PL
Integrated
Report 2021

Flexible Packaging Segment

In 2021, the Flexible Packaging Segment generated record results, reaching sales revenue of PLN 1,170 million (growth by +25%), of which PLN 621.7 million (growth by +26%) was represented by export sales. Higher sales resulted from the optimal utilisation of production capacity and the growing operating effectiveness. Despite the broken supply chains from the Middle and Far East, as well as changing costs, thanks to the dynamic activities of the Segment in attracting alternative materials, extraordinary results on operations were generated. At the same time, increase in exports to the level exceeding 53% of the total sales contributed to obtaining record results. The largest export markets are the Western and Central European countries, such as: Germany (19.7%), the Netherlands (17.7%), Italy (8.4%), Hungary (6.7%).

+25
%
annual growth of sales revenue
+26
%
annual growth of export sales

2019 2020 2021
Sales revenue (PLN million) 785 938 1,170
of which foreign sales (PLN million) 387 494 622
Share of foreign sales in sales revenue (%) 49.3 52.7 53.1
Sales by volume (thousands of tons) 65.6 90.7 92.8

The flexible packaging recipients comprise international concerns as well as established Polish and European companies. These include, among others: Nestlé, AB Foods, Upfield, McCormick, Koninklijke Douwe Egberts, Brüggen, Dr. Oetker, Aryzta, Orkla Foods, Perfetti van Melle, and also Prymat, Maspex, Tarczyński, Mlekovita, Mokate, Foodcare, Animex, Bakalland, Serpol Cosmetics, Sokołów, Koral, Mlekpol, and Woseba. The manufactured packaging is dedicated mainly to the instant food sector, but there are also major recipients in the confectionery, fat, dairy, meat, pharmaceutical and chemical industries. Further, the main recipients of polypropylene films comprise the following European companies: Sylvaphane Holland B.V., Uniflex, Delo, Dettmer Verpackungen, Laszlopack, Perfon.

Strong player on the market of packaging and BOPP films

The Flexible Packaging Segment is represented by Alupol Packaging S.A. in Tychy and its subsidiaries, Alupol Packaging Kęty and Alupol Films. The Segment is a leader in packaging manufacturing in Poland, with the estimated market share of over 20%, as well as a recognised packaging manufacturer in Europe. At the same time, the Segment is the largest Polish manufacturer of easily recyclable polypropylene films, with production capacity of 60–80 thousand tons a year, and over 5% share in the BOPP films market in Europe.

Production optimisation

Thanks to the optimisation of the second BOPP films manufacturing line launched in 2019, Alupol Films has significantly extended its production capacity, whereas the broad portfolio of the manufactured films, attraction of new customers and consequent strengthening of the brand on foreign markets has enabled major sales increase. This is particularly important for the strategy of the FPS, consisting in income sources diversification and value-added chain extension. The films manufactured at the Oświęcim plant are partially used and refined (printing, lamination, cutting) by Alupol Packaging S.A. and Alupol Packaging Kęty Sp. z o.o. Moreover, polypropylene film is a recyclable material, which is important in the achievement of the objective to replace packaging with such that complies with the circular economy concept.

Ecology and environmental protection trends

In 2021, similarly as in the earlier years, the packaging sector was strongly affected by the environmental protection trends within the world’s economy. Despite the absence of unequivocal regulations and guidelines defining packaging fit for recycling, the FPS concentrates on ecological improvement of the manufactured plastic laminates (thinner structure, higher homogeneity, smaller printed area), while still guaranteeing the safety of the packed products. Intensive work on creating more environment-neutral solutions and their implementation at the customers is related to making many tests and adjusting the packing lines to the specifics of new laminates.

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Following the investment projects completed in the recent years, the EPS – a leader in the market of flexible packaging in Poland and Europe – avails of optimal production facilities in reference to market expectations. The capital investment in processing plastics, production of polypropylene and polyethylene films, including high-barrier ones, as well as simultaneous extension of the technology of processing and refining paper, will contribute to strengthening the FPS position on the European market and enable the Segment to generate very good results.

The process of estimating the market value of the FPS

In 2021, there was carried out a project of valuation of and checking the investors’ interest in the Flexible Packaging Segment. The offers received have confirmed the valuation of the Segment but did not guarantee the shareholders of Grupa Kęty S.A. a premium over the value generated by the Segment within the Capital Group, specifically considering the costs related to the transaction conclusion, including taxes.

Research and innovation

Following the trends observed on the packaging market, the FPS cooperates with its customers and carries out many projects aimed at the development of thinner, more homogeneous and recyclable laminates. New solutions in flexible packaging are based mainly on the use of polypropylene and polyethylene films in laminates. The currently implemented new PPBTM films based on polypropylene are produced in the blown-film extrusion process. They may be used as a mono-film or as a component of homogeneous two-layer laminates, where the second layer is made of BOPP film manufactured at Alupol Films in Oświęcim. The BOPP/PPBTM laminates reflect very good mechanical and barrier parameters, much better than the BOPP/BOPP laminates. Thanks to these properties, among other things, they may be used in packing many types of food, e.g. instant foods, seasonings, coffee, fresh meat, cold cuts, bread, etc. The laminates comply, at the same time, with the guidelines of the ‘European strategy for closed-circuit plastics’. In that regard the OPP/PPBTM laminate was awarded with the Made for Recycling certificate, confirmed by research carried out at the German Fraunhofer Inistitute, in compliance with the bifa Umweltinstitut GmbH methodology.

There has also been developed packaging based on refined and coated papers with heat-bonding and barrier properties. One of environmental activities was modernisation of a tandem extrusion machine at Alupol Packaging Kęty, thanks to which production of laminates based on paper coated with barrier plastic is now possible. This eliminates aluminium foil from laminates, with simultaneous maintenance of similar barrier properties as provided by the products to date. The new-technology laminate has been tested with regard to fitness for recycling, and a positive result confirmed with a certificate was achieved.

All the proposed solutions guarantee food safety and may be printed either with the rotogravure or flexographic techniques. Due to the specific properties of the PPBTM and HBF9TM, the 3-, 4- and 5-layer laminates available on the market, containing aluminium, plastic and paper, may be replaced with 2- or 3-layer laminates of lower basis weight and more homogeneous structure. This means that the laminates require less material than the ones applied so far, which contributes greatly to reducing the quantity of packaging introduced to the market and the impact on natural environment.

Aluminium Systems Segment
Results of the Segments