There is neither doubt nor dispute that the last financial year tested the grit and resourcefulness of the packaging industry.
Tetra Pak achieved a 1.7% in sales nonetheless.
Tetra Pak’s ‘challenging year’, the company stated, was punctuated by a further softening of global GDP and rising competition within the liquid food packaging sector. Despite this, the company achieved net sales of €10.9 billion (AU$15.4bn), up 1.7% from 2013, with strong growth in Capital Equipment and Technical Sales helping to offset a disappointing year for packaging material.
Tetra Pak president and chief executive officer, Dennis Jönsson, commented. “Against the backdrop of a tough year, with slower packaging material growth than originally expected, we saw clear evidence that our business strategy is working. Capital Equipment sales reached almost €2 billion and Technical Sales topped €1 billion for the first time in the company’s history. Our processing business closed the year with a record high order backlog, up 20% compared with the end of 2013. And we saw a significant increase in sales of our advanced packing formats: 7.1 billion more packs reached the shelves in 2014 than in 2013, offering customers optimal functionality and differentiation.”
Packaging Solutions: little growth but family pack segment soars
The company’s Packaging Solutions business reported net sales of €9.4 billion ($AU13.3bn), 0.9% higher than in 2013. Packaging material volumes reached 180 billion packs, slightly ahead of the 178 billion packs sold in 2013. Capital Equipment’s revenues rose 6.4%year on year and Technical Sales climbed nearly 11%. Almost 30% of Technical Sales now comes from service contracts, demonstrating that more customers recognise the value of proactive maintenance, stable performance and predictable costs.
Rising demand for products within the company’s advanced format came mainly from within the family pack segment. Tetra Annual sales of Brik Aseptic Slim and Tetra Brik Aseptic Edge, each with new generation openings, climbed 42% and 55% respectively. In portion packs, Tetra Prisma Aseptic achieved year-on-year growth of more than 38%, or 2.1 billion packages.
Processing Solutions: strong growth especially in milk powder and cheese processing
In contrast to Packaging Solutions, Processing Solutions had another year of good growth, with particularly strong demand in the milk powder and cheese processing sectors. Net sales increased by almost 7% year-on-year, driven by double digit improvements in South Asia, East Asia & Oceania and in Greater China, and buoyed by Tetra Pak’s first quarter acquisition of Switzerland-based Miteco, the world leader in production solutions for carbonated soft drinks. The company also gained the benefit of its 2013 acquisition of Danish filtration technology specialist, DSS Silkesborg, whose expertise and reputation played a key role in securing the largest Processing order in Tetra Pak’s history, a dairy and whey powder plant in Germany.
Sustainability
Tetra Pak’s leadership position in sustainable packages came up against an aggressive competitor in December 2014, when Elopak announced the imminent release of Pure-Pak, “the greenest Pure-Pak carton ever.” Tetra Rex Bio-based, the world’s first carton package made entirely from plant-based materials, went into test market in January and was released globally in the first week of April.
Read the company's outline of Tetra Pak’s sustainability results for 2014 here.
“2015 will undoubtedly be another demanding year, but we are confident that our strategic direction will continue to strengthen our market position and bring us further success in both Packaging and Processing. Our focus, as always, will be on creating customer value, through continuous innovation and by helping to ensure customers are well-placed to capitalise on the many opportunities we see on their horizons,” Jönsson concluded.
