24 printweek.com 22 January-4 February 2018 22 January-4 February 2018 printweek.com 25

League table Folding cartons Next issue Show preview: Packaging Innovations 2018

opportunities, whether their ambitions are local or global. Market dynamics It’s a highly competitive market involving Plastic’s pain large amounts of commodity produc- tion, combined with rigorous delivery demands and service level agreements from customers. By contrast, some parts of the sector (of which more later) are both brings happier high-value and high-margin, involving multiple printing and finishing tech- niques. Consolidation has not been limited to the carton converters, it’s a constant theme days for cartons elsewhere in the supply chain as well, with one carton veteran describing the situation as “like being in a sandwich”. The current backlash against plastic packaging has provided a new fillip “Our suppliers have consolidated so for operators in a sector that has changed significantly Words Jo Francis there’s only a few of them now, our custom- ers are also huge, and we’re sandwiched in the middle,” he laments. ir David Attenborough could just the carton category had actually been in An example is Kraft’s takeover of turn out to be the biggest influ- the doldrums, with brands replacing car- Cadbury’s. Two substantial customers in encer yet when it comes to the tons with flexible plastics and plastic trays. their own right became one even more future for carton printing. “This could be the saving grace of an enormous customer, with Kraft subse- The veteran broadcaster’s Blue industry that was taking a nosedive,” he quently leveraging its buying power Planet series, with its distressing states. “Carton volumes had flatlined, there accordingly and drastically reducing its scenesS of turtles and albatrosses tangled in was no growth, against a background of number of suppliers. humankind’s carelessly discarded plastic corrugated that is growing at 5%.” “When you look at big sourcing, it’s on a detritus, has resulted in mass outrage The welcome wave of fresh interest, pan-European or international scale,” about the use of plastics and society’s then, is also likely to result in further inno- notes the carton printer. throwaway culture. vations, to make sure cartons tick even The impact of so much M&A activity is This public backlash, combined with the more boxes for purchasers and concerned that what was the middle ground “has sim- ban on the importation of plastic waste by consumers alike. ply fallen away”, leaving a handful of very the Chinese government as of this month, Paul Hartwig, production director at large players at the top of our table, and is leading to a fresh awareness and an pharma and food packaging specialist then a pretty substantial gap between those understandable rethink from major brands Firstan, says the firm is already receiving companies – all part of, or owned by, large and retailers on their use of plastics. “We’re new enquiries as a result of the plastics cri- multinational groups – and the independ- To cap it all, Prime Minister Theresa sis. “We’re being asked where we can help ents, with The Wilkins Group emerging as May has now outlined long-term govern- being asked with the issue of plastics, and we’re produc- the largest of those. ment plans to eradicate all unnecessary where we ing more folding carton trays,” he says. “We However, the independents aren’t being plastic waste by 2042. can help are also looking at cartons that have barri- squeezed out because of all this M&A activ- Jon Clark, general manager at BPIF ers, for example a PE layer, and working ity, rather the opposite in fact. Cartons, views all of this as a major fillip for with the with coating manufacturers on water- “It’s actually been good for the rest of the the sector. “If there’s one thing that’s help- issue of based food grade coatings.” marketplace,” says Clark. “A lot of custom- ing the folding carton industry right now ers don’t want to be a little fish in a very big it’s the anti-plastic wave, which is more like plastics, and Coming together pond.” a tsunami at the moment. we’re pro- While this momentous shift towards more “Big retailers don’t actually like the fact “Cartonboard is one of the most environ- ducing more sustainable and recyclable packaging that some of the packaging groups are now mentally friendly materials, and we are try- options is likely to be the next big thing for solidation over recent years, and we now driver, and the volumes involved are huge Training of the next generation is also an “People are as big, or bigger, than they are,” observes ing to convince specifiers to use folding the sector, the current big thing is, well, all have companies like Graphic Packaging – even if the margins are not. issue, but here the sector has some good not being James Williams, managing director at cartonboard instead of other materials.” carton about size. Specifically, the enormous International that is totally dominant in Alexir Packaging chairman Robert news to report. educated at PrintWeek’s FMCG Packaging Printer of A number of retailers and brands have amount of M&A activity that has taken food packaging and Multi Packaging Davison, who is also chairman of the BPIF “People are not being educated at school the Year, Curtis Print & Packaging. now pledged to reduce their use of plastics, trays... We place in recent years, which has completely Solutions which is probably dominant in Cartons special interest group, says the about