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Innovation for a sustainable world

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Innovation for a sustainable world

May 23, 2013 - 06:09

The pulp and paper industry is battling difficult economic trading conditions and the growth of new media, but the situation is far from pessimistic with innovation firmly on the agenda. Sally Cousins reports on the speakers at the RISI European Pulp and Paper Outlook conference.

The picturesque city of Vienna played host to an impressive line up of CEOs from all sectors of the industry for a unique insight into the industry. In his keynote address president and chief executive of Andritz, Dr. Wolfgang Leitner gave a unique reflection on the company’s own record of sustainability and the paper and pulp industry’s role in creating a sustainable future.

He raised the question of how difficult it is to innovate in an industry that is so mature. “Andritz has had a good track record for innovation – some more than others but it has been continual. We could probably have done more and faster but the industry is mature and conservative so it is highly understandable.”

Dr. Leitner also explained that Andritz was playing an instrumental part in helping mills to gain full knowledge of their mill capability. He cited the company’s ‘Dynamic Process Simulators’, which replicates the whole mill process.

“We are looking to do our best with a goal to make your business more productive and sustainable and profitable.” Dr. Leitner also outlined Andritz’s full commitment to supporting mills in the future regarding energy from biomass.

Focusing on economic forecasting Professor Andrea Boltho, tutor in economics from Oxford University gave a glimmer of hope that the Eurozone would come out of recession. “Yes, eventually we will. No country stays in recession – not even Argentina!”

He also added that although forecasting is not a precise science, the emerging gap between the North and South Eurozone was of concern. “My prediction is for a very modest recovery and a similar situation to Japan – there are many parodies.” Professor Boltho ended his speech on an optimistic note. He added: “We recover by the end of this year and then will achieve growth in 2014, but I doubt we will get into growth in the south of Europe but Britain could.” 

Innovation is like gold dust

Director general of CEPI Teresa Presas gave an insightful focus and stated that the industry is doing better than other industries but had a cautionary word of warning. “We don’t have enough political attention and we need to position our sector as strategic in the economy.”

CEO of Sappi Fine Paper Europe Berry Wiersum talked about the task of achieving innovation in a mature industry. “Innovation is like gold dust as it is the biggest contributor to the bottom line – innovate or die.”

Wiersum also commented that the paper industry should focus on specialty grades and innovate through conversion. “We should think about how to convert challenges into opportunities,” added Wiersum.

Giving the conference an environmental focus was pulp and paper strategy manager from WWF International, Emmanuelle Neyroumande. She focused on the organization’s forward thinking perspective up to 2050. Neyroumande explained that WWF worked with companies to achieve responsible sourcing. She also highlighted that the demand for wood in the future would come from growth in Asia and there is the need to implement change now to prevent huge and irreversible losses.

Following similar environmental slant was independent technical adviser Rachel Butler. She gave her perspective on the new European Union Trade Regulation (EUTR) and what it means for the pulp and paper industry.

Butler explained the difference between due diligence and certification and her role in ensuring sustainability and technical goals are met whilst working within commercial realities. She also explained the need for consideration when importing pulp from outside the EU, although she also acknowledged that many companies were already very aware. “You often know what goes on in the forest, but EUTR just ask you to record it,” explained Butler.

Customer at the center

The conference also saw the presentation of the European CEO of the Year Award given to Mondi Europe & International’s Peter J Oswald. He gave a thorough overview of the current market and a key insight into Mondi’s future strategy.

Oswald explained that the “Mondi way” puts the customer at the centre of its vision. He also took the opportunity to announce that Mondi plans to re-enter the market in China after exiting it a number of years ago after what Oswald termed as a “cut- throat and competitive market”. He added that Mondi “did not have the very best experience”. This time, however, the company plans to re-enter with a different strategy. He explained: “We will bring in our material from our Eastern Europe plants and we will have Western clients.”

Mondi’s expansion by acquisition and growth in Eastern Europe has been a big success for the company. Oswald explained: “In 2014 we will start up the machine for kraft paper in Ruzomberok and Steti and 83% of our business are in lower cost countries – this is an asset to us.”

Talking about the challenges the industry faces during the CEO/executive panel discussion Thomas Ehrnrooth, vice president marketing & communications, Paper Business Group UPM warned that the industry is just at the beginning of facing the impact of the digital age. “We do need to listen to the consumer – that is the first rule. We always tend to listen to customers but not consumers. We are in a crystal ball stage where we are all wondering when this is going to stop.”

Cepi’s Presas said rising energy costs posed one of the biggest problems in Europe and caused an inability to be as competitive as the US.

Sappi’s Wiersum on the subject of investment said: “I look at what is being decided in board rooms and boards are deciding to invest outside of Europe. My own company is spending a lot of money but not in Europe.”

But all on the panel remained optimistic about the future. Andritz’s Dr. Leitner said: “Europe has a combination of good assets and people. It has good cashflow that can be invested in the future.” 

Focus on Packaging

McDonald’s strategy for sustainability

McDonald’s is of the most recognizable brands in the world but what is its stance regarding its sustainability concerns? McDonald’s Europe senior manager, sustainable supply Jacqueline Macalister set out its view of the importance of sustainability to its future strategy.

To put the consumption levels of the McDonald’s packaging in perspective, Macalister explained that 1.5 billion fries boxes were used each year and with packaging use on such a grand scale even the smallest of material reduction can have a big impact. 

Macalister went on to explain that the company had been working hard on sustainability issues for over ten years with packaging reduction being at the heart of its plan. “We want to reduce how much we use, achieve zero waste and use renewable and sustainable material. At McDonald’s we understand that packaging has a function but it has to be enjoyable.”

The company is striving for a target of 100% recycled or certified virgin fiber by 2015, although it has been using 100% fiber from legal and acceptable sources since 2008. It also plans to use achieve a figure of 100% renewable material by 2020 across its full range of packaging.

“Innovation to us is about getting people together and communicating across our supply chain including testing new packaging at our restaurants and we know that a key part of this communication takes place upstream at our board mills.”

The company’s focus on sustainability has included products coming out of styrene and into paperboard during the 90s as well as recent developments such as recycling 100% of used cooking oil and transferring to trucks for use as biodiesel.

What does the future hold for sustainable packaging?

During a panel discussion all panelists discussed a range of issues they had encountered in the drive for a sustainable pack.

Eliano Apicella, purchasing director, packaging & promotional materials Barilla said: “We always make a real life cycle analysis to better understand the solution. There are sometimes limits to paper and sometimes plastics is more suitable than paper.

Jurgita Girzadiene, sustainability manager packaging, Smurfit Kappa Development Centre commented that when it comes to weighing up the benefits of virgin or recycled fiber, it is important to help customers to make the right choice.

Chris Hallam, managing director of Concept Packaging raised the point that technological advancements were needed to enable paper to have more opportunities similar to thermoforming for plastics. He said: “There is no reason why processes can’t be developed around paper. We have to look at new ways to use pulp and papers.”

All members of the panel agreed that traceability is key. Barilla’s Apicella said: “We have a responsibility to show our packaging comes from certified forests. It is too much to show that the packaging originated from a certain patch of forest, but the paper needs to come from a certified forest. We have a duty to the consumer and future generations.”

On the subject of using recycled or virgin fibers McDonald’s Macalister said: “There are misconceptions about recycled and virgin fibers. I think we can’t aspire to the utopian idea that the consumer is always going to have the correct message.”

Darryl Rice, end user director, BillerudKorsnäs said: “We launched our Environmental Product Declarations (EPD) to be clear about what we do. You need to be open and honest and set yourself targets.”