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LINPAC Allibert – Danilo Oliynik talks to The Grocery Trader

With health & safety an increasing priority in the grocery supply chain, and logistics and transport costs continuing to rise, plastic Returnable Transit Packaging’s benefits have never been more appealing to grocery retailers and suppliers alike.

LINPAC Allibert, a global expert in plastic Returnable Transit Packaging (RTP), has played an instrumental role in RTP’s transition from being largely taken for granted as a serviceable product, to a business asset holding the key to significantly improved supply chain efficiencies. Its achievements have been made through a variety of additional features, ranging from clever product design through carbon efficiency measurement to utilising the latest RFID technologies to track containers in pooled networks.

LINPAC Allibert has a strong heritage in grocery, working with the leading supermarkets and their supply chains throughout the UK, Europe and beyond. It understands the needs of customers and their suppliers throughout the food distribution chain and has a depth of expertise in providing tailored plastic RTP solutions; the principles and benefits of which are now being extended throughout general merchandise within supermarkets.

To retain its market leading position in the industry LINPAC Allibert continues to invest in innovation, continually improving its leading products and bringing out new products that fit the requirements of an increasingly demanding market place. At the recent Food & Drink Logistics Show, the LINPAC Allibert team displayed its new lidded MAXIPAC and updated MAXINEST tray for automated warehouses.  The investment extends beyond the boundaries of a traditional injection moulding business, with considerable work being dedicated to gaining accreditations in carbon footprint measurement. For any business making board level CSR statements, objective benchmarking is crucial and LINPAC Allibert is the first returnable transit packaging company to have its products’ carbon footprint throughout their lifecycle independently verified by Lloyds Register Quality Assurance, meaning that it can help individual customers measure their carbon footprint and help advise on methods for reduction. Danilo Oliynik, General Manager, UK, Eire and Scandinavia, LINPAC Allibert, spoke to The Grocery Trader.

The Grocery Trader – Danilo, what does your personal role involve? How much of your day to day work concerns RTP?

As General Manager, I’m accountable for our ‘P&L’ and hence sales, marketing and operations. We live and breathe RTP every day, in our factories and depots or clients’ workplaces. I like to stay close to our customers – we also keep an eye on our competitors and keep close to the market that way.

GT – Are you personally involved in developing tailored RTP solutions for individual customers?

Yes, I am – my twopenceworth goes into the pot along with the sales and marketing and innovation team’s, and I work closely with them regarding “the art of the possible” i.e. combining what we can do with what we want to do.

GT – When was LINPAC Allibert founded?

The business was founded in the UK in 1959 as Lincolnshire Packaging, and has enjoyed a half century of success here and in Europe, designing and manufacturing leading edge products for the retail, food and beverage, logistics and distribution, manufacturing and automotive sectors, as well as a range of supply chain solutions for many of our grocery customers, which we continually revise and adapt to meet their changing needs.

GT – When did you become LINPAC Allibert?

LINPAC Allibert emerged from LINPAC’s February 2007 acquisition of Allibert. The purchase was a significant step in our growth trajectory and strengthened LINPAC’s pan-European materials handling business. LINPAC supplied major blue chip accounts, Allibert supplied SMEs. The merger gave us manufacturing, sales and organisation across a broader geographical area.

GT – What proportion of transit packaging in current use in the UK grocery supply chain is returnable?

Some 25-30% is returnable. To talk you through it, the UK grocery market is nominally 160 billion Euros: the top five retailers have 90%. If you look at the grocery categories where RTP is present, taking out pallets, it’s in fresh, chilled and bakery, 40% of turnover. Of that sector, RTP’s penetration is around 70%, hence 40bn Euros. There’s huge scope for further growth and a massive opportunity in view of customers heightened awareness of green issues and sustainability.

GT – What are you doing to raise awareness of RTP’s benefits?

We are actively canvassing potential users: a decade ago, RTP was a box that stayed back of house, but now it’s key in merchandising. Retailers divide into early adopters and followers. With our experience in developing the market from both a manufacturing and a supply chain stand point we can help guide new users in the actual benefits that they will see through the adoption of RTP.

GT – What proportion of your business is plastic RTP?

It’s all RTP: Around 60% of turnover comes from product, 40% from support services.

GT – Where does LINPAC Allibert rank in the RTP suppliers league?

In the UK we’re number one by quite a margin: In Europe we’re up against other strong national companies, but probably second overall.

GT – Where are you based in the UK?

Our commercial office is in Quinton, Birmingham and our factory is in Winsford, Cheshire. Winsford’s the UK’s biggest such operation in scale and capability. Part of the factory is designed as a ‘lights out’ operation, with a high level of automation.

GT – Where do you design your standard products and tailored solutions?

Our product designers work either at the factory, our commercial offices or at the customer, providing mobile design and analysis. Our division’s largest design resource is here: we also have designers in France and Germany, and liaise on projects across the group. Our performance network coordinates efficiently across borders and enables us to support international customers, such as large retailers and the automotive sector.

GT – Can you talk about your level of investment in blow moulding, tooling and prototyping?

