Salinas Packaging Group – A year of meeting challenges

25 years have passed between the creation of Salinas in 1995 (5,000m2 and a staff of 30) and the advent of the Salinas Packaging Group (29,000m2 and 150 employees). How do you see this journey?

It’s been a tremendous adventure. It actually started in the 1960s, when my father began making padded boxes for shoes, our core business at the time. But between 1995 and 2020, Salinas underwent a profound change. A large part of our production shifted from standard boxes to luxury boxes for fragrance and cosmetics — two sectors that now account for 40% and 30% of our turnover. In the midst of the Spanish recession in the 1990s, this diversification was absolutely essential. And it was possible because we have continually invested in technological upgrades for our equipment to reach the goals of excellence and innovation that we set ourselves. We have also had to adapt to societal shifts: digitalization, changes in the function of packaging as well as in the perception of consumers, a shift towards new 4.0 models to meet CSR challenges...

Where do you stand on this matter?

We launched our digital transformation plan four years ago to move to a Lean Management model. Last year we invested 1.6 million euros in a SAP HANA system enabling us to be more agile across our value chain. This should improve productivity by 22%, while drastically reducing our waste. We are currently in the implementation phase. In terms of our approach to sustainability, we set ourselves a zero waste target by the end of 2020. Waste production is a major environmental challenge when it comes to reduction, responsible consumption and recovery. We are activating all levers in this area: from auditing our supply chain to our use of light and water in our offices and, of course, training our teams in eco-design.

It’s been nine months since you took over Fabregas Packaging — quite an audacious move in the midst of the health crisis.

Yes, but it was the right time. In our growth and consolidation strategy, Fabregas was an ideal investment as it allowed us to increase our production capacity without making concessions in terms of quality, sustainability or ethics. Not to mention that Fabregas brought in a BRC certified factory (audited AA last December). Thanks to the acquisition, we have become one of Europe’s largest production sites for luxury rigid cardboard packaging.

Geographically, the site is also strategic.

Indeed, for our European customers, it is a guarantee of proximity and security. And for the rest of the world — I’m thinking of the American continent — we have two plants near major commercial ports. In order to develop this potential, we have set up an international sales office. By implementing a high-quality virtual tour of our plants, this has enabled us to transform our customers’ uncertainties into certainties in these difficult months.

A final word on the impact of the health crisis?

Thanks to lean thinking we have limited the damage: our EBITDA has remained at pre-pandemic levels. Our customer retention rate (93%) and the acceleration of our international expansion weighed heavily in the balance. I’ll also add that we have successfully passed very demanding audits with prestigious groups such as L’Oréal and LVMH. Despite the Covid crisis, we managed to record an 11% increase in sales compared to 2019. Without the crisis, this growth would have skirted 32%, but the most important thing is that we were able to cope. Every crisis puts companies to the test not only economically, but also in their fundamentals. The more a company has invested in its people and team building, the stronger its culture, the more solid it will be in the face of the crisis. That, at least, is what the Covid period has shown for Salinas.