SIG is driving growth by working in partnership with customers to bring food products to consumers around the world in a safe, sustainable and affordable way.
Flexible and innovative offer
Successful go-to-market strategies
€ 755 m
Core revenue 2018: €733m
SIG’s aseptic carton packaging business originated in Germany and Europe remains the largest region globally for aseptic carton packaging. Our largest sleeve production plant is in Linnich, where we also assemble filling machines and conduct R&D and consumer trials.
Our presence in the Middle East and Africa is led by our 50/50 joint venture SIG Combibloc Obeikan. Sales of the joint venture are not consolidated but our share of net income is recognised in the group income statement.
Increasing share of wallet and winning new customers in Europe
In a mature market for white milk and juice, many food and beverage companies are focused on efficiency and cost. However, there are opportunities for growth from emerging categories such as plant-based dairy alternatives and water. Consumers’ desire for novelty and variety, with an increasing focus on healthy and natural products, is giving rise to a proliferation of SKUs. This means that the value chain has to become more agile and flexible.
In this environment, SIG is pursuing two clear go-to-market strategies. We are not only defending our position but also growing with existing customers by ensuring that we can meet their need for flexible and cost-efficient solutions. We are winning new customers and entering into and growing in new categories, while at the same time expanding our European reach. Our progress is supported by our filling capabilities and our unique offer in terms of size and format flexibility.
Our strategies are underpinned by our core strengths of operational excellence and advanced after-sales service. We have upgraded our solution offering and portfolio as well as our sales tools and processes. Moreover, the strength of our packs’ environmental credentials is an increasingly important differentiator in our discussions with customers. Our sustainable product innovation enables us to help customers respond to new regulatory requirements and meet their own targets for sustainable packaging.
Maspex is the market leader in non-carbonated soft drinks in Poland and has been a SIG customer since 2001. The close relationship developed over the years has enabled us to work together on product development in order to meet consumer needs.
When Maspex wanted to refresh consumer appeal for their natural fruit juice range, they decided to introduce combidome for the first time in Poland. This solution offered differentiation and a new level of convenience.
Together SIG and Maspex developed new concepts aimed at attracting new consumer groups and leveraging SIG’s volume flexibility.
With the installation of three SIG filling machines, Maspex has successfully launched a new product range for its popular Tymbark brand, including most recently 500ml on-the-go vegetable juice drinks.
See how Maspex is promoting the new Tymbark range here:Watch video
Growth through partnership in Middle East Africa
SIG Combibloc Obeikan’s geographic territory spans 70 countries in Middle East Africa (MEA), with revenue currently generated in 17 countries, the most significant of which are Saudi Arabia, South Africa, Egypt, Algeria and Iraq. There is further potential for expansion in selected markets.
The diversity of MEA means catering to the needs of a wide variety of consumers and customers. The Gulf states and South Africa are more sophisticated markets, with relatively high incomes and demanding consumers and customers. Sub-Saharan Africa generally is more focused on affordability, with growth driven by rising incomes and urbanisation.
Our performance in 2019
Rising interest in sustainability in Europe
In 2019, we were again able to grow our sales slightly in a market expected to be flat to slightly declining in some categories. Our outperformance reflects our format and volume flexibility, competitive total cost of ownership and the innovation and service we offer our customers.
We continued to win new customers including Wartmilk, a district dairy co-operative in Poland and Juustoportti, a family-owned Finnish dairy company.
Furthermore, we installed additional capacity with customers with whom we only recently established a relationship. These include Pfanner, an Austrian premium manufacturer of juices exporting to many countries, and Covap, a large dairy cooperative in Spain supplying a leading retailer. In order to qualify as a strategic partner of Covap, we needed to pass a 24-month system and performance test. We were indeed able to demonstrate the strength of the SIG system with the highest system quality level and to show that we reduce filling costs for the customer through our superior line efficiency.
Fast innovation cycles
€ 667 m
Core revenue 2018: €598m
+ 6.0 %
change at constant currency
Millions of new consumers create multiple growth opportunities
Most countries in the Asia Pacific region continue to show positive macro trends, with economic growth bringing higher living standards. Across many markets in South East Asia and India, millions of people are only now starting to consume packaged food and beverages. This rise of these new consumers, driven by rising disposable income, urbanisation and new consumption habits, represents a huge opportunity for our industry.
At the same time, young and growing populations are adopting modern lifestyles, with a focus on convenience and more on-the-go consumption. Consumers are also increasingly aware of health and wellness issues and are looking for premium and higher quality products, with sustainability credentials also of growing importance.
The liquid dairy market – which accounts for most of SIG’s business in Asia Pacific – continued to expand in 2019. In China, ambient high-viscous drinking yogurt remains the fastest-growing product category and is benefiting from the ongoing trend towards premiumisation.
Our performance in 2019
Premiumisation in liquid dairy drives growth
In 2019, revenue growth was driven in particular by China, where combismile continued to expand, and by Thailand and Indonesia.