Our investment has been very significant in the last three years. Before the acquisition, we had four UK plants and three offices: now there’s one major UK plant and one office but of course far more manufacturing capacity, and one ERP system across Europe.

GT – Why buy a Returnable Transit Packaging solution from LINPAC Allibert?

You’re asking two separate questions. Why RTP? It’s the smartest option: RTP is effective, even our opponents can’t argue about that. It’s also very cost-effective, the core of the rationale. Thirdly, it’s environmentally much more sustainable from cradle to grave, in design, recovery and recycling. Why LINPAC Allibert? We are RTP’s best exponents: our previous business Paxton produced RTP for at least 25 years: more important is our starting point, our ethos of working with customers and talking to them about their business.

GT – What are plastic RTP’s advantages over single-trip equivalents?

Plastic RTP maximises supply chain efficiencies and cost savings, and reduces the customers overall carbon footprint. Paper/board gets wet, torn and crushed and often cannot adequately protect delicate products such as produce. Cardboard can also prove difficult to handle in DCs and stores. Plastic overcomes the limitations of disposable packaging and brings with it the consistency of operation trip after trip.

GT – What cost savings can plastic RTP achieve?

Well designed and integrated RTP allows you to transport products seamlessly from food manufacturers and packhouses, through DC’s to front of store and also avoids double handling as it forms part of the display unit. This avoids costs within the supply chain through greater vehicle utilisation, reduction in breakages and spoilage and reduced  costs in shelf replenishment. Individual supply chains vary, but the savings in areas such as the cost of loading vehicles, waste in transit and the labour to get product from back of store are considerable and proven and we can make pretty consistent reductions.

GT – Plastic Returnable Transit Packaging is now recognised as the key to significantly improved supply chain efficiencies. Why has it taken until now to happen?

It’s not so much a sudden change, more a progressive realisation, coinciding with increased sophistication in the supply chain and a greater emphasis on the need for efficiency throughout. Our Maxinest for example has been around for 15 years.

GT – Do you advise companies about changing to plastic RTP, and the potential savings?

Yes, we begin by trying to get a clear understanding of our customers’ business requirements and what they are trying to achieve logistically and operationally. From there, we take a consultative approach, particularly if the best solution for them is in the form of  a  bespoke design.

We help customers overcome understandable obstacles to adopting RTP. For example the acquisition price may appear high. A unit of RTP may cost 10 times more than the corrugated cardboard box it replaces but in a supply chain that can turn crates around 10, 15 even 20 cycles per year over several years the economics can be turned on their head, and that’s before taking disposal, wastage saving, vehicle utilisation and health and safety benefits into account.

GT – Which particular LINPAC Allibert innovations have greatest potential to increase RTP’s role in delivering supply chain performance?

In terms of iconic products, in any multiple grocer’s fresh fruit and produce section you’ll find the Maxinest, the plastic crates with the two plastic bale arms, which are the industry stalwarts. There are 60-70 million out there. They are fast becoming a home delivery favourite, too.

GT – How have you responded to rising fuel and transport costs?

Lightweighting is a major focus, and everyone wants to reduce the weight carried around in the supply chain. The lighter the container, the more vehicle capacity can be dedicated to product. We use finite element analysis developed in the aerospace industry, to model structures’ behaviours with different loads and their strength with reduced materials.

GT – What weight reductions have you made?

We’ve made continuous improvements in the last five years, achieving the same performance with 10-20% less resin.

GT – What different RTP products do you supply?

We offer an extensive range of high quality returnable plastic containers, pallets and dollies, all made from virgin or recyclable material and designed specifically to add value to our customers’ supply chains. Our grocery offer includes specialist food and drink containers, such as crates designed for the drinks industry, cheese containers to assist in maturing, and meat containers with special channels to help maintain the highest hygiene levels. Our full portfolio includes award winning stacking and nesting containers, used widely in food retail, manufacture and processing; heavy duty bulk containers, ideal for manufacturing and distribution; and high security, durable attached-lid containers, widely used in non-food retail markets such as fashion, electrical items, CDs and books.

GT – Do you also make milk crates and bread boxes?

We do make milk crates and bread crates. In every Sainsbury’s or Tesco you’ll see our products used in bread merchandising. The Omega bread tray for Bakers Basco Ltd was a combined effort with a leading retailer and various bakeries, to merchandise bread in store. It’s transformed the bread supply chain because you don’t need to handle bread between bakery and shop floor. Egg crates are another special application as are bulk product containers for potatoes. The same containers are used in the DIY sector as bulk retail-ready containers for paint tins.

GT – Can your products be recycled?

In general they can be recycled, and we use recycled materials wherever practical. We use polypropylene and polyethylene, and systematically recycle waste in our processes. We also collaborate with clients to buy back and recycle old products, crediting them for materials. Direct food contact containers tend not to be made from recycled material.

GT – Do you supply plastic RTP to the big pallet pools?

We supply the three ‘c’s – competitors, collaborators and customers, both in the UK and across Europe. We have a huge breadth of diverse customers, and continually strive to provide them with the most up to date products for their own customers’ requirements.

