Tim Sykes talks to Alexander Baumgartner, CEO of Constantia Flexibles, to hear his frank thoughts about how the industry can move forward in the most sustainable manner.
TS: In the flexibles business, there's always this dichotomy between the focus on packaging waste that we're seeing very fiercely across Europe and, on the other hand, the resource efficiency and the low carbon footprints that it gives rise to. Is the current focus on plastic waste maybe created a little bit unfairly by the wider society when you consider the environmental footprint you actually have as a company?
AB: That's a very valid question and not an easy one to answer. Let me start with how I see the overall picture and why I have some sympathy with public opinion as it is today. If you drive up and down the road in countries like India, for example, you will see a lot of trash left and right of the road. If you look a little bit closer, you will not see any paper. You will not see any glass. But you will see a lot of plastics. What’s the difference between plastic and all the other packaging materials in a country like India? It’s value. There’s value in a used tin can. There’s value in an old newspaper, value in a glass bottle that has been thrown away. But there is no value in a plastic bag or a pouch. This is a fundamental problem. The other materials and industries all developed a recycling stream and the basis of a circular economy but we didn't. That's a mistake of the plastics industry because we focused on developing our super-cool technical capabilities, like high-tech 13-layer substrates that adding various properties. We ended up with this high-tech multilayer plastic product which gave perfect UV barriers, moisture barriers, perfect oxygen barriers, meeting the needs of the customer because product then lasts longer. We increased shelf life by days, weeks, even months in some cases. But at the same time I think we did something bad, because the product only had one life. In this respect the other materials have done a better job at ensuring whatever they develop is recyclable.
So as an industry, we need to rethink the way we develop products and try to develop monomaterial solutions, which can be detected in sorting systems, and recycled using existing waste streams. But how do we add the required protective barrier properties in mono-layer structures? To be very black and white, those companies that solve this problem will be the winners in our industry.
TS: We've seen some eye-catching announcements by some of your large competitors in terms of high barrier monomaterial solutions. Speaking of the industry as a whole and this great collective task, can you quantify how far we've progressed down that road already?
AB: It’s very difficult to quantify this because I don't know where the end of the journey is. I know where we need to go and I know everybody is working on the same thing but, to use a racing analogy, we don't know exactly know where the finishing line is. How far is the industry on a scale to from zero to 100? Maybe we are between 10 and 20. We are at the very beginning. The race has just started.
It’s important to view this in a bigger picture, not just confined to Europe. For instance, I have not seen a lot of players who are working in this direction in the US.
TS:…and there are converters that have brought out new generation monofilms for Europe but are still exclusively selling their multimaterial versions in North America.
AB: Relatively speaking, recycling is still a non-issue in the US market. We may find that pressure will come not from politics, but the Walmarts of this world putting price pressure on the brand owners. As for the global brand owners like Nestlé or Unilever, you cannot play the role of a green business, look after the environment in Asia, in Europe and do all the environmentally harmful things in the US, because this will backfire. So those guys need to have a global approach when it comes to the impact of their packaging and products.
TS: In the context of the so-called war on plastics and the very justified reasons for the concerns people have about plastic waste, there are voices across society and in our industry who would take issue with the idea that the solution is to move towards monomaterials and a circular economy in flexible plastics, but rather to adopt alternatives such as renewable materials, paper-based alternatives or bioplastics. How do you view the threat and perhaps the opportunities represented by these alternatives?
AB: Let me start with biodegradables. It’s probably the biggest threat, because it's the biggest bullshit I've ever heard. If you look at the biodegradable reality, it comes down to industry vs. household standards. When you pick your vegetables or your fruits and you put them in the bag, these bags are nearly all industrial biodegradable, not household, which means that for biodegradation they need to be subjected to a specific humidity level for at least 120 days in an industrial facility.
Here in Austria, for example, the waste collection companies or the state waste collecting organization forces the retailers to separate these biodegradable bags whenever they trash them, because the product will deteriorate very soon leaving smaller and bigger micro-plastic pieces all over the place, which actually hurts the recycling stream and shuts down the valves. So as a consumer, you think you’re buying something biodegradable but the reality is it's incinerated because it's so bad for the recycling stream. At this point, you have done nothing good for the environment.
Then we come to the raw materials: these are not available in sufficient quantities so in order to produce enough sugar cane, say, you have to cut down trees. In other words, you need to use spaces which are not currently available in the world today. What I fear is that one day the consumer will find out he or she has been cheated, and this will backfire on the industry.
