Packaging manufacturer Schumacher Packaging
steers a path through the crisis
2020 sees turnover grow by 4.1 % to EUR 675 million
Ebersdorf bei Coburg, Germany, 19. April 2021 +++
The Schumacher Packaging Group, one of the largest family-run manufacturers of corrugated and solid board packaging solutions (www.schumacher-packaging.com), has successfully steered a path through the economic downturn caused by the coronavirus pandemic over the past year. Turnover grew by 4.1% to EUR 675 million in 2020, meaning that in the second half of 2020, the Group succeeded in making up for a decline in sales of around 15% in the first half of the year. Schumacher Packaging did, however, miss its original target turnover of EUR 700 million. Nevertheless, the packaging specialist is pleased to have safeguarded all jobs and, in the German plants at least, managed without short-time working. This year, an investment programme of EUR 80 million is set to contribute to maintaining and increasing the competitiveness of the plants.
Economic consequences of the first wave of the pandemic
Björn Schumacher, CEO of the Schumacher Packaging Group, attributes the slump in sales in the first phase of the pandemic to the lockdown, which directly affected many sectors: "The shock caused by the coronavirus was particularly devastating for our customers from sectors in which business could not be quickly moved online. This included the automotive industry and mechanical engineering, as well as furniture manufacturers and fashion businesses. Given our high fixed costs, this slump was serious for us. While demand for packaging from e-commerce grew due to the pandemic, overall we felt the impact of the crisis deeply in the first half of 2020. It was only after companies got a better handle on switching to digital processes and with the gradual easing of lockdown measures in May and June that demand started to rise again."
Short-term need for pharmaceutical and medical technology
Thanks to good hygiene management in production, Schumacher Packaging successfully managed to prevent any outbreaks of coronavirus and avoid plant closures. In addition, the packaging specialist supplied transport packaging for ventilators and medicines quickly and straightforwardly in spring 2020 in order to meet rapidly rising needs in key sectors, such as medical technology and pharmaceuticals. In March and April 2020, for example, Schumacher Packaging together with its partner companies Horna and Wetropa, also medium-sized companies, supplied special packaging that was desperately needed immediately for transporting lung diagnostic systems and acute dialysis machines. "We were also able to help out at short notice in northern Italy, which was hit hardest in the spring of 2020," says Björn Schumacher. "At times, twenty of our lorries were driving over the Alps each day to deliver packaging material and secure logistics supply chains in the region."
No organic growth in 2020
"Despite the fact that in some sectors – particularly in e-commerce – demand for packaging rose during the crisis, this was not enough to fully compensate for the slump in the first half of the year," explains Björn Schumacher. "This means that it is also unlikely that we will achieve our target turnover of 750 million this year, which was a goal we had set ourselves before the pandemic. Our growth of 4.1% in 2020 was mainly down to two factors. The first reason is the additional turnover provided by our new plant in the UK city of Birmingham, and the second is the fact that production of recycled containerboard in Myszków, Poland, is now running at the planned level. However, if you take these two new sites out of the equation and instead consider organic growth, our remaining plants experienced a decrease in turnover in 2020."
Adapted investment programme
In order to limit risk given the ongoing situation with the pandemic, Schumacher Packaging has decided to follow a less aggressive strategy for investment and growth. "As our investments in 2020 only amounted to 50 million because we had to stop many projects due to the pandemic, we have launched an investment programme of EUR 80 million for 2021," says Björn Schumacher. "It is prudent for us not to invest in expansion of our capabilities in the near future. Nonetheless, we want to keep the Group at the cutting edge as regards technology. One example of technological innovation is our completely new digital printing machine in the Greven plant. This success is the fruit of many years of developmental partnership with the company BHS Corrugated Maschinen- und Anlagenbau GmbH."
Highly efficient RSR printing technology
In March, the recently developed RSR® printing machine (Roll to printed Sheet in Real Time) began test operation in Greven. It prints corrugated board at speeds of between 100 and 300 metres per minute. Thanks to a fully automated process, the new RSR® print system significantly increases productivity when producing corrugated board packaging, as compared to conventional flexographic printing. The key feature is that the new machine prints the liner inline – i.e. in the same work step – and the corrugated board is manufactured in the plant also produced by BHS Corrugated. This facilitates a continuously digitalised, highly efficient production process. Thanks to the new digital printing system, high costs from misprints are also significantly reduced.
E-commerce remains a driver of growth
"For many companies, 2020 was a year fraught with stresses", says Björn Schumacher. "It was for us too. It was not easy to make up for the slumps in sales from the first half of the year. The lockdown boom in the e-commerce sector has helped here. A large part of the growth in online trade will continue even after the end of the pandemic, since the lockdown situations have enabled online providers to tap into new customer segments. Not all of these additional sales will return to stationary trade later. E-commerce therefore remains a decisive driver of growth." Yet Björn Schumacher's outlook is cautious: "It is still very difficult to predict how the demand for packaging will develop as a whole over the next few years."