manufacturing or packaging, so school about Alexir’s Davison also confirms that his including a pledge from Iceland to elimi- are also... changed the shape of the industry. healthcare,” he says. average return on sales across the sector is BPIF Cartons has created a training manufactur- company has found new opportunities nate or drastically reduce plastic packaging working The expansion of multinational giants Viewers of television programmes such 2%-2.5%, “which is pretty small for the scheme that is aimed at apprentices or opening up as a result. “Certainly some on own-label products by the end of 2023. such as Graphic Packaging International as the BBC’s Inside the Factory will be famil- sort of investment that is required in this trainees at converters,” explains Davison. ing or pack- doors have opened that a few years ago “This is such an exciting time for the car- with coating and Multi Packaging Solutions – itself iar with the vast scale of manufacturing environment.” “The first trials took place before aging, so would have been closed to us. Larger com- ton industry,” enthuses one senior carton manufactur- acquired by the even bigger Westrock last and the huge volumes of packaging There are headwinds for the folding car- Christmas, and a full programme is being BPIF Cartons panies that wouldn’t have entertained industry manager. “There is such a back- year – has resulted in a sort of polarisation required for FMCG products, be that tea ton sector that have a lot of commonality organised for 2018. We are looking at gain- SMEs are more willing to talk to us now,” lash against plastics. It’s a really interesting ers on of folding carton converters. bags, biscuits or pasta. Just imagine, for with the printing industry in general: the ing accreditation so that Apprenticeship has created he says. time for cartons because it’s the only mate- water-based Clark says the UK carton sector repre- example, how many packets of generic negative impact of uncertainty caused by Levy funds can be used for it. We are trying a training A further knock-on benefit for the indies rial that’s truly sustainable.” food grade sents a circa £1.2bn business overall, with a painkillers are sold every day. Brexit, and rising input costs due to unfa- to enhance training across the sector.” has come about thanks to the fact that Market research expert Neil Osment, market split of roughly 70% food packag- For some of the very large producers vourable exchange rates, although anecdo- The next generation of folding carton scheme” M&A deals don’t always go according to director at research and consulting firm coatings” ing, and 30% pharmaceuticals and beauty. there’s no doubt that the number of fin- tally it seems that such increases are easier professionals will find themselves in a sec- Robert Davison plan, as the unfortunate example of NOA-Prism, says that prior to recent events Paul Hartwig Firstan “Cartons has seen a huge amount of con- ished sheets on the floor is an overriding to pass on than in commercial print. tor that certainly presents some interesting Alexir Packaging Essentra shows. The PLC acquired ➔ 26 printweek.com 22 January-4 February 2018 League table Folding cartons

Clondalkin’s Specialist Packaging division Folding carton converters out via new or different pack treatments is in a $455m deal in 2014. As part of the con- Rank Company Principal director Turnover unrelenting, according to Glossop’s solidation that followed it decided to relo- Sidebottom. “Everyone is chasing the new, cate the former Clondalkin Great Harwood 1 Graphic Packaging Int’l Hilde Van Moeseke £226.2m the different the eye-catching. That’s the and Northampton operations to a new 2 Multi Packaging Solutions Tim Whitfield £180m* big driver, everyone wants to look different plant at its Newport centre of excellence. or have a unique pack on the shelf.” Much disruption and loss of business 3 Mayr-Melnhof Packaging UK Jose Rubio-Estrada £54m She also reports that turnaround times ensued, with the astonishing outcome 4 Essentra Packaging Paul Forman £43.6m* are increasingly being squeezed, with the being that Essentra then decided to shut pressure on to convert jobs quicker and down the Newport cartons facility alto- 5 Huhtamaki FS Delta Rosemary Mason £41.9m quicker. gether just a year after it had opened, tak- 6 The Wilkins Group André Wilkins £31.4m ing a £35m hit in the process. Digital direction “All of that turnover that used to be at 7 RAP Graham Williams £24.7m In common with the rest of the printing Great Harwood, Northampton and industry, digital production technologies Newport was sloshing around the market 8 Cartoncare Ralph Chalmers £21.3m are playing a part in cartons, albeit rela- and has done wonders for the smaller play- 9 Alexir Packaging Robert Davison £20.7m tively small at present. Glossop was the ers,” says Clark. first user of Highcon’s Euclid and then Indeed, a common theme among the 10 Harrison Packaging Mary Caffry/Michael Baum £18.6m Beam digital cutting and creasing devices. independent players is that they are able to 11 Firstan Andrew Hartwig £18.3m While Qualvis Packaging and Alexir have play to their strengths, by offering the sort both opted for digital printing setup com- of flexible service that might not necessar- 12 Simply Cartons Craig Mather £15.5m bining technology from Xerox, Kama and ily be on offer from a larger group. 