GT – You exhibited the new lidded MAXIPAC and updated MAXINEST tray for automated warehouses at IMHX and the Food & Drink Logistics Show. Can you tell us about those?

The Maxipac is an example of ultra hygienic RTP, which eliminates nooks and crannies attracting germs and dirt. This is ideally placed for the shipment and “one touch” merchandising of large bulk produce items, such as potatoes, onions and maybe even pumpkins at seasonal times.

With Maxinest, we’ve delivered a range extension with a rigid base. When RTP is used in automated supply chains with conveyors, the geometry must be consistent and not bend at all when loaded. These are particularly popular in some parts of Europe, and are fitted with RFID before being shipped.

GT – Are you launching any more new plastic RTP products in 2011?

The short answer is yes. We’re working on a new product that is specifically designed for maximum supply chain efficiency, as we previously discussed. This is due to appear before Christmas. Some of our innovations are technology led, others are customer-specific.

GT – Do you have a dedicated design group working on creating attractive packaging?

Our designers work in response to sales and marketing’s initiatives, representing the needs of both the customers and the market place. Successful designs must combine functionality, ‘produce-ability’ and aesthetically pleasing solutions.

GT – How do you go about developing RTP solutions for individual clients?

It’s easy to underestimate the number of stakeholders involved in a tailored solution. With bread you have to consider the bread buyers, the category people, store management, the supply chain, the bakery, the vehicle operators and health and safety – the list goes on and on. To get the initial brief you have to consult them all. The process is exhaustive and can take a period of time. Before any product is launched it has to go through vigorous testing and be signed off by all the interested parties.

GT – How long does it take to achieve a design?

It can easily take a year to perfect the prototype, but once the final design is in place the tooling phase can be three to four months.

GT – Plastic RTP takes considerable looking after. What support services do you offer for RTP customers?

Many of our products are actually practically maintenance free, but we support our products with a sophisticated portfolio of supply chain services, from asset management and RFID tracking through to leasing, maintenance and repair, washing and buy-back options. I‘ve never met a customer who’s looked at a plastic crate and said “I want to own one of these,” but they all want the benefits that the product delivers. If we can help customers overcome barriers of ownership, maintenance and repair, we’ll do it.

GT – Which of your RTP products can be RFID-tracked? What’s the unit cost?

All our products can be bar coded and RFID-tagged, for a matter of pence. It depends on the environment they’re used in: we can supply equipment with tags and bar codes pre-fitted. Asset protection is one thing, but automating data capture through bar code or RFID is more important in the supply chain.

GT – How long do your RTP products last for?

Our plastic returnable packaging lasts on average for 7-10 years.

GT – How long does it take customers to see a return?

Generally customers see a return on investment across the supply chain quite quickly. Clearly it depends on where you start from. There’s overwhelming empirical data to support the case for plastic RTP contributing to the bottom line. If we can’t give a better result, there’s no reason to talk to us!

GT – Besides being ‘green’ and hence worthy, what’s the practical significance of having your products’ carbon footprint verified?

Having a product’s full lifecycle carbon footprint independently verified to PAS2050, makes it possible to compare different types of plastic RTP and the corrugated equivalent. This helps our customers choose the most carbon effective transit packaging and measure improvements in their carbon footprint. We’re surrounded by “greenwash” because it’s topical, and it’s important to be convinced that it’s relevant! We were the first company to have our carbon footprint independently determined. We’re doing a project for a major retailer, developing a container for importing fruit from Europe. Fruit normally comes in corrugated boxes: on current volumes, we’ll help save 4,300 tonnes of CO2 over five years by using RTP, even with crates returning empty. It is important that people can demonstrate improved performance pre and post the introduction of RTP.

GT – Has the recession prompted companies to use more plastic RTP?

The main thing the recession has done is make people hesitate about capital spending. It forces us to be smarter than yesterday, find a more compelling case and substantiate our claims.

GT – How have rising commodity prices affected you? What can you do?

Polypropylene prices have gone up 14% in 2011 so far, 40% since January 2010. Polyethylene has risen 16% in 2011 and 30% since January 2010. As a business we must use all the mechanics of thrift to reduce cost: use less material, recycle more and work with universities and resin suppliers to develop materials with better performance. We must also try to shelter customers from raw material cost inflation. Rising commodity prices are a big challenge for everyone.

GT – Finally, where do you see use of plastic Returnable RTP, and LINPAC Allibert, going from here?

Onwards and upwards! We spoke earlier about RTP penetration: It’s reasonable to expect to go into other sectors with new products. We’re working with customers to identify non-value adding costs and see if we can remove them. The cost of moving a loaf of bread is a classic example, which we’ve solved with the Omega bread baskets. We go on looking for ways to eliminate waste in the supply chain in this and other sectors. Finally, a current growth area is internet shopping, with a lot of products moving from store to consumer in small consignments, which plastic RTP can make much more cost-efficient.

LINPAC Allibert

Tel: 0121 506 0100

www.linpacallibert.com