Firm footing

Corrugated players continue to face challenges but, finds Waqas Qureshi, the market remains optimistic and in good shape.

Which markets do you supply to?Marc Chiron, DS Smith: DS Smith provides packaging solutions to tens of thousands of customers in over 30 countries across sectors including consumer goods, e-commerce, food and drink, electronics, pharmaceutical and automotive. Our customers include the biggest brand names in the world along with family run businesses across Europe and North America.Steve Moss, Cepac: We primarily serve the food and drinks industries with a wide range of corrugated transit, decorative and display packaging. We also produce corrugated packaging for industries such as hazardous chemicals as well as many industrial goods.David Wilbraham, Saica Group: Our customer base is spread across all end user segments, this includes fast-moving consumer goods, produce, e-commerce and trade.Adam Platts, VPK Packaging, UK & Ireland: We provide sustainable corrugated packs from standard and customised boxes to shelf ready packaging and e-commerce solutions.David MacDonald, Cullen Eco-Friendly Packaging: We currently supply over 34 countries globally, a number that is constantly growing as we target new geographies and sectors. We’ve developed an extensive suite of sustainable products and packaging that meet the needs of the medical, produce, horticultural, retail, food and drink sectors, as well as new innovations such as our Fibre Bottle.

How was trading in 2022?Marc Chiron: Trading in 2022 was in line with our expectations, even through a difficult energy and inflationary situation across Europe. In general, the industry saw lower volumes year on year, but we continue to grow our market share and have a strong customer focused long-term strategy. We have just announced our full year financial results for 2022/23 and despite a challenging operational environment we have achieved a 35% increase in profitability. We have continued to invest in our business, including a number of ongoing customer-led projects, and in our decarbonisation and energy efficiency programmes.Steve Moss: 2022 was a challenging year and the market adjusted following the pandemic and we narrowly missed some targets. Although we had the turbulence of adapting to work during the lock-down, our team adapted well and supply chains held up very well, particularly paper. For 2023, we expect to see a higher turnover than we achieved in 2022 and we are on course to achieve this.David Wilbraham: The first half of 2022 was extremely busy with global events such as the pandemic and the conflict in Europe putting pressure on supply chains and markets. As the year progressed, the business adapted to these new environments and somewhat normalised. By the end of the year, many supply chains were full as demand dropped with the onset of the cost-of-living crisis.Adam Platts: While 2022 continued to see several challenges regarding energy costs and capacity for the packaging sector, we were able to meet our customers’ changing demand patterns for products through remaining agile and flexible, something we are all very proud of. Customers and consumers are continuing to demand sustainable packaging and our corrugated solutions have helped to meet this need across a variety of sectors and we anticipate this demand continuing in 2023 and beyond.David MacDonald: Growth has been strong as global demand for sustainable alternatives to plastic have soared. Only a few years ago company sales were £16m, and due to this soaring demand we have now more than double our sales in 2022. As a result, our Glasgow-headquartered firm is becoming a global leader in the space. We now have over 300 staff members and have created more than a billion plastic-free products in the past two years.

Have you invested this year?Marc Chiron: We have been investing in two Greenfields and have numerous Brownfield programmes to strengthen our operational footprint. In parallel, we have accelerated our focus and spent on innovation and have a new strategy using innovation expertise across Europe to ideate and bring new solutions to life.Steve Moss: Yes, we have invested in new equipment throughout the Group, including the first Koenig & Bauer ChromaCUT PRO in the UK. Investment is a key aspect of our business every year, so 2023 is no different, including a significant move to solar power for our Rotherham site. We also continue to ensure our operators are best-in-class, thanks to ongoing training. We have also announced ambitious strategic investments for our Rotherham site.David Wilbraham: Saica Pack has opened its new £50m flagship facility in Livingston, Scotland. We’ve also invested heavily into our Wigan operation, consolidating two locations into a single site. These investments serve as a signal of the company’s commitment to the respective regions. Additionally, we have invested in an exciting new B2B App. The app provides a full service to customers who can now manage their relationship with Saica quickly, easily and agilely.Adam Platts: We’re investing significantly in out our sites in Selby, Banbury and Limerick – especially in capital expenditure. In addition, and across all our sites, we have invested in our employees to retain and attract good people in what is a very competitive labour market.David MacDonald: We absolutely have. To meet demand, we’re constantly innovating and scaling up. We have a large, 14-acre site, on which we’re expanding thanks to a recently announced £15m expansion plan. Additionally we have just completed a £4.2 million extension to our UK manufacturing site and distribution centre. We design and build our own patented machines and tooling technologies, which is crucial when you’re replacing plastic packaging with sustainable alternatives.

