Interview with Mr. Axel Kühner, CEO, GREINER, Austria

Mar 2020 Interview with Mr. Axel Kühner, CEO, GREINER, Austria

PRISMA REPORTS: Greiner celebrated its 150th anniversary last year, and has become a key global player in the plastics and foam industry, with over 10,000 employees, €1.5 billion revenues, and a presence in 139 locations. The group is active in a diversified range of fields, including the production of foam and the processing of plastics for the packaging, furniture, sport, automotive, medical technology and pharmaceutical sectors. It also numbers among the top manufacturers of extrusion lines, tools and complete profile extrusion plants. To start with, can you give me a rapid historical overview of the group? What is Greiner’s current positioning, what are your core fields of expertise and technologies, and how do you stand out?

Axel Kühner: Greiner began initially as a cork producer in the 1860s and gradually evolved into a manufacturer of new materials. We started to develop plastic processing technologies in the 1960s and on this basis we moved in various directions and into industrial areas such as packaging, comfort business for foams and mattresses, upholstery for furniture, and finally the medical and extrusion field. As a family business, we are very much focused on balancing risks and have diversified our activities in order to cover differing sectors and segments of the plastic processing industry. Today, we occupy premium positions within all the industrial spheres in which we are active. We manufacture products with high value added and attempt to avoid being merely a commodity producer. Austria is therefore still an excellent place to be headquartered because it offers both a large pool of skilled personnel and a solid platform from which to expand. What unites our different divisions is an extensive knowledge of plastics.

As of today, 75% of our turnover is generated in Europe, but as part of our global expansion strategy we aim to further develop our activities beyond the continent. A large portion of our growth potential is located in foreign markets and in future we intend that these will be the object of our intensified focus.

Prisma Reports: Greiner has just received the Henkel Sustainability Award for its innovative detergent packaging. Can you give me a little tour of Greiner’s most unique solutions and technologies today, how do they contribute to today’s global industrial challenges?

Axel Kühner: In the medical field, Greiner invented the vacuum plastic tube for blood collection. Previously, medical tubes were made of glass, which could break or cut the skin thus leading to infections and all sorts of issues. This is not the case with plastic tubes and today Greiner is one of the leaders in the global market for plastic vacuum tubes for blood collection.

In the packaging industry, we have invented the so-called K3-cup, which combines both plastics and cardboard. A separate layer of cardboard is wrapped around a plastic yogurt cup and this leads to both value added in terms of marketing, as it is easier to print on cardboard rather than on a plastic yogurt cup, and a reduction in plastic packaging because the paper can be separated from the plastic, which is good for recycling and sustainability. In our mattress business we have created a mattress, which uses a certain type of fibre that can absorb humidity and retain fluids. When you get up in the morning and release the pressure on the mattress, it releases the humidity and therefore you do not feel sweaty at night. We have also recently launched a cushion for aircraft seats in which we have included smart electronics with sensors, that will indicate if refurbishing is or isn’t necessary.

We have a very strong focus on innovation in all the industrial areas in which we are involved. And it is these innovations, which we implement in our products, that enable us to make a difference in the market. In line with our overall vision of “Plastics for life” we endeavour to create products that add value to everyday life, and ultimately benefit people.

Prisma Reports: Can you tell me more about the group’s R&D efforts, what’s top of your agenda regarding research and development?

Axel Kühner: We spend about 2% of our revenues on R&D, as with more than 2,500 employees in Austria, the only way for us to succeed against our competitors is to lead in innovation. Employment costs are very high in Austria and therefore one has to create products that may not be cheap, but are clever.

We also enjoy close links and cooperation with universities, as well as with our local industries. Austria has a strong position in the automotive industry, but our companies in this field are only suppliers. By contrast, in the plastics industry we are the leaders of the pack. Many of the world’s top market players in the plastics industry are located in Upper Austria, and this is a unique situation, which gives us a cutting edge that we try to use to maximum advantage.

