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Feb 1st, 2007                                Print this article

Polish processor wins growing business with stretch films

By Matt Defosse

Customers, local officials, and shareholders tour Eurofilms’ facility in Olawa. Standing near the processor’s newest cast-film extrusion unit, Battenfeld Gloucester sales/service director David Finnemore, left, confers with Eurofilms CEO Tadeusz Nowicki.

With its initial public offering and capacity expansion completed last year, management at Polish cast-film processor Eurofilms says 2007 will bring continued, but measured, growth.

Eurofilm’s history is short. Tadeusz Nowicki, CEO and majority owner of leading Polish PVC profile and sheet extruder Ergis (Wàbrzeêno), saw an opportunity and in 1998 acquired an unprofitable PVC wall-coverings plant in the southern Polish town of Olawa, near Wroclaw, closed it, and built one of Europe’s faster-growing cast stretch-film extrusion facilities.

Nowicki recalls locals’ concerns that the closing of the wall-coverings factory would mean lost jobs in the neighboring town, but he says that in fact Eurofilms has been able to hire back almost all of the workers and now employs about 110. Nowicki says Eurofilms’ turnover is about ?35 million, annually and profitably. Sister company Ergis brings in ?59 million/yr turnover, mostly from extrusion of PVC sheet and profiles. Wall coverings, once the firm’s mainstay, now accounts for just 3% of sales.

Grzegorz Kedzierski, president of the processor, recalls, “When we started with 9000-tonnes/yr capacity in 2000, many doubted we would survive in this highly competitive market.” In fact the firm is thriving and late last year installed its newest extruder, a Cast 2020 line from Battenfeld Gloucester, the second of these, bringing total capacity to 27,000 tonnes/yr, almost all of that for linear low-density polyethylene (LLDPE) stretch film. The firm also just added a second small Comet (Arlungo, Italy) extruder to increase processing of PVC shrink film to about 1400-tonnes/yr, and it also distributes BOPP film in Poland. LLDPE stretch films primarily are used for wrapping palletized goods; PVC shrink film sees use in food packaging.

For cast LLDPE film the firm has three lines, the oldest a Nextron, and the two Cast 2020 units from Battenfeld. Edge trim is fed directly into two reclaim lines (one from Austria’s NGR, the other from Italy’s Tria) and then fed directly back into the extruders. All output from the newest line was sold before a single meter was extruded, says Kedzierski, but despite that demand he is cautious about plans for the coming year. “We certainly can sell the capacity but we want to do it profitably,” he quips.

Nowicki allows that expansion is planned. In June 2006 Eurofilms sold just under half its shares as part of a initial public offering on Poland’s stock exchange, a move Nowicki says will help fund expansion in capacity and in the product portfolio. Ergis remains the majority shareholder in Eurofilms. Late last year Nowicki said, “We’ve promised the market that by the end of January we’ll make a major announcement regarding future investment.”

Eurofilms faces one large competitor domestically, the Polish subsidiary of global stretch-films processor M.J. Maillis (Athens, Greece), but Nowicki says smaller stretch-film processors form almost daily. [Poland and much of Eastern Europe lack cutting-edge plastics extrusion operations; see related article in August 2005 MPW.]

Eurofilms’ customer base is composed of food, beverage, and consumer goods’ distributors, with the customers’ geographical spread reaching east to Russia, west to the Netherlands, and south to Italy. Exports currently account for about 20% of sales and are climbing. The entrepreneurial nature of the operation is evident in Eurofilms’ export manager, Katarzyna Bukowiecka, who in 2000 started as a secretary there to help finance her studies at the university in Wroclaw, and after graduation stayed with the firm and was offered positions of increasing responsibility.

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