Integration Is Key at Multifilm Packaging

The common trait of successful companies in a competitive market is doing whatever they do really well. For Multifilm Packaging, that requires a laser-like focus on a particular segment of food packaging.

"We are not a general converter or a one-stop shop," affirms CEO Olle Mannertorp. "We specialize in the confectionary market and piece-wrap materials and produce barrier structures and materials for high-speed packaging lines. Integration is our key, including in-house extrusion and metallization."

This focus and specialization is the foundation for the Elgin, Ill. company's success in this highly competitive market. "All growing markets are demanding," says Mannertorp. "Shrinking markets may be less competitive, but who wants to grow in a shrinking market? Winners are those who do something very well and stay focused. To be everything for everyone is typically a losing proposition."

Getting started

Starting in 1982, Multifilm operated for most of its first decade as an import sales office for Austria-based Constantia Group. Marcus Magnusson, director of sales and marketing, says the company moved into manufacturing around 1990 when it partnered with a local company to produce cast polypropylene (CPP) as a replacement material for the cellophane used for twist-wrapping hard candies. Four years later it acquired the partner's assets to become a full-fledged manufacturer, and the current management team bought the business from Constantia Group in 2008.

Today, Multifilm is a wide-web flexographic printer, with 60 employees and two Windmoeller & Hoelscher presses. "Flexo is the dominant method for printing in North America, and I don't see this changing in the foreseeable future," notes Magnusson. But he admits that digital is on the horizon.

"We've met several times with representatives of digital press companies to learn how the technology is developing," he reports. "While ideal for certain applications, cost is going to be the determining factor and digital has a long way to go to compete with flexo or roto on large volume jobs."

But small volume jobs are a different matter, and Mannertorp acknowledges the role digital printing will have in this segment. "For short runs, digital will become the leading process because it offers superior print quality with zero tooling costs."

Competing in flexible

Multifilm Packaging is a strong competitor in food, the largest market segment for flexible packaging. Although its main focus is confectionary products, it also produces packaging for dry food categories, such as snacks, powders, nutrition and coffee.

Multifilm supports customers' rigorous quality standards with a state-of-the-art quality assurance lab and is ISO 9001 2008 and American Institute of Baking (AIB) certified. Seeking an extra edge, the company is also pursuing FSSC 22000 certification, one of the Global Food Safety Initiative (GFSI)-approved food safety programs. With implementation scheduled for this summer, Multifilm expects to be one of the first flexible packaging manufacturers in the United States to receive this certification.

Magnusson sees good reason for making such significant process investments. "I believe the food industry will continue to provide growth for flexible packaging as more emphasis is being put on food safety, portion control and sustainability initiatives to use less packaging," he notes. "Stand-up pouches that replace rigid packaging are a great example of this. While we don't do any in-house pouching, we do supply roll stock to customers or partner with pouching companies to create bags."

A materials legacy

Stemming from its early work in candy markets, Multifilm's emphasis on barrier materials took a significant step in 2002 when it added lamination capabilities. "We were mostly doing single web films for twist wrap and wanted to diversify our product portfolio," recounts company president Chris Rogers. "Having both in-house cast extrusion and metallizing capabilities has allowed us to develop proprietary metallized sealant webs for high barrier laminations. It was a good way to avoid putting all our eggs in one basket and be too reliant on a narrow segment of the market."

Today, Multifilm can provide customers with a variety of film substrates, including PET, OPP, PE, and CPP, as well as several proprietary films that are primarily PP and PE based. "Everything we do is custom, but we typically stock several grades of standard films for quick turnaround," says Magnusson.

Trends

Mannertorp singles out two trends he believes hold significant potential: shorter print runs and energy-cured inks.

He sees shorter print runs being driven by just-in-time inventory management, and by marketing activities in which the packaging is used for more personalized or customized messaging. "The only way forward for our industry is to invest in faster changeover systems and methods."

Energy-cured inks "will be the way of the future," he predicts. "UV inks have been around for many years but have not captured significant market share on printed films, due to odor and temperature issues. E-beam curable inks still have a long way to go but early indicators are very promising. Once fully commercialized these inks have the potential to take over the market."

