Van Genechten Packaging, the family-owned Belgium-based secondary packaging specialist, has grown its footprint in Europe following the joint venture signed with UK packaging group CartonCare in October. Frank Ohle, CEO of Van Genechten Packaging Group and Jérôme Cahu, General Manager of its Angoulême site discuss their road map for the company, which is forecasting a turnover of €400m* for 2022.
What was the driver behind the joint venture with CartonCare?
FO: Over the last two to three years, the premium business was one of Van Genechten Group’s key growth segments and the UK deal was a logical consequence of what we want to achieve in the mid to long term: to be a leading premium player in Europe. Our development strategy is market oriented and CartonCare Group – comprised of Pendragon Presentation Packaging, CartonCare and MSO Cleland – is in line with our desire to grow our premium positioning. Our aim is to be more closely connected to premium customers.
What are the opportunities for premium packaging with this deal?
FO: CartonCare’s core market is the UK, so with this acquisition we are leveraging our footprint and giving our European business a serious boost. Each of CartonCare’s three entities have different areas of expertise. Pendragon Presentation Packaging’s strong assets include its specialization in rigid box technology, and this was a market segment that we needed to expand into. With Pendragon we are now on par with our competitors in this area. CartonCare Group, meanwhile, provides us with expertise in high-quality flexo printing with cold foil. The biggest of the three sites, MSO Cleland, has a similar offer to what we do in Angoulême in France and in Riga (Latvia) in premium spirits packaging, for example.
How does CartonCare complement your geographical footprint?
The company operates three production sites in the UK. These join Van Genechten Packaging’s current production network which includes the HQ site in Belgium, two sites in France, three in Germany, one in Poland, two in Hungary and one in Latvia. Our factory in Moscow serves the local Russian market. We’re working on growing our presence in Europe for the next couple of years and there are plenty of growth opportunities here in our core markets, so we currently have no plans to grow outside the region.
Are there other white spaces in your European activity?
For now, the UK was the most important one. We are a privately owned company, so we don’t have a private-equity mindset; we don’t grow for growth’s sake, we grow when it makes strategic sense.
In addition to the JV with CartonCare, this year we’ve invested in boosting capacity at our Polish site with a new location near our existing plant that over the next 12-18 months will offer co-packing and finishing as well as warehousing space. In Hungary, Van Genechten Packaging opened a second site in Komárom, which includes 10,000m² devoted to production.
How has your premium business progressed over the last few years?
JC: Throughout the pandemic, we worked on expanding our premium brand portfolio. This has paid off as our volumes for this part of our business have increased significantly; premium currently accounts for around 10% of our turnover. We attribute this to the strength of our creative and sales teams and our investments in new technologies. The arrival of CartonCare in our group is a great opportunity for us to further boost the segment.
Market shifts are also a boon to our business as fiber-based packaging in all of our sectors is gaining ground as brands look to move away from plastic.
How are you dealing with the rising costs that we are now seeing in the industry?
JC: We take a partnership approach with our clients. We work with them to share additional costs, but we’re also putting things in place to avoid increased costs.
Our investments in automation, productivity and new, more sustainable technologies also play an important role. A few years ago, Van Genechten Packaging debuted a partnership with German company ClimatePartner, and as a result the carbon emissions at our Angoulême and Riga sites are measured every year, allowing us to optimize and decrease our carbon output. At Angoulême, emissions fell by 50% between 2019 and 2020 as a result of investments in infrastructure including energy-efficient systems, raw materials and a more streamlined organization. In Riga, emissions were down by 17% over the last 12 months. This all helps us keep our competitive position in terms of costs.
FO: With the energy crisis we may have to redefine which plants are next in our decarbonation plan as those with the highest energy consumption will benefit the most. We also have to take into account the arrival of CartonCare in this strategy.
What is your focus innovation-wise?
FO: The first topic when it comes to innovation is design, and the second is finishing technologies. CartonCare, for example, has a few smart printing technologies from the pharma sector that are not yet applied to premium. Materials is another area of focus; our teams scout novel materials from around the world – including from product sectors outside of packaging. The premium sector is the best way to introduce these before embarking on economies of scale.
JC: In terms of finishing techniques, we invested in cold-foil technology, a plastic-free alternative, in Angoulême this year. We’re also exploring new shaping possibilities and are seeing strong interest from our customers for the natural effect of the reverse side of cardboard. Innovation today is about how to promote packaging that is both beautiful and sustainable.
Where do you see the premium market headed?
FO: It’s tough to have visibility beyond the next six months, but we are certain that the market will be stable in the long term.
Frank Ohle, CEO Van Genechten Packaging (left); Jérôme Cahu, General Manager of Angoulême site (right)
*This amount includes the CartonCare joint venture
