BOPP film maker Treofan has held its ground under difficult market conditions in the last fiscal year, maintaining its annual turnover of around half a billion euros while stabilizing profits based on an improved product mix and growth in premium segments. At the annual press meeting in Frankfurt, Germany, CEO Peter Vanacker said the company had made good progress in implementing its long-term strategy of providing innovative solutions for technologically advanced applications at competitive cost. Treofan is active in around 90 countries around the world.
Treofan Shifts Up Gear
BOPP film maker sees positive momentum, grows in premium segments
March 7, 2014
Critical success factors, according to Vanacker, included restructuring efforts in the European organization, a recalibration of internal processes to better meet the needs of major brand owners, and a comprehensive refinancing including a capital increase of $48.5 million by the group’s major shareholders. In parallel, Treofan invested a double-digit million in its asset base in Germany, Italy and Mexico.
“We have initiated a turn-around, but a lot remains to be done”, says Vanacker, who took the helm at Treofan in September 2012 after an international career at Bayer. “We have been able to regain innovation leadership in important growth segments such as in-mold labels. We have managed to activate our close relationships with major brand owners much more successfully, and we have made good progress with regards to our cost structure.”
Yet price pressure remained strong, not least driven by new, state-of-the art assets in low cost locations, providing a certain challenge, given the age of some of Treofan’s own assets, Vanacker says. To offset this, Treofan would continue to pursue its strategy of differentiation through technologically advanced solutions. “In parallel, we must continue to improve our processes and overall cost structure in order to further increase competitiveness.”
The coming year will be characterized by investments. Treofan plans to put around $7 million into research and development, $21 million into upgrades of existing assets and $42 million into a new production line in Neunkirchen, Germany, for a total investment sum of $70 million. Based on this, the company aims to grow aggressively in premium market segments.
“Our core strength lies in innovative solutions in technologically challenging segments, from in-mold labels to complex flexible packaging and separator films for high-performance batteries and capacitors”, Vanacker explains. “This is where we are going to apply our unique breadth of knowledge and experience from all types of applications – packaging, labels, technical and tobacco films – even more strongly, in close cooperation with customers and partners along the value chain.” One major objective would be to integrate additional functionalities directly into the film, eliminating additional process steps such as lamination.
The market environment, however, remains challenging, according to Treofan’s CEO: “We continue to see a strong increase in capacities, along with a general lack of investment discipline in our industry. The development of raw material prices and, in particular, of the cost of energy in Germany – where we have our largest production site – remain uncertain. With regard to the latter, I can really only warn against Germany further jeopardizing its competitiveness as a manufacturing location.”
In light of this, Treofan’s economic focus for 2014 remains on the bottom line, not the top line. “Our ambition is to be the global market leader for advanced quality solutions”, Vanacker summarized. “Customer understanding, innovation, portfolio management and related processes and assets at the highest level – these are the values that will define Treofan going forward long-term.”