Arjowiggins – A New Era of Paper
We are living in a digital age, but as Arjowiggins shows, paper is making a big comeback.
It has been a little over a year since we last spoke with Christophe Jordan, the Managing Director of Arjowiggins’ translucent papers division. Jordan, whose own family has a heritage in the paper industry stretching back to the late 18th century, is a passionate advocate for the role that paper can play even in an increasingly digital society.
That said, he is the first to admit the sector has been facing challenges in recent years, but at the same time he points to a renaissance that is overtaking the paper industry.
“Paper has been suffering for the last two decades, primarily from digitalisation, but now it’s becoming more and more popular and required by consumers as a replacement for plastic,” Jordan tells us. “I feel like we are a key actor in a new era.”
For Arjowiggins, as it has been for many businesses, 2021 was a dramatic year.
“I’d call 2021 a mixed bag,” Jordan says diplomatically. “We had already suffered from Covid’s third, fourth and fifth waves, which led to a reduction in business, as well as massive cost inflation overall in industry and people’s personal lives. Thankfully we have seen a strong recovery from August and September onwards.”
But while these are very real challenges, Jordan is also excited about how the paper industry is progressing.
“At the same time, we’re living in exciting times for the paper industry overall,” he insists. “I’d call it a new era of paper.”
The Whole Package
When we last spoke with Jordan, Arjowiggins was moving into the food packaging sector, demonstrating how a lot of disposable plastic could be replaced with more sustainable and recyclable paper products.
At the time it was an exciting new proof of concept, but today Sylvicta is a legitimate commercial product serving a rapidly growing market.
“2021 saw the rise of commercial applications. We are past the proof-of-concept stage. Beyond the food sector we have found paper replacing plastic in electronic packaging, in screens and lens protection, laptop wrapping,” Jordan says. “It is far away from the food sector but it’s single-use plastic that’s being replaced.”
Talking with Jordan even he seems surprised by just how much Arjowiggins approach has been embraced by its customers.
“It is fair to say it has been a very fast development for us since the launch of Sylvicta. We started almost two years ago in October 2020, have already sold hundreds of tons in 2021 and are on track to move into the thousands of tons in 2022,” Jordan says. “I am very conscious we are a small player in the industry but at our scale, it is a massive development. We’ve new applications coming on the market every month in Europe, the US, and Asia. It is buzzing. We have had launches in the food sector, chocolate wrappers, chocolate box overlays and many other kinds of food tray overlays.”
At the moment it seems a day will not go by without a new potential market opening up.
“We’ve started offering pet food standard pouches, that can also be used for coffee beans as well as the bags, sachets, and standard pouches that are becoming popular as a waste food reduction overall,” Jordan tells us. “We can replace the plastic standard pouch with paper. We are working on large opportunities around salad bags. We have developed a paper application to replace plastic polybags used for garment transportation. Finally, cosmetics is becoming very, very active. We have provided solid soap wrapping and we are moving into creams and gels, so that sector is extremely busy for us.”
Capacity in Waiting
A side-effect of the industry’s steady decline for the last two decades is that Arjowiggins has capacity ready and waiting to meet this new surge in demand.
“That means we have the capacity to spare for new applications, but we will soon be looking to add new capacity. That is what excites me if I am honest. After so many declining years we are working at adding new capacities in our European and Chinese mills, to meet increasing demand,” Jordan says. “We can cope with our existing footprint, but we’ve been recruiting quite heavily in commercial and technical support.”
Even in the face of a depressed market over the last year, Arjowiggins has managed to launch an entirely new product line that it has had in the works for a while – heat transfer papers.
“If you want an image on a t-shirt or a sports shirt with your favourite player’s name on it, a plastic transfer sheet has most likely been used to transfer it onto the shirt. We have launched heat transfer paper to replace the plastic element there. We are continuing along our path, providing an eco-friendly alternative to plastic anywhere we can.”
Of course, that does not mean it is entirely plain sailing. As Jordan readily acknowledges, “We have the luxury of many challenges!”
The first is, unsurprisingly, the successive waves of the Covid pandemic, which have gone on much longer than predicted by any expert.
“This has continued to affect our leisure and hospitality segments, giving us a reduction of business in some areas,” Jordan says. “The other big challenge is the cost of energy and raw materials. We are seeing double- and triple-digit increases. Paper is an energy-intensive industry, and we have also seen rising pulp prices.”
This is an even great challenge given that, despite being founded in 1698, the company’s time in administration means that this iteration of the business only dates back to October 2019. However, Jordan also believes that going through administration has equipped the company well for even greater challenges.
“We’ve learned the phrase ‘Resilience and Flexibility’. With Covid that has been even more important,” explains Jordan. “We rely on our people and their resilience and flexibility, alongside the loyalty of our customers. That has been key to overcoming those challenges.”
Unfortunately, some price increases have been inevitable. With materials costs increasing by double or even triple digits some of that has to be passed on to customers.
“We have been able to rely on a solid base of loyal customers and they have been very understanding and supportive. They acknowledge the whole world has changed and we are not the only ones with price increases, but also, they know us,” Jordan says. “We’re a new company but we have heritage, and this heritage helps us a lot when it comes to tough times because it brings the loyalty of customers and suppliers.”
But while the challenges Arjowiggins has faced are very real, so too are the opportunities.
“We are working hard on the capacity increase. That is exciting. We do not want to only propose translucent materials, we are also working on opaque barrier papers,” Jordan says. “We have got The Paper Book, a book that collects all the paper we produce. We are working on the third edition right now. Each edition lasts for up to four years. We are working on innovations around sustainability, with recycled fibres and alternative fibres. But we are also looking at the concept of upcycling, taking the waste of a certain industry and turning it into new finished products and materials.”
While everyone else is looking to digitalisation, paper might just be the most exciting place to be.
“We are entering a new era of paper, with new uses and applications. Paper has been seen as an old fashioned and dying industry, but I am so glad to see it entering this new phase,” Jordan tells us. “Paper is in my blood.”