Are you and your products involved in supply chain and logistics? Marc Chiron: Yes, our solutions have a key role to play at the heart of the supply chain efficiency for our customers. The big trends we are seeing is the continuing focus around carbon usage and so we are designing solutions every day that optimise logistics, reduce empty space, improve line productivity and use less material. We have a tool called the Circular Design Metrics that helps us to measure this impact and also helps our customers to make informed decisions and lessen the impacts that their supply chains have on the environment.Steve Moss: Yes, corrugated packaging is an important element of any supply chain. There has certainly been flex in the supply chain for the last 12 months or more and we are now starting to see some semblance of balance in the supply chain. A general softening of economies and demand is also helping get the supply chain back into balance.David Wilbraham: We view supply chain and logistics as a key component for our customers. In the world of online-shopping and deliveries, manufacturers need to be flexible and Saica are constantly reviewing our supply chain solutions to understand how we can provide the best service for our customers. We conduct a lot of contingency modelling and is in fact what led to us recently open a new warehouse at our Saica Pack Ashbourne site in Ireland.Adam Platts: Yes, corrugated packaging is integral to the supply chain for both primary and secondary packing applications. High impact graphics on corrugated boxes is a growing area, especially to provide the impact today’s e-commerce brands demand. Ensuring print quality and turnaround is key and our team works hard to deliver the packaging designs that meet this need. Our packaging technologists work very closely with our customers to maximise efficiency to ensure they can fully utilise logistics networks and warehouse capacity.David MacDonald: When it comes to sustainability and replacing plastics with alternatives, the supply chain plays a key role. We replace brand’s plastic packaging within one month with a corrugated or moulded fibre alternative. We have also created strong relationships and partnerships with leading fulfillment houses and couriers, allowing brand’s products to be delivered to retail stores or consumers homes safely and in a sustainable way.

What are the main challenges that you are facing? Operational/energy costs? Materials costs and supply chains? Staffing? Sustainability demands?Marc Chiron: I think we are well positioned in terms of how we lead the way to the circular economy and provide new solutions for our wide and growing customer base. But, if there is one thing we talk a lot about, it is ensuring that we are bringing in the best talent from inside and from outside the industry. Talent that can help us think in different and diverse ways and that can help us develop the best digital and data solutions and innovation programmes and ultimately set us apart from our competition.Steve Moss: Our biggest cost centre is paper. These raw material costs have been a roller coaster for some time, but we have now seen a bottoming out on paper input costs I believe. Energy prices are still a concern, thus our investment in solar. Sustainability is a hot topic, but the good news for us is that the materials we use to make the packaging are fully recyclable and totally sustainable. Corrugated is a true winner when it comes to the green debate.David Wilbraham: Cost increases have been a challenge across all parts of the economy and Saica are not immune to that. All our investments, whilst being market driven, are designed to deliver the most cost-effective solution for our customers.Adam Platts: Attracting and keeping good people is a primary focus and here our investment plan and support to employees across the business helps us to attract and retain talent at our production sites. Despite the many operational challenges we face today, the demand for sustainable and protective packaging continues to rise. The renewability and recyclability of paper based corrugated products are attractive environmental characteristics for packaging consumers.David MacDonald: Fast growth requires access to talent. Our expansion is creating 120 new jobs, but the labour market is tough right now, and the post Brexit effect has made this more challenging. Equally, the brilliant talent we attract is hugely motivated by not just our growth, but our innovation and sustainability capability.

What is your message to the sector?Marc Chiron: Sustainability topics are essentials to generate long term business growth. Innovation is a great opportunity for our industry to support customers in overcoming challenges, thanks to smarter solutions.Steve Moss: Hold your nerve – things are starting to look a little brighter!David Wilbraham: Agility is the key. An agile business will succeed!Adam Platts: Sustainable corrugated packaging continues to play an essential role in helping protect goods right across the supply chain – we’re a great industry and a great sector to work in and should be proud of this.David MacDonald: Cullen can design and manufacture 100% plastic-free corrugate or moulded fibre solutions within one month, to help brands replace their single-use plastic packaging now and at scale.

Marc Chiron is sales, marketing and innovation director, Packaging, DS Smith, the global corrugated packaging giant. The group operates in more than 30 different countries, with over 300 sites, and employs over 30,000 people worldwide.

Steve Moss is group managing director of Cepac. With manufacturing sites in Rotherham, Darlington, Doncaster, Rawcliffe Bridge and Altham, the company is an independent producers of transit, decorative and display corrugated packaging solutions.

David Wilbraham is sales and marketing director UK and Ireland, for Saica Group, one of the leading paper and corrugated companies in Europe. The group employs more than 10,000 employees with a presence in countries including Spain, France, Italy, and the UK.

Adam Platts is sales and marketing director, VPK Packaging, UK & Ireland – the global producer of recycled paper, corrugated cardboard packaging, solid board packaging, cores and tubes, employing over 6,500 people across 70 locations in 20 countries.

David MacDonald is owner and chief executive of Cullen Eco-Friendly Packaging a manufacturer of moulded fibre and corrugate packaging. Cullen said it has produced over 1 billion plastic-free products in the last two years to over 34 countries globally.