Constantia Flexibles counts on monofilms

Interview – Alexander Baumgartner, CEO, Constantia Holdings

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Alexander Baumgartner, CEO of Constantia Flexibles Holding GmbH
Alexander Baumgartner, CEO of Constantia Flexibles Holding GmbH

Alexander Baumgartner, CEO of Constantia Flexibles Holding GmbH, looks at the market conditions in the plastics market before opening the new plant in Ahmedabad, India. Constantia Flexibles is one of the largest manufacturers of plastic films. In the new plant in India, Constantia Flexibles will only produce recyclable packaging films. Susanne Blueml conducted this interview on 27 August 2019 in Vienna.

Susanne Blueml: What is the strategy behind your activities in India?

Alexander Baumgartner: We need something new because the packaging industry has a problem. So far, it has served customer needs, such as: ‘The print image has to be a little more glossy.’ Then we applied a layer of varnish, and it became glossier. The next customer said – ‘The biscuits I pack in there are no longer crispy after six months, so I need a better water vapor barrier.’ Let’s add another layer of some other great plastic! And the story went as far as to bring 7-, 8-, 10-, 13-layer plastics onto the market today. Everything that the consumer loves or the brand manufacturers recommend to the consumer. What is the consequence? Everything we produce is no longer recyclable because we can no longer separate the layers that we so brilliantly technically brought together, at least in an economic way.

SB: But why a plant in India – isn’t that rather an industrialized country problem?

AB: If you drive through India, you will see rubbish on the left and right side of the road. And if you take a close look at the garbage, it’s not paper, it’s not cardboard, it’s not glass, and it’s not aluminum. It’s just plastic. Why? Because even the poorest of the poor would collect the cardboard, the glass, the aluminum. It is a source of income for them; it has a value. If they collect plastic, they get nothing because it is worthless. And this is our dilemma – we produce something that is worthless even for the poorest. Even though we have taken a resource from the earth, even though the product is light, with great properties, we leave it there, dump it, or whatever.

SB: But in the long run it can’t go on that way . . .

AB: Exactly. Consumers and politicians no longer accept the fact that a product is produced with great use of resources, capital, and labor – and that’s it. As a company, we have a problem here, but also an opportunity.

SB: But films have to guarantee specific properties?

AB: The barrier properties are indispensable, whether it is water vapor, UV protection, oxygen, or light. So that the consumer who buys the product does not have to consume it after 24 hours, but may have one, two, three, or four weeks. The contents must remain edible, taste good, look good, and smell good. On the other hand, I need packaging that I can reuse. We are a company that believes in recycling – something that has been removed from the ground should be used as often as possible. And to follow this principle, we have to develop recyclable products, i.e., monomaterials. They are manufactured on a single plastic basis, in our case polyethylene, and can, therefore, be returned to any polyethylene recycling process. What was rice packaging today could be a garbage bag tomorrow, a park bench, or a car part.

SB: Do you feel driven by customers or politics?

AB: By both. You can’t imagine how often I’m approached at dinner with friends or neighbors – “What are you doing, aren’t you ashamed of yourself?” Politicians have increased the pressure here and thus also the pressure on our customers. That made us all move faster.

SB: Especially in Europe?

AB: Not at all. We have nine plants in India. In some states, there are obligations imposed by the government that the same amount that we produce each year must be recovered through collection companies.

SB: What infrastructure did you have to create?

AB: India is a very dynamic country. Almost overnight, such collection and recycling companies sprung up like mushrooms and offered their services. These companies would not have existed without the legislator. So politics plays the main role.

SB: Which decision-making processes in your company preceded the changeover?

AB: To be honest, I didn’t have to convince my shareholders for long. It’s about bringing something completely new to the market and giving it a certain competitive edge for some time. This is of interest to every shareholder.

SB: But then I will buy a nice recyclable film and create another CO2 footprint in another place?

AB: That’s not the goal, that’s the transitional solution. We opted for India because we believed the politicians there were capable of exerting pressure on the recycling economy. But we see a market for this product family well beyond India. We also have plans for Europe in the drawer. We can export the India model quickly.

SB: Can you ensure that your recyclable materials can do everything that existing materials can do?

AB: We can cover almost anything. But the real question is – How highly specified do products have to be? An example from a major brand manufacturer – He liked our monomaterial approach and wanted to test it. The previous packaging was over-specified in terms of durability, so we were able to convince the customer’s marketing department to reduce the requirements in this respect somewhat because the product is always consumed within a much shorter time. So the customer started to optimize the supply chain and warehouse range, duration, and inventory levels. Thanks to this discussion, film properties are also called into question, some of which are exaggerated, over-specified, and really no longer necessary from today’s point of view.