We continue to grow with existing customers, with market momentum amplified by the launch of new products and formats enabling expansion into new categories. Following the launch of combismile, we have a firmly established position in the premium market in China. And in 2019 we signed a new contract with a strategic customer in Vietnam to place our first combismile filler in South East Asia in 2020. Heat&Go, the only carton that can be heated in a microwave, continued to enjoy success in South Korea for products that can be consumed either warm or cold, such as coffee or soy milk.
We continued to expand in the liquid dairy market across the region. New customer wins included YonSei in South Korea, who shifted part of their liquid dairy filling from a competitor to SIG.
We also won new customers who are focusing on premium and innovative products. In Thailand, Tofusan chose SIG for the launch in cartons of its premium organic soy milk – a product usually sold in PET bottles – targeting busy, health-conscious millennials. In South Korea, we placed a filler with Seokang, whose innovation focus includes oat milk, rice milk and protein shakes.
2019 was marked by a wealth of new product introductions leveraging the SIG system and proprietary technologies, such as drinksplus, to address premium segments and offer new experiences to consumers. In Thailand, DutchMill launched soy milk with chewable cereals under the DNA brand, while in Vietnam NutiFood launched NutiKul, a drinking yogurt with particulates.
Our confidence in the further growth potential of both China and the rest of the Asia Pacific region is demonstrated by our decision to build a second plant in Suzhou.
Regional Tech Centre in China attracts customers from across the region
In November 2019, we were proud to officially open our new Asia Pacific Tech Centre in Suzhou which will cater to the faster innovation cycles in Asia Pacific and Oceania. Here we are testing innovative structures, shapes and product formulations. We are also driving the expansion of combismile into new and growing categories such as vegetable protein drinks and ambient flavoured milk.
Customers have been visiting the Tech Centre since the end of 2018, in order to test for themselves our total solutions offering comprising upstream, downstream and formulations. The Tech Centre also has a world-class facility for machine assembly and training services.
Customer success story
One of our key customers in South East Asia is the Dairy Farming Promotion Organization of Thailand (DPO). DPO was founded in the 1960s following a visit to Denmark by King Rama IX, with the mission of promoting dairy farming in Thailand. DPO Is now a state-owned enterprise with a market share of close to 50% for mainstream milk.
SIG’s partnership with DPO started in 2004 and today we provide close to 75% of their aseptic packaging – two of DPO’s four aseptic plants run entirely on SIG filling machines. One of these is the flagship Muaklek plant, where a programme of expansion and modernisation was undertaken in 2016. SIG was awarded full management of the turnkey project for aseptic filling in partnership with JBT/Stork.
DPO was convinced by the line efficiency offered by SIG – 24,000 packs per hour – together with the volume flexibility and low waste rates.
Watch more from Dr Narongrit on DPO’s relationship with SIG:
"We have a true partnership with SIG. SIG’s reliability and high efficiency enable DPO to receive the increasing quantities of raw milk, and produce and deliver the very high quality of Thai Denmark products."
Diversity in dairy
From affordable to premium products
€ 330 m
Core revenue 2018: €297m
+ 9.7 %
change at constant currency
A vast array of consumers with different needs
The region covers a vast array of consumers with different needs, demanding appropriate go-to-market strategies in each area.
Carton represents over 70% of total ambient packaging in our key South American markets. In Brazil, the world’s second-largest aseptic carton market, there is a focus on meeting the key consumer trends of affordability as well as naturalness and authenticity. The flexibility of our filling lines is a key tool when it comes to affordability, as customers can rapidly switch between sizes and products depending on consumer spending power.
Digitalisation is also playing an increasing role as consumers seek a customised experience and assurance on the origin of the product they are drinking. And, as elsewhere in the world, consumers in South America are increasingly mobile.
Customer success story: Alpura
In Mexico, there are significant growth opportunities in liquid dairy through serving the needs of both price conscious and premium consumers. The Mexican white milk market is highly concentrated, with two players accounting for over 75% of the market.
Our partnership with Alpura, the second-largest dairy co-operative, began in 2015 with the installation of our first filler for evaporated milk. Further expansion of the partnership has been underpinned by the SIG offer of flexibility,
innovation and sustainability. Successful launches with Alpura have included combiblocMagnum with superior print quality, resulting in more impact at the point of sale and higher value perception by the consumer. Most recently combiblocMidi was launched with the Forti Plus brand for recombined milk.
In 2019, Alpura became our second largest customer in Mexico with a total of seven SIG filling machines.
Offering affordability and authenticity
Sales growth in 2019 was robust across the region.
We were able to achieve growth in Brazil despite continuing uncertainty in the macro-economic environment. We continue to demonstrate our strength in enabling customers to fill high-viscous products such as sweetened condensed milk. These products are benefiting from a return to cooking at home, including the preparation of home-made desserts.
Catering to the need for affordable on-the-go consumption, we launched 150ml formats for still fruit drinks and flavoured milk with two of our key Brazilian customers.
With the rising trend in South America towards naturalness and authenticity, consumers are seeking products and brands with values to which they can connect. They want to know what they are buying and where it comes from. Dairy producer Languiru has launched Origem Milk, a new premium milk which uses end-to-end traceability to track the milk from selected farms to the shelf. By scanning a QR code printed on the package, consumers can identify the farm at which the milk was produced and the time of collection, and can follow its path all the way through to packaging.