Tetra Pak Invests Heavily in the African Market...
Tetra Pak is looking forward to a surge in market growth in the coming years as southern Africa’s appetite for dairy and juice products held in paper based packaging shows no abating.
The company, which was founded in Sweden in 1951, is continuing to plough significant investment into strengthening operations in its Pinetown packaging material factory near Durban. It is also investing heavily in training and employee development.
John Strömblad, Managing Director of Tetra Pak South Africa, said: “We are investing a lot on staff training to ensure we are meeting increasing demand and heightened customer expectations.”
He explains that consumers are constantly looking for new, more convenient products, which puts pressure on manufacturers to continuously innovate their offerings. “There is a lot more diversity in food packaging and products compared with five years ago,” he said. Due to this increased demand, the company is always looking at ways to develop new packaging solutions and update its production facilities.
“We already have a strong technical service area, but we can be even better,” said Strömblad. “We are expanding our capabilities in that respect by offering value added services such as training external operators by illustrating how to reach higher levels of efficiency.”
Aseptic packaging, which is the practice of filling a sterile food or liquid into a paper based package, started in 1959 at Tetra Pak. When a sterile product such as UHT milk goes into the packaging, the perishable goods can then be kept for much longer periods without the need for refrigeration.
This led to generous savings in distribution and the overall handling of products, such as a reduction in energy consumption. Then in 1991 Tetra Pak acquired a diverse Swedish engineering company called Alfa-Laval AB. It produced industry leading industrial and agricultural equipment and milk separators. At the time of the takeover it was the largest deal Sweden had ever seen.
Strömblad said: “Today, if you set up a dairy you can buy or lease everything you need from Tetra Pak. Not only the filling and packaging equipment, but also everything you need for processing such as pasteurisers, sterilisers, homogenisers, automation equipment and so on.
“Obviously it’s an investment for that company, but then we also provide technical service and maintenance support to make sure everything is performing properly. The technical service training centre in Johannesburg is where we train our employees from the whole of sub-Saharan Africa.
“Most importantly we train our customer’s operators too; we run very practical training courses in our Johannesburg facility. The vast majority of business comes from within South Africa but we’re seeing very interesting growth potential in other markets such as Zimbabwe, Zambia, Angola and Mozambique too.”
The global Tetra Pak group has seen a tremendous growth over the past 30 years, and the same can be said for South Africa since operations started there in the early 1990’s. Today it employs around 250 people in its country headquarters in Johannesburg, engineering centre in Cape Town and packaging material factory near Durban.
The encouraging signs of growth throughout the region Strömblad manages has seen many of its customers forge successful international brands. The South Africa entity oversees a total of 10 southern African countries including Botswana, Malawi, Mauritius, Mozambique, Namibia, South Africa, Zambia and Zimbabwe and its main export market is west Africa. However, there are 38 Tetra Pak factories worldwide so there is an allocation of products on a global scale too.
Globally, 75 percent of Tetra Pak packaging contains milk and by-and-large South Africa follows this trend. But recently, as well as the leading juice firms, there has been a more diverse range of produce utilising the packaging such as tomato centric products, wine and even canned food like baked beans.
Strömblad said: “We provide various different packaging materials which we produce in the factories. That material is then shipped to our customer’s site, sold to them, then the customer uses that material to pack their product. That’s the overall business model.
“We have recognised that seed and oatmeal drinks, as well as almond and soya milk is probably one of the biggest growing segments globally and we expect similar growth movements in the future. If we look at market data, we are looking at around 10 percent growth in carton packaged milk and a decline of chilled milk of about four or five percent going forward in the coming years.”
Sustainability and CSR
The three parts of Tetra Pak’s products are the paper-based material, polyethylene and aluminium foil. Carton material is sourced mainly from Scandinavian manufacturers because in order to form these packages longer fibre is needed, and that comes from slowly growing forests typically found in Scandinavia and North America.
“Environmental thinking is in our genes, it started right from the beginning in the 50’s. The most obvious way to reduce impact to the environment is to reduce the amount of packaging material. If you take a typical 1 kilogram carton it weighs 28 grams but if you have a glass bottle it is more like 300g.
“A straightforward reason for our fantastic sustainable performance is down to the fact that we are basing our manufacturing on a renewable resource of paper. It comes from responsibly managed forests which means you plant more trees than you cut down. Most of our packaging material has an FSC marking on them and we are a driving member of the Paper Recycling Association of South Africa (PRASA).”
“We are working with the Polyethylene technology providers who can give us green PE produced mainly from sugar cane. We are also striving for a barrier material in place of aluminium. You will see an entirely green product from us in the not too distant future.”
Tetra Pak has worked hard to reduce environmental impact and achieved tangible results; the group’s carbon footprint was reduced by 13 percent from 2005 to 2010 despite substantial company-wide growth.
It also has a three year old partnership with the paper mill Gayatri, going from zero recycling due to a lack of facilities to 16 percent overall, which is continuously rising, enhancing Tetra Pak’s image as a sustainable, ethical company in Southern Africa.
Tetra Pak has become a household name in the packaging and food storage sector. Its commitment to sustainability, product development and continued expansion means it remains a long way in front of the competition. With on-going investment into employee development and geographical expansion, it’s likely to retain its world-leading title for many more years to come.