Prisma Reports: Sustainability and environmental protection are strong imperatives at present, and that includes plastic and packaging reduction. Greiner has this “Plastics for Life” motto and has set up even a special sustainability committee, so clearly it aims to be an exemplary player in that regard. Concretely, what are you doing to improve sustainability not only in your products and technologies, but also throughout the production process?

Axel Kühner: We very much welcome all kinds of initiatives relating to sustainability and plastics. The current plastics bashing is both a threat and a challenge for us, but we like to also see it as an opportunity. An opportunity for differentiation and a chance to bring cleverer and smarter products onto the market. Today, plastics are omnipresent from aviation to every other conceivable industrial field. In fact, we can neither eliminate them, nor imagine life without them. However, we are naturally aware of the huge issues such as the marine pollution that they are causing and we must do something in response. We try to come up with smart solutions to improve the situation and reduce the plastic waste in our seas. I believe that innovative companies will lead the way in creating different types of products and more recyclable items, which will not end up in our seas and oceans. We are seeing a shift in the packaging industry. Until two years ago, our customers focused on the price of a plastic product rather than its quality. This is changing. Now customers increasingly want good plastic products. We cannot live without plastics and therefore our approach is to reevaluate where plastic products make sense and where they don’t. Moreover, to propose products that make sense and add value and steer clear of products that do not. For example, plastic Q-tips and cutlery no longer make sense because there are alternatives. For this reason, they are to be banned in the EU. Greiner was the first producer in Europe to refrain from using polycarbonates in food packaging because polycarbonate includes BPA, which isn’t safe. We decided to avoid such materials even if that meant losing business in some markets such as the Eastern European countries, where our customers were still employing them.

First and foremost, the current pressure for sustainability and plastic reduction represents an opportunity for us to differentiate ourselves with products that are better than the rest. We need to care for the planet we live on and leave a better world behind for our children. And at the same time, this will create business opportunities.

Prisma Reports: Are you looking at alternative materials? What should the plastic industry of tomorrow look like in your opinion?

Axel Kühner: We are looking into different materials such as bio-based plastics, but in our opinion, we don’t see them coming for at least another decade. For example, it is senseless to use our agricultural resources to produce maize in order to turn it into yogurt cups. Besides which, with these technologies we are still very far away from being able to offer the same price level. Consumers are not willing to pay more for them and that is the status quo. As long as this situation remains unchanged, at a minimum we do not envisage bio-based plastics arriving for another ten years.

For us, the best alternative is recycling technologies. We are convinced that a circular economy is key and will remain so for the next decade at least. Therefore, we are pondering what we can do in terms of design, processing and production in order to enhance the recyclability of our products. This is our main focus and we have launched various initiatives in this regard. One is tackling product design, another product materials, and for example, we have already managed to use a large quantity of recycled materials in a shampoo bottle. On average, the market employs only 30 to 40% of recycled materials in a recycled shampoo bottle, but in our version we have succeeded in using more than 90% recycled material, which is a huge amount in comparison with the market norm.

We are also thinking about the kind of recycling machines that we can design, which will possess enough know-how to be able to separate materials and for example differentiate between PET and RPP or polystyrene. We are actively engaged in recycling technologies and one of our divisions focuses on improved extrusion technologies, which represent the third cornerstone of our recycling approach.

Prisma Reports: How important is it to share also these best practices and inspire by your example?

Axel Kühner: We had a discussion a few years ago as to whether we should communicate more in this regard. In my opinion, we should be very offensive in terms of communications, but this approach raised eyebrows because the danger of being too openly communicative is to land on the radar screens of the NGOs. We do a great deal to improve the current state of things, so why should anyone point the finger at us if we are proactive? We acknowledge publicly that there is a problem in which we are a factor. However, we are also part of the solution.

