Recently we were able to speak to Paolo Lobba, Giflor's head of R&D, to get his impressions on the current trend for packaging firms to expand into previously untapped markets. Giflor is one of Europe's leading closure providers, and Paolo was able to give us some details on how his company is meeting the challenges of expansion successfully.
Paolo, what precisely do you do at Giflor?
A lot of things. Officially I head up the R&D and technical departments, but I also have to interface with other teams to make sure we're working in the same direction. It's important to be cohesive. To that end, I manage all the activities and process related to the development team, mostly the technical aspects of the job. I also oversee a lot of evaluations related to the industrialization of specific projects.
What are you currently working on?
At the moment I am heading up a couple of projects for the company. The most important is an upgrade to increase our production capacity for standard tools. We need to update our technology in order to accommodate larger moulds. That way we'll be able to improve our overall efficiency and produce models more quickly, with larger runs.
Which models are you referring to?
All of them, really, but especially our Eco Low Profile caps, they're our current most popular item. Companies appreciate the design of the caps and how well they're crafted, but they also like the fact that we can back up our environmental claims with regard to the items. There's a lot of greenwashing still going on in the packaging space where companies claim their products are "environmentally friendly" or "better for sustainability" or whatever, and in a lot of cases that's simply not true. Our Eco Low Profile caps clearly demonstrate value with regard to lowering CO2 emissions and other sustainability criteria. They're genuinely "green". They're smaller, use less raw materials, they weigh less, you can ship more of them per crate - the list goes on.
We're also actively trying to increase our cavitation capacity and use new mould technologies as well as different steel alloys to make moulds, all with the goal of improving efficiency and increasing productivity.
Do you have plans to release new products in that line?
Yes, we're working on a bi-colour, double wall flip top cap which is round and can sit on a 50mm neck. Before we launch a new product, we really take our time to delve into the market. We limit risk by doing a lot research prior to just throwing anything out there. We analyze market trends then do some brainstorming and come up with a portfolio of ideas we take to partners, distributors, and clients to see what they think. Internally, we take the concept to our sales and marketing people to get their opinions. If they all think the project can be a winner, we move forward with development. Every project requires a fairly substantial investment, not only in terms of money but also with regard to time. We need to ensure new items are the right ones, so we spend a of time making sure we're going in the right direction before we commit to tooling.
After that exhaustive process, we came to the conclusion that a round, 50mm bi-colour, double wall flip top cap would gain a lot of market acceptance. We created prototypes and were very pleased with the results, so we're launching it in October. To give you an idea of how long it took, we started on it just after Cosmoprof last year, which was in the middle of March, 2016. As you can see, development projects use up a lot of time and as I said, industrial tools are very expensive. We think it's better to spend time on careful and deliberate development rather than launching an unsuccessful product. There's always risk but we try to control it as much as possible.
That process is lengthy, is it part of larger expansion plans?
At the moment, we're a small verging on medium sized company. If you look at other players in the space like RPC or Aptar, we're quite small compared to them. We are, however, quite well known and respected in Europe. We've blossomed a lot since the early days, and we still have a lot of room to grow. We began doing one show which was Cosmoprof in Bologna - now we do that as well as Interpack, Pack Expo in the USA, Andina Pack in Colombia, Cosmetic Business, PCD & ADF, Packaging Innovations in Europe, Beauty Eurasia, Beautyworld Middle East, Iran Beauty and Clean, and others. The more we're out there, the more we're recognized. We generally get a lot of positive feedback about our products. Our expansion is a step by step process and right now we're experimenting a lot with moving into emerging markets, including places in Asia, the Middle East, and South America.
Does being smaller provide you with a certain agility?
To a degree, yes. We're not a big structured company but we have a massive distribution network. Internally, we all work together, inter-departmentally. If we need to increase our production for a short period of time, we can add resources from manufacturing partnerships we have, which means we have few fixed costs. The same concept relates to expansion. We can set up partnerships with vetted, trusted firms and work with them directly while we expand.
How is corporate expansion working out for Giflor?
Very well, actually. A lot of our products are picking up international recognition. In fact, we recently won two Worldstar awards for a couple of our Eco Low Profile items. We won in two categories at Interpack, for the Eco Low Profile bottle closure and the Eco Low Profile tube closure. We also took a Starpack award for those items in the UK. The closures were really appreciated by panels for the processes we use to create them, our logistic capabilities, the fact that they're space saving, and other considerations.
The net result is that we're becoming quite popular in North America through distribution partners. That's great for us - in the USA, what they consider small products are immense, just huge. The European market usually nets us smaller runs, but we get more of them. In South America, we've detected synergy with a number of firms, particularly in Ecuador and Colombia.
You mentioned run sizes, how much does Giflor produce daily?
At our own locations, we run a total of 35 machines and four of them offer bi-injection moulding. They all typically work at capacity and we don't keep stock. We usually have them running 5 days a week at 24-hour production in shifts. We sometimes keep the machines running weekends if we need it, particularly for large runs. As I said earlier, if we need more manufacturing capacity, we have trusted partners nearby that help us to meet demand. For the Eco Low Profile line, demand is getting so high that we're working with local manufacturers worldwide to offer global production. We're really looking to do local production for large scale projects.
I should point out that our speed those sorts of projects is something that sets us apart from a lot of firms in our space. When we start a project, there's always some back and forth with the client and then we begin production. Often, it's a production run of about four weeks plus delivery, which can another four weeks. We like to offer a fair eight-week lead time, and most other companies in our space offer ten to twelve weeks. We're extremely quick, that's one of our greatest advantages.
What options do you offer partners in terms of service?
It depends on the project, but we have several options for working with partners. We can produce the mould and ship it or we can license a partner to make the mould according to our specs. We prefer to make the moulds ourselves, that way we can keep on top of the level of quality and ensure everything works as it should. On the other hand, our Eco Low Profile line is designed to be shipping-friendly, the iotems are really light. We did a project for an Asian company recently and with all things considered, they figured out it was actually cheaper for us to produce the closures and ship them to their locations. If you order larger parts with us that are to be assembled later, it's better to get the mould delivered for local production.
The development phase is always under our control. We send trained, highly skilled technicians to oversee development and we keep assembly lines under our direct control using Giflor specifications and techniques. We're able to cut down lead times that way and increase general efficiency.
We've invested a lot in intellectual property protection. Sure, it's about defending our work and making sure we derive economic benefit from what we produce, but we think it's more about giving customers a clear benefit. We don't just sell plastic parts, we protect our work and offer unique and useful components that do not copy other items. By defending our intellectual property, we can clearly demonstrate that our products excel, that they get the job done. If our name is on it the product is excellent, it's that simple.
On our last project for example, we had to develop a totally new tap for a bag in a box product. It was a complex system with a lot of parts and it was quite challenging. We sent our people out there to take care of it and we realized there was an opportunity there for long-term cooperation. It led to us creating a spin off company called iTap, which has been around since 2015.
Is that a different concept from the Giflor closure lines?
Correct, that business unit offers complex systems, equipment, moulds and expertise, and all of that came from a simple request for us to integrate our technology with flexible packaging. We saw a large opportunity, we invested in it, and it's working out very well.