13 Medica Packaging Gerard Harford £12m Tresu. Kalas Packaging installed the UK’s One carton printer describes a typical first HP Indigo 30000 press for folding car- scenario, thus: a customer has a contract 14 Qualvis Print & Packaging Jason Short £10.3m tons at the end of 2016. with a large carton converter for deliveries Elsewhere, the first beta sites for the 15 Westrock Packaging Systems UK Steven Voorhees £10m to be made once a week, but then needs much-talked-about B1 inkjet presses from something additional in a hurry, for exam- 16 Curtis Print & Packaging James Williams £9.6m Heidelberg and Landa Digital Printing are ple for a promotion. Their ad hoc request at carton printers, and although these would ‘crash the plan’ because it is outside 17 Boxpak Robert Parkinson £8.9m presses are yet to arrive in the UK carton the terms of the contract, potentially 18 Kingston Carton Arend Buitendam £8.1m printers here are studying the likely eco- resulting in a large additional fee. nomics of such production techniques By comparison, smaller suppliers by 19 Trenton Box Eden Douglas £8.1m with interest. their nature are likely to be nimbler, and be 20 Glossop Cartons Brian Sidebottom £8m Just as in other parts of the packaging in a position to pull out all the stops to help. market, such as labels, the craft production “We’re printing something this after- Notes trend involving small manufacturers and noon for immediate delivery,” confirms Graphic Packaging International (GPI) figure includes GPI, GPI Europe UK, makers is generating the sort of new busi- Firstan’s Hartwig. “Every two-to-three GPI Bardon and GPI Gateshead. Multi Packaging Solutions overall UK turno- ness that is ideal for digital production. weeks we’ll have an urgent order where a ver was £236m in 2016, the group has changed its year end so 2017 figures “The digital market is interesting, there customer is short on something. They rely unavailable. Essentra group turnover in latest financial year was £1.1bn. are lots of people talking about it but not on people like us to help.” RAP: Rapid Action Packaging, manufacturing facility is in Ireland. *=esti- that many people doing it,” says Alexir’s Glossop Cartons sales director Jacky mated turnover. Source: PrintWeek Top 500, Companies House, NOA-Prism Davison. “It’s an area of major interest to Sidebottom agrees. “A lot of people are us. We are dealing with start-up businesses unhappy dealing with massive multina- ing growth in that part of the market, with who have requirements for small quanti- tionals, as they don’t get the TLC they get much attention on ‘premiumisation’ – the ties, or for a sample batch of cartons to pre- from companies such as mine,” she says. development of packs that promise a luxu- sent to a retailer.” “There’s a lot of goodwill and loyalty rious experience within. The complexities of carton shapes, sizes involved in our business. You feel for your Williams at Curtis Print & Packaging and printing requirements mean these customer and want to make it happen for “There’s a says that his firm has developed a niche products don’t necessarily lend themselves them. There are lots of benefits to dealing lot of good- market that is all about applying his team’s to the web-to-print market as readily as with an SME. You’re dealing with the deci- considerable know-how to bring to life cus- more standardised products such as leaflets sion maker, and people care.” will and tomer aspirations for their brands. and business cards. However, Alexir has In the case of high-value items such as loyalty “Our beauty industry clients appreciate put considerable investment into develop- beauty products or perfume, the packaging involved in the value that packaging can bring to a ing a web-to-carton workflow that is now is an intrinsic part of the customer buying product, whereas if it’s a fish fingers packet being deployed by partner Macfarlane experience and plays a vital role in the per- our busi- that’s not necessarily the case,” he says. Packaging for its ‘Brand it’ custom carton ception of the product. ness. You And this crucial perception of brand range through Macfarlane Online, and it And while there is understandably much value has only become even more impor- will be fascinating to see how these emerg- focus on the exterior of cartons to deliver feel for your tant in the internet and social media age. ing on-demand carton solutions develop. that all-important shelf appeal, Celloglas customer “Packaging sets the tone; it’s the first Overall, it seems there is plenty for fold- recently carried out a micro-experiment and want to interaction the customer has with the ing carton converters to be positive about, with the Retail Institute, looking specifi- product. If you search for unboxing videos not least because a folding carton cannot cally at the effect of different interior pack make it on YouTube, there are millions of them. be supplanted by digital media. Clark finishes: shiny gold, matt black and plain. happen for And if you look at the beauty bloggers and describes his members as “pretty upbeat”, The perceived value of both the gold and vloggers, the first thing they talk about is and says he fully expects to see more people matt black pack was considerably higher. them” the packaging. If it’s not right it sets a nega- moving towards cartons. Thanks to David A Smithers Pira report on luxury packag- Jacky Sidebottom tive tone,” says Williams. Attenborough, cartons might just be on the ing, published last year, pointed to continu- Glossop Cartons For many customers, the quest for stand- cusp of gaining some fresh appreciation.