SB: You already have a certain recyclable share in your products – aren’t you cannibalizing your own market?

AB: We see it this way – If we don’t do it, someone else will do it, so we’d rather do it ourselves.

SB: So is the current packaging world an overkill?

AB: I’m against generalization. Just like you’ll never hear from me, the paper is bad or something. There are products that are very well and properly packaged in material A or B. You won’t get a blood transfusion from a jute bag in the hospital, so the plastic bag is the better option.

SB: The use of monomaterials results in recyclable materials. Do you also use recyclate?

AB: Yes, we already use recyclate for certain applications in the detergent sector. The material that we use today for our EcoLam family, however, is pure virgin material or post-industrial waste. Not waste from consumers – that would be the next step for us. The next but one step would be to introduce material from the collected polyethylene fractions into the production process.

SB: How far are you with your activities in India?

AB: We are in the market launch phase. The extruder has been turning for two or three weeks, and we are printing. The whole chain has only been in operation for a few weeks. We are currently providing industrial quantities to our customers so that they can fill, do their transport and storage tests, and so on. This means that we will have the first results at the end of September. This will continue until the end of the year. Then comes the moment of truth, and we have to face the consequences – in most cases, our solutions will be able to meet the high demands on the packaging. If a customer then – as in the example before – makes a compromise in special cases because he likes the story, it is a success for all of us.

SB: But there is still one problem…

AB: The only obstacle we still have today is food contact products. There we do not yet have the approval to use recycled material. But the technology will continue to develop there as well. In the current phase, it is not essential since we have so many non-food applications.

SB: Then, what is the next step?

AB: If we are beyond the learning curve of the next three months and have feedback from all customers, then it will be the next step to decide where recyclate can be used. You can’t just propagate recycling management; you also have to pursue it actively.

SB: Do you also want to invest in recycling structures beyond these certificates, which you are now acquiring in India? To possibly ensure a higher quality of the recyclable material?

AB: I don’t think that we, as a company, have the resources to build up recycling structures of a necessary size seriously. I am assuming that an industry of its own will increasingly come together and find itself. We would then buy from these collectors, who would then become suppliers.

SB: If you are now going on with mono material on PE-basis, a cycle would be easier to represent. The example of a PET bottle shows it. The step for the PE film might not be so big?

AB: I think there’s one component missing from your equation, and that’s the collection purity. With PET, you take advantage of the fact that it is a bottle. So a PET bottle is something that the human being, the average consumer, recognizes. It is either a glass bottle or a PET bottle. So being in front of two collecting bins and says, is it a PET bottle or is it a glass bottle? There I have a relatively clear, almost pure stream. But I don’t think you can force the consumer to distinguish green squares or green circles or blue squares on the back of the label. It makes sense to collect glass, aluminum, or paper separately. Then you can separate the organic waste, and then I have residual plastic.

In other words, in my recycling streams, I have to manage to separate the PE Group from the PET Group, from recyclable materials containing nylon, and so on. And these are techniques that the recycling industry has mastered. They are not more expensive. These are relatively simple methods used in physics.

We have also looked in detail at technologies for separating the individual layers in multilayers. And as I said at the beginning, they exist. It is technically possible. But the effort – energy and costs and time – is still disproportionate from today’s point of view. You have to bet on something in life: We believe in the monomaterial solution, that it is more realistic, more understandable for the market, compared to a technically and chemically complex separation of multi-layer systems.

SB: With the keyword recyclable, the average consumer thinks that the bottle becomes a bottle, and the film becomes a film again. The term ‘recyclable’ is a very difficult term that evokes false associations. How can you deal with this, and how do your customers do it?

AB: So we can’t really meet it. I don’t necessarily find the topic of downcycling bad per se. Even if I downcycle, I offer a second use, a second life for a product where until yesterday, fresh goods were used. When I downcycle it, there’s still a positive contribution to the whole in the pyramid. Is then in the next round of recycling the product a bit less valuable? Hardly. Until yesterday we threw it away. The paper industry has shown very successfully how to handle it, and that is exactly what we will do.

SB: With this plant in India, you are now initially serving pilot customers in India as well?

AB: Right. In recent months, we have conducted several trials with selected customers, ranging from multinational corporations to local players, to ensure that our products meet the high requirements of our customers. These pilot projects were very successful in both the hygiene and food sectors. Smaller manufacturers are also interested in our Ecolam products and play a pioneering role in some cases.

SB: Mr. Baumgartner, thank you for the interview.

Susanne Blueml, packaging journalist led the interview, in the Constantia headquarter in Vienna. First published in a shorter form in the September 2019 issue of VerpackungsRundschau, it is published here with the permission of the author.