Sustainability

Multifilm Packaging has taken a leadership position when it comes to sustainability. It was recently recognized with a 2013 Illinois Governor's Sustainability Award, one of just 27 awards recognizing Illinois companies for significant achievements in protecting the environment.

Mannertorp understands the importance of sustainability for Multifilm. "Sustainability is and will be a driver for the packaging industry going forward," he says. "You can look at sustainability from three angles; material input, energy input and waste products, and waste can be anything from CO2 and VOCs to packaging and food waste."

Multifilm is active in all these areas. Significant sustainability efforts began in 2008 with a Geothermal Process Cooling and HVAC System. This renewable energy system was originally intended to replace two old chillers, but the company saw additional opportunities and added more equipment to include heating and air conditioning of the plant, says Magnusson. The geo system has reduced energy consumption by more than 30 percent, encouraging the company to look at other areas for improvement.

Waste was a good place to start. Magnusson says they did a "dumpster dive" that showed how much plastic film was being discarded that could be recycled or incinerated. The result was implementation of carefully sorted waste streams for plastic, paper, metal, batteries, wood and other materials. The addition of a re-pelletizer in 2012 now turns selected scrap film into resin pellets that can be extruded into finished product. In 2013, for instance, the company re-pelletized more than 55,000 pounds of material and intends to increase that volume significantly this year. "We consider ourselves a near-zero-waste-to-landfill operation," Magnusson says, "with the last couple of percentage points just not being feasible. We have always been advocates of source reduction through down-gauging due to our cast extrusion capabilities, but it was not a major effort like it is now."

Multifilm has also investigated use of bio-based materials using a small extruder to produce trial quantities. The company has not seen much success with these efforts and has found most claims of sustainability to be exaggerated. "Sustainability can be a very emotional issue and opinions on what is sustainable and environmentally friendly vary greatly," muses Magnusson. "For example, is it sustainable to make plastics out of corn when millions of people across the world are starving? Is a compostable film sustainable if it requires several times more energy to produce than its non-compostable counterpart? We decided to bypass these arguments and focus on using fewer resources in the first place."

When it comes to using less material, flexible packaging has distinct advantages compared to competitive packaging such as rigid containers. This advantage has played out often in recent years and is a driver behind the growth in pouches. But Magnusson knows that flexible packaging has an image problem. Although it accounts for just a small portion of the municipal waste stream,flexible packaging is mostly viewed as garbage and litter. Rigid plastics have more of a 'recyclable' image."

Magnusson sees this changing, with flexible packaging becoming part of the co-mingled recycling stream in a few years. "It's really a question of educating consumers. Organizations such as the Flexible Packaging Association (FPA) are doing a nice job, but we still have a long way to go."

Moving forward

One of the challenges facing many flexible packaging converters today is one that puts significant pressure on margins. "Flexible packaging converters are small or even very small companies in the eyes of our customers and suppliers," explains Mannertorp. "On the supplier side we are all exposed to monthly price fluctuations on plastic resins that are produced by the oil giants. These price changes are often implemented retroactively, yet the large food companies typically only accept adjustments on a quarterly basis. The packaging supplier is caught in the middle. Low margins are a risk that eventually hampers innovation and creativity."

Still, that's just a fact of business life. Always looking forward, Multifilm has invested more than $15 million in new equipment and infrastructure since the 2008 buyout, a trend continuing in 2014.

New investments include a Deacro high-speed turret slitter that is arriving in May. A Bobst metallizer will be installed in early summer to help address a production bottleneck. "The metallizer will run faster, wider and is capable of quicker changeovers, resulting in a productivity gain of about 50 percent, and it will be capable of doing some unique applications," says Rogers.

"I think the future is bright because this segment of the industry is growing faster than GDP, whereas most other segments are growing slower or even shrinking," says Mannertorp. "Flexible packaging is by far the most innovative player in this huge arena called the packaging industry." pP