s standard packaging material by 27% when launched in 2010. SIGNATURE 100 cuts this further in 2017, offering a 58% lower carbon footprint than SIG’s standard packaging material by linking the polymers to 100% renewable forest-based materials via a certified mass-balance system. SIG has built on the success of these offerings to create the first full barrier aseptic carton solution without aluminium layer for wider use with oxygen-sensitive products such as fruit juices, nectars, flavoured milk or plant-based beverages. With the acquisition of Scholle IPN, we’re aiming to leverage their experience in EVOH barriers to massively scale our aluminium- free solutions. We are also providing new standards in filling technology. SIG NEO, our next generation filling machine for example, offers the lowest ever carbon footprint (25% reduction in greenhouse emissions per filled pack) and 60% reduced water usage.
Marco Marchetti: Transformational innovation and collective action are vital, which is why we collaborate not just with our customers and suppliers, but also with an ecosystem of start-ups, universities and tech companies, providing us access to cutting edge competences, technologies and manufacturing facilities. Take our fibre-based barrier trial, to replace the aluminium layer in our aseptic cartons, and our recent multimillion-euro co-investment to help set up new complete recycling solutions for carton packages.
David Woodyat: The industry is definitely supporting the retailers, we feel we’ve got the solutions to provide a more sustainable future in packaging. It’s just taking the retailers and consumers a little time to get on board to use the right board.
Mark Pollard: It’s a key focus for the Pusterla group. We have a five year carbon footprint reduction plan and various projects designed to reduce our use of plastics. As part of this, we have created a sustainable team to focus on generating and implementing changes to our sites that reduce our environmental impact.
Olivier Serre: Our Re*flect solution, is a plastic-free alternative to metallised board. We have set specific targets to reduce our impact on the environment. These include reducing our Scope 1 and 2 greenhouse gas (GHG) emissions and becoming GHG carbon neutral by 2040. To support this, we have implemented Zero Waste to Landfill programmes at 13 of our 23 packaging sites and continue to build on this success. In general, patients and consumers are expecting to see companies taking a responsible approach when it comes to resource consumption and recyclability.
What are the main challenges that you are facing?
Norman Gierow: On the one hand we have seen a significant increase in sourcing raw material costs. We have to offset this inflation with even stricter and smarter cost management, with which we have also had good experience in the past, but also through unavoidable price increases. On the other hand, we see the increasing demand for innovations in the field of sustainability – not only from consumers and customers, but also from regulatory side. But here, too, we are confident that we can meet all the requirements – again building on our proven previously mentioned successes in setting new standards for the industry.
Marco Marchetti: The world continues to experience the impacts of the pandemic, including geo-political instability, global supply chain disruptions, resource shortages, employment challenges and inflation. We can’t treat these issues in isolation, and we can’t afford the cost of inaction on sustainability either. Our progress depends on being able to embrace a mindset which drives both growth and sustainability for a better future.
David Woodyat: A constant conversation, but we’re controlling costs at the moment. Our green credentials have served us well – we have invested in light and energy saving initiatives as far as we possibly can. Staffing is a daily conversation. We have always considered our team our greatest asset, it remains a constant focus. For sustainability demands, we have some great solutions for our customers and the industry to meet their sustainability needs. Come and talk to us, we would love the opportunity to help if we can.
Mark Pollard: Most of us have never operated within an inflationary marketplace, so this is a new challenge to deal with. Finding staff at all levels is harder than ever before but we are fortunate to have a highly trained and experienced workforce in place.
Olivier Serre: Inflation is impacting our cost base, so we have to work across a number of fronts; with our customers to recover increased costs, internally to optimise everything we do and with our suppliers to mitigate the impact as much as possible. Maintaining a healthy supply chain remains the top priority in our industry and we are focusing a lot of our time and effort as a business on accomplishing this for our customers.
What is your message to the sector?
Norman Gierow: With consumers and markets across the world demanding more in sustainability, convenience, food safety and reliability, it’s time to set new standards in the packaging industry. A new standard in filling technology, a new standard in digitalisation, a new standard in sustainable packaging solutions. And that is what we are doing, leading the industry into the future.
David Woodyat: Remain focused on change which delivers for your business and the environment.
Mark Pollard: Be strong and pass on those price increases to your customers.
Olivier Serre: We are part of the solution in packaging to address your environmental concerns, tackle productivity issues, overcome digital challenges and face patient safety threats. Let’s work together.
THIS MONTH’S INDUSTRY EXPERTS
Norman Gierow is director global customer marketing and positioning at SIG, the aseptic carton, bag-in-box, and spouted pouch giant. With a global workforce of over 8,000, the Neuhausen, Switzerland headquartered business produced 48 billion packs and generated €2.7bn in revenue in 2021.
Marco Marchetti is vice president packaging materials, sales and distribution solutions, at carton packaging giant Tetra Pak. The firm has a presence in over 160 countries, with over 25,000 employees, It sold over 192 billion packages and over 100,000 processing units were in operation.
David Woodyat is managing director of FC Cartons, a BRCGS AA compliant company with ISO 9001, ISO 14001, ISO45001 and PEFC certification, It provides die-cutting and creasing, window patching, pick and place, folding, gluing and nesting finishing solutions to the carton, print and packaging industries.
Mark Pollard is managing director of Pusterla Pollards. The Pollard Group was acquired in March 2021 by Pusterla 1880. Pusterla is a Milan-based, family owned, packaging business that operates within the premium drinks and beauty markets.
Olivier Serre is sales and marketing director at Essentra Packaging, the multinational secondary packaging manufacturer specialising in the supply of cartons, labels, leaflets, and printed foils for the global healthcare, personal care, and beauty industries.
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