Issue September / October 2006
Offering a customised service to its customers across Europe, A&R Carton is a leading supplier of folding cartons and packaging solutions
Formed in January 2000, A&R Carton is the result of a merger between Folding Carton Partners and Akerlund & Rausing Group’s carton packaging business. Strategically positioned to deliver competitively priced, innovative packaging within the folding carton industry, the company has established itself as a major player in the market, with its current growth rate well above the market average.
Working with some of the biggest FMCG companies, A&R Carton’s customer base includes Nestle, Unilever, Danone, Heineken, Carlsberg, Kraft and United Confectionaries. With 23 per cent of sales, the food industry is the company’s biggest market, while the beverage, frozen food, tobacco and confectionary industries all significantly add to its 300 million euro turnover.
While all of the folding carton designs are bespoke to customer demands, the total service package is also customised, with production technology, support and supply chain management tailored to meet specific requirements.
Alongside its folding carton business, A&R’s packaging solutions are in increasing demand, although the cartons remain the predominant focus. “Eighty per cent of our business is folding cartons, with the other 20 per cent delivering packaging solutions,” explains CEO, Per Lundeen.
An integral part of the company’s strategy is to bring a new approach to the development of packaging concepts, with this policy enabling A&R to introduce a number of patented techniques, which can be adapted to keep products fresh and moisture-free. Selecting the appropriate pack barrier, laminate, membrane or preapplied liner is a critical aspect of the design process, ensuring that the appropriate package is chosen for direct food contact and protection. Offering distinctive packaging, the solutions are highly versatile, allowing A&R to hold a variety of food products, ranging from coffee, rice and powder.
Amongst the company’s patented packaging solutions are, Expresso, a powder-tight packaging solution, Hermetet, a lined carton with a variety of opening devices, Cekacan, a multiple pack complete with either a paper or plastic lid, CC Tray, for convenience foods, and euroset, a multi-pack for both cans and bottles.
Introducing the award-winning Cekacan product, Per says: “Around since the early 1990s it has been developed over the years, and is growing strongly at the moment. The blank formed paperboard, combined with a plastic lid, is the result of co-operation with customers. We need this input from the client, as it is very much a tailor-made product.”
In 2005 the Cekacan product was presented with the prestigious Supreme Gold prize at the Starpack Awards. Presented by the UK Institute of Packaging, the prize is given to a product with particularly outstanding pack design. This particular Cekacan package was produced in conjunction with Cow & Gate Infant Milks, and had in 2005 won the Innovation Award at the second Annual Numico Booster Awards.
A&R has won a number of awards in recent years through its innovative designs, and September 2006 saw it receive the Carton of the Year award, for the second consecutive year, from Pro Carton/ECMA. Beating off 120 competitors, the winning entry, which combined elegant graphics, a simple opening mechanism and tampered structure, was produced in Germany for its French customer, Jacquot Confiseur.
The company’s focus on innovation is vital for it to compete in the SEK 80 billion Western European carton packaging market. “The current conditions indicate that the industry business is four per cent stronger than last year,” says Per.
“Normally in the folding carton business we have one to two per cent growth every two to three year, however the current good economic climate contributes the additional three per cent.”
“One of the challenges that we face is price pressure. Customers press the retailers, who pressure the big consumer goods companies, who are then pressing us. Therefore there are considerable demands for margin cuts in the system, while every company in the chain is also under pressure to innovate and create new products.”
Predominantly serving customers across Europe, Germany is A&R’s biggest market with 27 per cent of the group’s sales, while the Nordic countries account for 26 per cent, and France 15 per cent. Making up 12 per cent of sales, Russia is an expanding market, and the recent opening of a second plant here, has increased the group’s number of production units to 15 across nine European countries.
Addressing the work in Russia, Per comments: “We started there in 1995, as one of the pioneers in the Russian packaging business. Beginning by building up our sales network, we opened our first plant in 1997. In 2005 we began production at a second plant, in St Petersburg, to satisfy the local demand. While this is still in its start up phase, we have began production in parts of the plant, while we continue to build in others.”
Alongside this growth in production facilities, A&R is also expanding its global network of sales offices. “Following moves from some of our speciality customers, we have just opened offices in Kuala Lumpur and Shanghai,” says Per. “While this is currently not a major strategic move, we are looking to properly establish a distribution network before potentially starting local production.”
Outgrowing the market by five per cent, the company is in a strong position, and Per emphasises that there is further ambition to grow: “We are investing in our growth, and if opportunities arise we are also looking to acquire. We have an ambition to grow in Eastern Europe, focusing on the countries that we are yet to enter. We have a leading position in this area, as one of the first western groups to enter these markets, and we want to stay in front in the future.”
A&R Carton’s strong focus on innovation, combined with its award-winning quality, is key to extending its current strong growth rate, and help the company succeed in realising its vision of being the preferred packaging supplier of folding carton solutions to the European FMCG industry. Per concludes: “The trademarks of our group are innovation, quality and service. Customers appreciate that we are a very innovative company, and it is this that helps to differentiate us from the competition.”