PETpla.net Insider 09 / 2010

REGIONAL MARKET REPORTS 18 PET planet insider Vol. 11 No. 09/10 www.petpla.net The PET Story The French PET story is very much the story of the change from PVC to PET. The PVC bottle was intro- duced in France in the 1960s (Vittel). The PET bottle was introduced between the late 1980s and the mid- 1990s (Evian). PVC had the disadvantage of being breakable during transportation. Therefore initially PET bottles were used by Danone for export. The entire conver- sion for the local French mass market by brand names such as Evian/Volvic (Danone) as well as Contrexeville/ Vittel (Nestle) took place roughly 8 to 9 years later in 1995/1996. The PET preforms were injection moulded on Husky systems, the PET bottles blown on machines from Sidel. France is the home of Sidel, whose head offices are located in Le Havre. But at first their PET blowers did not go into France, but to Great Britain for the carbon- ated beverage business. Thereafter the first high-speed PET machines went to the United States, where Sidel’s “American saga” started, even before the machines found their way into France. Coca-Cola was the first major reference for using PET, and for Sidel and Husky supplying the machines. The global crusade in support of the new PET material for beverage packaging began with Coca-Cola. The French company Sidel, working with the Canadian company Husky, made important, if not essential, contributions to the development. The pioneer, Robert Schad, Husky’s founder and then president, joined forces with the visionary Fran- cis Olivier, president of Sidel, in an understanding to develop the high-tech, highly specialised equipment for PET applications. With the understanding that the best equipment is best for their customers and their custom- er’s business, they set the PET standards. Since then Husky and Sidel have taken the lead in the markets, globally and in France. Timing was perfect for both companies, who were able to convert their early pioneering experience into a global lead with regard to the number of machines in operation: Husky today has more than 4, 000 PET injection moulding systems in the world and Sidel more than 5,000 PET blowing systems worldwide. But, to the benefit of French beverage producers and fillers there are strong competing contenders to challenge those leaders, and keep them on their toes - names such as Netstal and Sipa, KHS with Corpoplast, Krones and others. PET resin usage in France A total of 333,000t of PET resin was converted in France in 2009. Amongst the suppliers of resin for French conversion names such as Indorama (Indone- sia) and NovaPET (Spain) were frequently mentioned. The biggest converter, Artenius (APPE), certainly obtains PET resin from La Seda (Spain), and Retal France from the Retal Neo PET plant (Lithuania). But both Artenius and Retal, despite vertical integration, claim not to be obliged to use resin from their own groups. Injection moulding of preforms (two-stage system) A total of approximately 150 injection moulding pre- form systems are installed in France with 2 to 4 systems expected to be added annually over the next few years. At present more than 90% of these systems are from Husky. Converters When touring France, we saw the PET converting plants as listed below and have counted as follows: APPE converter with 30 systems  Danone filler with 25 systems  SGT converter with 15 systems  PDG converter with 7 systems  Retal converter with 5 systems  A large number of injection moulding systems are with Alma-Roxane and Nestle Waters (fillers), some with Alpla and MPM (Martinique). Danone normally injection mould some 70% of their preform require- ments in-house and buy up to 30% from converters. Coca-Cola buys preforms primarily from APPE and Retal. Number of cavities distributed between converters and fillers The highest number of cavities in Europe are in Italy and France. In France the biggest competitors for converters are also their biggest customers, i.e. the big fillers. The cavity distribution between independent con- verters and in-house fillers is 52% in favour of fillers – very different from neighbouring countries. But why? Because the very large volumes are under the con- trol of big beverage groups – Alma-Roxane, Danone Group and Nestlé SA. These groups each have sufficient volume and finance to cover and control the entire PET chain from injection moulding to filling. Coca-Cola, how- ever, continues to buy preforms - mainly from APPE and Retal. Cavities Cavities In total Converter % Filler % France 9,116 4,384 48% 4,732 52% Italy 9,428 7,068 75% 2,360 25% Spain 6,810 4,650 68% 2,160 32% Germany 7,156 4,380 61% 2,776 39%