Coming back to the other part of your question: the alternative materials. Of course you have the other materials rushing to fill the plastics gap saying, ‘I’m so environmentally friendly because I come from trees; you can recycle me so many, many times and I will be back in the recycling stream over and over again’. And of course the paper manufacturers are now doing an excellent job of putting these KPIs on the radar, which works for them because plastic bashing is now the name of the game. But that is only one part of the story. We all know that if you look at the other criteria, such as CO2 emissions, then paper doesn’t look so great and glass is even worse. Plastic, on the other hand, is better by this metric.
Of course, there are cases where paper packaging is the right format – I am definitely not here to say that everything should be made from plastic. To say that would be good for my business, but I speak as a father, and as a citizen of this planet. There is space for aluminium, there is space for glass, there is space for paper – and there is space for plastic, too. But the plastic industry is now learning the hard way that we need to catch up with re-using our raw materials multiple times and not just once.
TS: How does all of this translate to Constantia’s investment strategies and R&D?
AB: I never anticipated the magnitude of the media discussion we’re having today. But actually, we already started three years ago in our R&D department by asking: what are the monomaterial solutions of tomorrow? At that time the market wasn’t very interested in that. At that time we focused maybe 50% on monomaterials, and that has risen to almost 100% in the last 12 months. We are, I would say, on the lucky side because our turnover is almost 50/50 aluminium and plastic film, and aluminium is actually a very easily recyclable material. When it is not layered with too many other barrier materials it is very easy to collect, very easy to detect, and through our suppliers of aluminium very easy to put back in the production stream. The focus here is on reducing the non-aluminium layers to ensure they stay below the thresholds for recycling. In this respect, having our own rolling mill is a helpful resource in developing new products.
On the plastics side, our focus is on polyethylene based monomaterials. Why PE? First, because it has an existing recycling stream with lots of applications; and secondly, sealability is high. PE will always work in our customers’ filling machines because it seals more easily than PP, for example. One challenge compared with PP films is that glossiness isn’t as good, more of a matte finish, but with printing technology developing in parallel perhaps we’ll reach a solution there as well.
In our labs in Germany and India we have developed a new mono PE barrier family called EcoLam, whose barrier properties come very close to multimaterial equivalents. There are three grades – EcoLam, EcoLamPlus and EcoLamHighPlus – which contain a functional barrier that combines ethylene vinyl alcohol (EVOH) and aluminium metallization, representing less than 2% of the total film weight.
This is not a solution we could retrofit to an existing machine, but rather a technology we had to build from scratch. So we invested in and recently opened a new proprietary line in India on a greenfield site. We’ve been going through tests and approvals on shelf life, logistics etc. with big brand owners in India and outside to get the product qualified. So far, I can tell you the feedback has been super positive.
Now we have this solution in India. Your next question will probably be, ‘Do you have any plans to duplicate it somewhere else?’ Yes, we do. But we really wanted to make sure that technically we have the process and performance perfectly in order before we move to Europe. So within the next three to six months, we will decide on doubling / tripling / quadrupling up that line.
TS: Design for recycling is something that a business like Constantia can address unilaterally to some degree, but you also need to ensure there's an infrastructure for collection, separation and economically viable demand for the PCR that comes out of it. Everyone agrees that collaboration across the industry is an important part of that – and I’m aware that Constantia is a member of CEFLEX. Could you comment on the progress and barriers you’re seeing in the wider effort to construct a circular economy in flexibles?
AB: I think there are two areas where we still need to fill the gaps. One is the recycling stream itself: we definitely need the public sector to help more. We've seen it in India, when Modi announced Clean India and announced recycling targets for the country, which moved the needle a lot.
We need that in other countries in the world, including Europe, and the discussion is heading in the right direction. But we now need decisions and clarity in order to really make this recycling stream an economically sustainable business. Otherwise it will not survive. And therefore, these platforms such as CEFLEX are super important in setting up the right framework.
The other area is FMCG. I believe all producers should challenge their specifications because products may be over-specified simply because it can be done. The question we should ask ourselves is whether we really need to pack, for instance, chocolate powder in a pouch which has a due date of 18–24 months. Of course, we can develop a barrier that protects chocolate power for that long but perhaps that product only stays there for six months before it’s used. How much did we over-engineer and over-specify because it was possible and it made our life easier? And how much does the consumer really need it? The more specification gets closer to reality, the easier it becomes to develop monomaterials, which by definition do not need to reach the exact same super-high properties as the multilayer products we developed in the past. As an industry, we need to compromise somewhere.
