Oliver Grüters, president, EFIBCA

The president of the European Flexible Intermediate Bulk Container Association talks about how the raw materials shortage has affected his members

In April EFIBCA put out a press release on the raw materials shortage and the spate of declarations of force majeure. Have there been any developments since April?  

As a bit of background, we have been experiencing shortages for certain types of Polypropylene (PP) and Polyethylene (PE), the main raw materials for FIBCs. In fact, more than 40 force majeure situations for polymers and upstream chemicals had been declared in a period of only four months. We observed suppliers cancelling contracts, causing shortages and driving raw material prices to record highs. As a consequence, some affected companies even had to slow down their production.

The force majeure situation in Europe is obviously very unsatisfying and has been a challenge for European production within the plastic industry. With support of the German Association for Plastics Packaging and Films (IK), this situation has been published in different media and the consequences like supply shortage, price increase, lead time, etc. came to the attention of the users. Within the last month the situation has improved regarding the availability of materials.

It is indeed hard to understand the high number of recent force majeure declarations

How do you think the situation can be resolved?

Measures are underway. The plastic converting industry in Europe has joined forces and set up the Alliance for Polymers for Europe under the umbrella of European Plastics Convertors (EuPC). This Alliance is aiming at removing the import duties on plastics that cannot be supplied reliably by production within the inner-European market.

Also, the dialogue within the supply chain needs to be intensified. Given that a force majeure situation is a very rare exemption caused e.g. by act of nature, terrorism or other situations that are out of the control of the organisation, it is indeed hard to understand the high number of recent force majeure declarations.

Apart from the raw materials shortage, what are the main issues that EFIBCA members are facing at the moment?

Besides the difficult currency situation with the weak Euro, our members have a strong interest in standards and regulation.

One everlasting challenge for responsible FIBC producers and traders remains the competition from cheap bags that often do not meet quality standards or lack ethical production standards. This phenomenon has to do with the constant shift of production to countries with cheaper labour costs. Over the past 20 years, we have been observing such a shift, e.g. from Turkey to countries like India and Bangladesh, which are now within the top three importing countries of FIBC into the European market. But new facilities often have to undergo a learning curve before being able to satisfy international quality and safety requirements as well as labour standards. While some companies prove that they have done their homework and are delivering excellent products while being responsible employers, others still lag behind and compete through market-damaging prices.

This is one of the reasons why EFIBCA has launched voluntary initiatives for its member companies like the EFIBCA Code of Conduct and the EFIBCA-Q Quality Pledge (more information is available at www.efibca.com). These projects help our members to reach international standards regarding quality, regulations and ethics. We encourage FIBC user industries to build these into their supplier audits and hope that the European market values responsible entrepreneurs.

What are the challenges involved in reconditioning FIBCs? Is there a reason why it is not very common in Europe?

The reconditioning of FIBCs is requested from the market mainly in those segments where this gives an economic advantage. In some major segments like chemicals or food, the collection and cleaning of FIBCs remains difficult and risky. However, the recycling of FIBCs is very common since FIBCs are made from PP and PE which are easy to recycle locally in most European countries. This is an advantage of FIBCs compared to many other types of industrial packaging.

We expect that FIBCs will remain the most important packaging for bulk materials in the industry

How do you think the FIBC market will look in five years’ time?

We expect an ongoing growth of the FIBC market in Europe for the coming years. Industry investment in FIBC equipment remains high. No other industrial packaging can be adapted to the customer and the product that goes in it like an FIBC, so we do expect that FIBCs will remain the most important packaging for bulk materials in the industry. That means this growth will probably be at the expense of other bulk packaging. A big advantage of FIBCs is their flexible material, which makes handling and storage of filled and empty bags very convenient. Furthermore, the expectations of the market regarding product quality and social aspects will continue to gain in importance.

How did you end up working in FIBCs?

I started in a packaging company selling different packaging materials to industrial customers. From the beginning the FIBC appeared to be packaging with high potential since it is tailor-made to customer needs. Working in FIBCs is very international and users are from various industries – all this makes the FIBC business varied and interesting.

Oliver Gruters, EFIBCA

With 17 years’ experience in the FIBC business, Oliver has been president of EFIBCA since 2011. Having served for the maximum 2 consecutive 2-year terms this year, this is his closing interview as President of EFIBCA. His successor will be elected at the EFIBCA Annual General Meeting in Barcelona this fall. Oliver is business area manager of Boxon Bulk global and general manager of Boxon GmbH, Germany. Since 2006 he has been chairman of the FIBC group and board member at the German Association for Plastics Packaging and Films (IK).

EFIBCA has an Open Meeting coming up in September in Barcelona. What are the main reasons why those involved in the FIBC industry should be attending? 

 

This year EFIBCA will host its Fifth Open Meeting on 30th September in Barcelona, the day after we have the Annual General Meeting for EFIBCA Members at the same place.

The EFIBCA Open meeting concept is to create a forum with a positive atmosphere to draw together all kinds of companies from across the business (users, distributers, producers, equipment and raw material suppliers, test institutes, etc.). An open meeting always aims at informing participants on the latest developments affecting the industry. This year the speeches will cover a wide range of topics including the FIBC market, sustainability, quality assurance and safety. In addition to the content of the speeches, the possibility of meeting, information exchange and networking are good reasons to participate. This year for the first time we are offering table top exhibits for ancillary services. In addition, EFIBCA non-members can join in a social event and dinner usually reserved for EFIBCA Members after the general meeting, another debut. We expect both to support the goals to promote exchange of information and ideas while having a good time.

 

 

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