Key events in 2021 included the recovery of volumes after the Covid pandemic and the continuing structural rise in demand for sustainable packaging. There was also a gradual increase in the cost of the main raw materials (paper and starch) throughout the year, and a rapid rise in energy costs from September on, which continued even stronger in the first half of 2022. Recent acquisitions were successfully integrated and made a larger than expected contribution towards the group's robust profits in 2021. This has again been a remarkable year, with many challenges.
Corrugated and solid board packaging
In the past year VPK has invested in the continuing integration of its sites and expansion of its presence in Europe. This included commissioning the brand-new corrugated converting site near Wrocław in Poland. This major investment, together with two other production sites in Poland, allows us to provide new corrugated cardboard packaging solutions to serve an increasing number of customers in this growing market.
The group’s acquisitions in the United Kingdom and France in 2020 were successfully integrated. The company’s footprint in the UK has been further enlarged with production sites from Encase Ltd. VPK’s geographical presence in France has also been strengthened, in the Lyon region with Viallon.
Tubes and cores
In 2021 Corex
, the group’s tubes and cores division, continued to develop its market leadership in the area of cylinder cardboard products. The acquisition of a well-known tube processor in Finland has also strengthened its network in the Scandinavian region, where Corex now has five processing sites.
In addition to an extensive range of industrial cores, Corex also continues to focus on the growth segment of consumer-oriented core packaging. Offering a huge number of options for printing, variable lengths and diameters, Corex Consumer Packaging
is continuing to extend its product portfolio as a core producer.
VPK Paper Normandy
In June 2021, VPK Group agreed on the acquisition of the existing 75ha industrial site in Alizay (France) with the aim of transforming it into a hub for sustainable development in the circular economy. This project will contribute towards the ecological, economic and industrial development of the Normandy and Paris regions.
The existing paper machine for copier paper will be converted into a production unit for recycled paper for corrugated cardboard, with an annual production capacity of 450,000 tonnes. Start-up is scheduled for the first quarter of 2023. The new site, in synergy with VPK’s two other paper factories in France, will produce more than 1,000,000 tonnes of recycled paper per year in France.
The addition of the Alizay project means that VPK Group will be recycling no less than 2 million tonnes of paper per year.
In addition, a corrugator will also be commissioned on the site and used for production of innovative “Z-fold” corrugated cardboard. This technology makes it possible to produce protective fit-to-size e-commerce packaging, eliminating over-packaging and lowering logistical costs.
The Alizay site also contributes towards meeting VPK’s goals in the area of sustainability. The site has a biomass co-generation unit and the water purification installation will generate carbon-free energy that will be used in the paper production process.
The site will also process 250,000 tonnes of wood per year from by-products of the wood industry and wood at the end of its life cycle, to produce wood pellets. These pellets will in turn be used to generate carbon-free steam at VPK’s corrugated cardboard factories in France, the Netherlands and Belgium.
Looking to the future
The packaging group’s strategy is marked by a strong long-term vision and continuing efforts to achieve sustainable growth, in both economic and ecological terms.
The continued rise in raw material and energy costs in the first quarter of 2022 is putting enormous pressure on margins. Despite the challenges we face today, the demand for sustainable and protective packaging continues to rise. The renewability and recyclability of paper are attractive environmental characteristics for packaging consumers. VPK Group therefore expects continuing growth in all the segments in which it is active.
As a company we are also continuing to work on our energy transition, reducing and decarbonizing our energy consumption by systematically transitioning to biomass, cogeneration and efficient use of residual heat on our sites.