In a state of flex - the European flexible packaging industry

Packaging Professional magazine
,
15 Nov 2010
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Jan Homan, recently appointed Chairman of the Flexpack Europe trade association, speaks to Eoin Redahan on the challenges and opportunities in the European flexible packaging industry.

Poet Laureate Robert Burns once grumbled that the best laid schemes of mice and men often go awry. Conversely, a more arbitrary path can sometimes be beneficial. Jan Homan might have had ‘absolutely no clue’ he would end up in packaging as a callow student, yet since July this year he sits as Chairman of the trade association Flexpack Europe (FPE).

Born in Rotterdam, in The Netherlands, Homan embarked upon a career in the banking sector after graduating in Economic Studies at the University of Commerce, in Vienna, Austria. He spent several years working in finance in Germany, the USA and Austria, before becoming the manager of Austrian and Eastern European operations for printing ink manufacturer Hartmann Druckfarben Gmbh (HDG), Frankfurt, Germany. His time spent with HDG brought him into contact with the flexible packaging industry.

After seven years at HDG, he became CEO of Teich flexible packaging group, in St. Pölten, Austria. He then became CEO of Constantia Flexibles, of which Teich is part, in 2004. Homan points to his broad experience in preparing him for his role in Constantia. ‘It’s basically my banking experience and definitely running a print ink company. If you have responsibility for a smaller company, you are perfectly prepared to run a much larger job’.

Homan was also involved in the ‘foundation’ of the FPE and has been involved in its activities, and those of its predecessor organisations, for the past 20 years. In 2010, FPE members asked him to go forward for the position of FPE Chairman to help develop a stronger voice for the flexible packaging industry.  

Flexible change

Homan has seen many changes in the industry in recent years, ‘The flexible packaging market has grown, partly taking market share from rigid due to better resource efficiency. Packaging has generally been growing quicker than the Gross National Product in countries’.

In recent years, he says, the industry has been brought closer together, ‘There’s a big consolidation happening. No one ever thought that a number one and number two in the industry [Amcor, headquartered in Melbourne, Australia, and Alcan Packaging, Chicago, USA] could ever come together, but it has happened’.

However, he notes that the European flexible packaging industry is generally quite splintered, especially in countries where the retail structure differs. ‘In Italy [for example], you have many small shops. The flexpack industry is [made up] of more medium-sized private owned [companies]. International flexpack groups are less important there than, let’s say, in France, the UK and Germany’.

In comparison to other industries, Homan feels the sector has a long way to go in this regard, ‘If you see the flexible packaging industry and you compare it with other industries, it’s still very fragmented. Glass is a good example, where you have three or four players and that's basically the end of it’.

A single voice

Homan’s main aim as Chairman of FPE is to attain a ‘single authoritative voice’ in the industry. ‘Strong associations are very important. We have strong links to the national associations in Italy, France, Germany and the UK, just to name a few. Since this year, the Turkish flexible packaging organisation is also an associate member of FPE. Flexible Packaging Europe represents roughly 75% of the European turnover for flexible packaging. So, you’re really starting to get one voice for the industry’. He adds that, ‘Authorities don’t like to talk to individual companies, they prefer to speak to somebody representing the sector. Typical challenges facing the industry as a whole are therefore better dealt with by a strong association, as are food contact compliance and sustainability issues’.

Material shortage

He also mentions the continuing scarcity of raw materials as a worrying trend. ‘The biggest challenge at the moment is to get rid of the shortage of raw materials, which is partly caused by the fact that, in times of area-wide growing demand, the alternative uses for these materials have better margins than the packaging industry’.

This, in turn, adversely affects members. ‘What happens is that, all of a sudden, the supplier gives you the message that they are not going to produce this or that raw material any more. So, there is a constant challenge. The minute you have to put a new raw material in because the old one isn't made any more, you have to go through a qualification process again with your customers’.

Homan uses the example of polyester to illustrate this trend. ‘Obviously, the polyester suppliers found more attractive markets and applications to serve ahead of the flexible packaging industry, where they can earn more money. This is a major challenge to the industry. Prices of polyester have more than doubled. [They will] almost triple in a couple of months’ time. All FPE can do here is to make published increases of raw materials transparent’.

Leading the way

In relation to current FPE activities, he feels that, ‘being pro-active gives you the best chance to be in the driver’s seat. FPE is contributing in improving the supply chain [of food and drink products] by supporting consumer forums and international projects and programmes for packaging and sustainability. Due to its excellent packaging-filling ratio, flexible packaging can play a major role in contributing to resource efficient and sustainable consumption of food’. In the area of market analysis, he says, ‘FPE offers statistical benchmarks to allow participants to see their position in comparison to [the rest of] the industry. Of course, this is done in close cooperation with lawyers to ensure compliance at all stages’.

However, he adds, ‘making flexible packaging more cost-effective is down to the individual members rather than the association’.

Steps have also been taken to make suppliers open up their books more on technical issues to ensure the best  possible food safety, for example, by raising transparency on substances used in printing inks to ensure compliance along the food supply chain. He also thinks that EU food contact legislation should, ‘switch towards more exposure, risk assessment, and base food contact legislations rather than just tightening measures due to further progress in analytical methods.’   

Overall, Homan is optimistic about the future of the European flexible packaging industry, ‘[I expect] continuous growth due to our resource efficiency advantage. Demographical change will lead to more demand of low-weight and convenience packaging and that is where flexible packaging can score. We can strengthen FPE further by increasing memberships, and by continuously attracting medium-sized companies, especially from Eastern and Central Europe, as well as from Turkey’.

Further information

Flexible Packaging Europe, AM Bonneshof 5, 40474 Düsseldorf, Germany www.flexpack-europe.org