The industry used to stay silent about these issues and nobody wanted to talk about them, but I think that it is important to recognise that although we are causing problems, we are simultaneously part of the answers. We are not in a black-or-white situation and it is not as if we can do without plastics tomorrow and the world would thus be a better place. This is neither realistic, nor the truth. If one takes yogurt for instance, people tend to believe that glass packaging is more eco-friendly, however in a truck full of glass-packaged yogurts one only has 65% yogurt, whereas plastic cups contain 96.5% yogurt! That’s a huge difference and glass has to be reused very frequently for it to make ecological sense.

We attempt to communicate in a very balanced and open way. Yes, there is a problem and plastic products must not end up in the seas or in the environment. But if we as consumers assume the responsibility of making things better, it will make a difference. This is what we are trying to do, and from my perspective this functions well and people understand. We have never denied our responsibility and we have adopted a proactive approach to the improvement of our processes and technologies in order to change the situation. Therefore, we have taken the liberty of openly stating that we are doing good. We are an excellent company and really do wish to add value to society.

Prisma Reports: Greiner is present in 139 locations. Can you tell us more about the group’s expansion plans, what are the priority markets for you at present?

Axel Kühner: The US is one of the target markets in which we wish to expand and as a key global player in the plastics and foam industry, all of Greiner’s divisions already have a presence in the US. At the moment, we see the US market moving in different directions, which is quite interesting for us. For example, the plastic packaging industry is changing rapidly, as Americans are altering their nutritional behaviour and are downsizing to smaller scale packaging. Single meal portions have now been introduced in the US, which were previously non-existent. Consequently, the specific technologies for smaller packaging are in demand because they were simply lacking and for us, this translates into large-scale sales potential. Furthermore, the US is the world’s biggest medication market and is therefore equally a target market for our medical product division. Emerging markets are also very important markets for Greiner and in particular we have a focus on the markets in Brazil, India and China where there is a lot of leverage.

Prisma Reports: The group has done several acquisitions over the years. In 2017 Greiner Packaging made two significant acquisitions in Turkey and Russia for example, Greiner Bio-One acquired Vacuette in Spain. Do you have any further plans for acquisitions this year, or for expanding your network and partnerships?

Axel Kühner: We have deployed a long-term strategy for Greiner with the aim of identifying what we need to tackle before 2020 in order to be successful after 2040. As part of this strategy, we have added fresh initiatives in the field of printed electronics and 3D printing, which are not new technologies, but are new to Greiner. We want to dig deeper in this business field and therefore we need to think about partnerships and joint ventures. Indeed, electronics is such a vast domain with so many different potential applications that it is not something that one can handle alone and consequently we would be better off working with a partner.

Prisma Reports: You were appointed at the helm of the company 10 years ago, which was a breakthrough move as, for the first time the company’s management was taken out of the hands of the family. Reflecting on this 10-year anniversary, what would you say are your key achievements or your trademarks within the group?

Axel Kühner: Greiner has managed to retain the core of its culture and values as a family business, while at the same time transitioning into a more global, diverse and modern group of companies. During the past decade we have become highly professional, having put a new HR system and a personal development scheme in place. Moreover, we have professionalised our sales and technologies, while at the same time maintaining our focus on people. This is what is unique about Greiner. We embody the best of both worlds, which people appreciate and somehow this works out quite well for us, too.

Prisma Reports: Going forward, where would you like to take the group, say in the next 5 or 10 years?

Axel Kühner: There are so many fields in which plastic products can add value to our lives. Our vision is to identify additional segments where Greiner can be active and add value. As of today, we are mainly involved in the medical and packaging segments, but I think that apart from our printing electronics initiative, which we have already identified, there are more industries out there where we can add value. That is our long-term vision. Many people today are using Greiner’s products without knowing it. If you eat yogurt for example, you don’t care who produces the cup and when you go to bed you are unlikely to think that you are probably sleeping on a Greiner mattress. However, many more areas exist in which we can add value and this is our vision.