In an exclusive conversation with Packaging MEA editor Ben Daniel, Windmöller & Hölscher sales director Thomas Lengenberg talks about the company’s performance in 2019 and the way forward.
Ben (B): How was 2019 for Windmöller & Hölscher in general, and in particular here in the MEA region?
Thomas Lengenberg (TL): 2019 in general was a very positive year for us, not just a the business perspective but also because we celebrated our 150th anniversary. We held a unique event in which we welcomed thousands of customers to our headquarters in Germany in March. That gave us the privilege to gain an under- standing of how much we are appreciated for what we are doing. As for the market scenario, things were a little slower in 2109 than in previous years. There was not much growth but the figures were quite similar to what we had in 2018, which was lower than 2016/2017.
The Gulf region in particular was white because of the changes here, the energy costs and additional taxes. People were reluctant to make new investments, which is sad, because investment is necessary for development. However, there are projects for export-oriented companies. They give benefits to companies working in this field. That said, I am very positive about KSA, while the rest of GCC is still struggling.
As for Africa, there are several bigger countries with huge populations. Here, there are many converters but the level of quality is very low. But in each country, there are at least a few with higher packaging standards and levels. Windmöller & Hölscher was fortunate to sell machinery to several African countries, including Nigeria, Kenya, Ghana, Ivory Coast, Zambia and Tanzania. In North Africa we were successful in Algeria and Egypt. Other countries in Africa are developing. It is a slow and difficult mar- ket. People have to be convinced to buy a product that is not cheap. The challenge is the volume, which is far less than what the machines can deliver. They are looking for quality but the volumes are much less. The consumer markets are not fully developed, although supermarkets do exist and are developing. Printers and converters are visiting these African countries. I am very positive about. A few years ago we started with one sales person for the African region. Now I have two of them; they are busy and I am considering hiring a third.
B: How many extrusion, CI flexo and rotogravure machines have you installed and finalised in Africa?
TL: In 2019, we sold 15 machines to Africa that are mainly extrusion machines, followed by CI flexo presses, two rotogravure presses and two paper sack lines. We are active in all these segments and people are investing in our machines. Business has picked up quite a bit.
B: What role is Windmöller & Hölscher playing within the circular economy realm?
TL: We are consultants and everybody knows a single-layer material which has the properties of a nine-layer film would be nearly impossible to develop. However, have introduced a PET replace- ment. With the laminates of PE and PET and our MDO stretch technology, we have developed a PE film that can replace PET film, which helps more in easy recy- clability of PE and PE stretched film than PET laminates. We are also looking at the lamination process. We are looking into the possibilities of substituting layers or laminates with stretched material. It is quite successful. I don’t have the exact numbers globally, but we have sold more than 15 machines last year just for this segment.
B: For what applications are these PE films developed and fulfilled?
TL: All kinds of pouches and other small sachets which are regularly used by today’s consumers on the retail shelf. We are also working on our extrusion equipment to increase the capacity to accept more recycled material. The challenge with recycled mate- rial is the strength and its barrier and migration capabilities.
Realistically, packaging has to be attractive. Consumers don’t just buy what they need, they buy what they find attractive. We are in contact with raw material suppliers such as Dow and Borouge to come up with common developments and see how we can address this issue.
B: Coming to the print and converting domain, CI flexo is a proven, established and mature technology in North America and Europe. However, here in the MEA region, we are lagging behind. What is your take on this?
TL: There is more activity in the CI flexo technology than rotogravure. Maybe not in certain markets, but is a global trend. Rotogravure business has reduced considerably in 2019, although not in Asia. However here in the MEA region, rotogravure is not as active as it was before. We had a few customers two or three years ago who were active and positive with rotogravure and wanted to invest first in one machine and later went on to four machines. They had big plans. The first lots of machines are still running but they didn’t follow the plan with this business. Given that rotogravure cylinder making takes days, as opposed to flexo plates that can be done immediately, these converters prefer flexo. Besides, the quality of flexo has gone up substantially. In the open house we held in March, we took an image at 11am and did the whole process and then printed on the CI flexo press at 1pm. The entire pre-press process was done in house, much faster than rotogravure. This is advantageous for flexo technology.
B: What is your take on brand owners’ perceptions on print when it comes to flexible packaging? There are brand owners who would like to have high shelf impact with very attractive colours that you achieved in gravure. But now this can be achieved in CI flexo as well. Are you still working on investing in rotogravure technology or are you diverting your efforts to flexo?
TL: Even if the gravure market has slowed, we still believe there is a continuous market for rotogravure, particularly in Asia and South America, and sometimes there is a request from brand owners that they want it in gravure, regardless of cost and time. We are working on making the gravure process better, cheaper and faster, to be more competitive with flexo and make it less expensive for converters.
B: Regarding digitisation, your machines and support is going to a new level now.
TL: It is certainly going to a new level. We have not taken just one step, but five steps. The Rubygo system that we have introduced enables the customer to control the whole production process. They have access to a lot of data in order to improve the process. Also, we like to receive data from our customers to know the performance of the machines. It helps improve our performance and also helps our customers to improve their performance to benchmark other areas and segments, and also to save money.
B: Do you offer this as a standalone solution or as a package?
TL: This is a basic package offered to all clients. There is a lot of adoption work to do from the existing ISP to the new RubyGo system. We would like to give every customer the new machine, after which they can decide the extent of usage.
B: What happens to the older machines? How do you implement that? Are there compatibility issues?
TL: Yes, it depends on the year of manufacture. We are working on system upgrades on the older machines. There are machines that are five years old, and it is relatively easy to upgrade these, whereas upgrading machines that are 15 years old involves more effort. In case of machines that are 25 years old, you need to decide whether you would like to invest your money (in upgrading them) or just go in for a new machine.