European-Egyptian Strategic Collaboration in Paper and Packaging Sector

The economics of industrial operations are directly affected by the cost and quality elements for the raw materials. Specifically, within the Printing and packaging manufacturing sector of industrial operations, the raw material element of paper is considered to be the most critical input element.

Global sustainability trends are directed toward optimization, these efforts tend to focus on the raw material elements which constitute a large part of the products cost basis. The current trend within the packaging manufacturing chain is to drive cost improvements across the chain. This is being accomplished by utilizing lighter weight paper materials that additionally contribute improvements to the achieved quality level, while simultaneously meeting the defined characteristic and properties of a substantially higher weight paper material.

Supply studies performed within the Egyptian market during previous periods, have identified a supply deficiency of lighter weight or alternative paper materials. The discovered lack of availability was found as a negatively impact the cost calculations and further impeding the paper and packaging industry from achieving necessary cost optimization. The studies further determined the supply shortfall would further impact the Egyptian manufactures on a competitive basis globally. These conclusions further drove the desire to find or develop a solution, that would provide the opportunity to fulfill the “Golden rule” Lowest possible Cost at the Highest quality level.

First Line Company for Industry and Trading (SAE),determined the proper path forward, was to closely align the actions and strategy of a collective paper/product supply chain, consisting of three unique entities by combining various concepts goals and objectives into a common team concept. The combined collaborative efforts resulted in a determination, that when implemented the concept would yield cost effective benefits for all parties.  It was clear that the efforts would result in positive impact to the National economy of the Egyptian paper and packaging industry. The initial phase culminated in agreement between the companies; Careo (Italy), First Line Company (Egypt), and Roxcel (Austria) during December 2014 in VillaSanta Lucia paper mill – Italy.

The persons representing the combined strategic team consisted of Sébastien Paget, Overseas Sales Manager at Careo, Khalid Abdul Rahman, Managing Director of First Line Company, and Peter Hutter, Overseas Sales Manager at Roxcel.

The discussion resulted in VillaSanta Lucia factory agreeing to supply the Egyptian market with the prerequisite” High Quality”, light weight duplex material for further distribution within Egypt through First Line Co. which will perform the necessary marketing functions, supporting awareness building for the competitively priced lighter weight and alternative materials. First will further, supply necessary market information, analysis, with expected requirements directly to Careo and Roxcel.

From his part, Louai Abdel Wahed – Chairman of First Line Company – believes and states that: “We previously undertaken a successful pioneering experiment of building First company and Pack line for industrial development within the Packaging Industry of Egypt, Arab Region .This encouraged our decision to integrate paper importation and distribution as a complimentary part of our core operations.”

“We consider First Line Co. a fundamental financial contributor operating within the Paper and packaging industry, First Line is uniquely positioned to drive specific market forces, we have independent strategic vision for securing the alternative material to the Egyptian market is characteristic of our pioneering spirit. The material availability in competitive pricing structure will facilitate more frequent capital turns and generally allow the industrial sector to achieve higher sustainable performance while affording reduced cost. Additionally the effort will provide or present opportunities for further industries growth directly supporting our national economy.”

In addition, Sebastian Paget – Overseas Sales Manager at Careo – says: “Careo (Cascades and Reno De Medici) has believed for many years a long term strategy for the packaging sector in Africa and Middle East and more specifically in Egypt which is a “second home market” for our company. As the leader in coating liner board we have developed in our mill in Villa Santa Lucia a very high quality board (Vinci liner) specially designed for lamination applications (substance 145 to 250 gsm).”

“Careo has focused its strategy on premium quality board; high class service level threw our commercial approach with competitiveness, sustainable offer and availability of material, reactivity in quick deliveries supported both by the mill and by a quick logistic approach. We uniquely support  threw a full customer service and grant a sustainable approach with both supply in lower gsm grades and a “local” approach our mill being based in south Italy.”

“We strongly believe this strategic collaboration with First Line Company is a key step to strengthen the packaging actors in Egypt with a security of supply and to support the strategic market evolutions in this sector for the future in Egypt.”

Furthermore, Peter Hutter – Overseas Sales Manager at Roxcel – said: “Roxcel, as the leading Paper & Board Company in Europe, with its mission to connect partners of the Paper & Board business worldwide, has the pleasure and honour to confirm our utmost support with all our knowledge and experience to make this project a success.”

“To meet our partners demand, we offer consistency of quality and flexibility for the fast growing Packaging Industry in Egypt, at the same time creating new innovative solutions.”

“After the successful introduction we truly expect this important project to keep gaining momentum for a long-term supply cooperation based on reliability, openness and fairness.”

Concluding the statement about the strategic collaboration, Khalid Abdul Rahman – Managing Director of First Line Company – noted: “The initial phase of entering a new commercial or industrial activity starts with exploratory concepts and plans that will lead to a positive result, prior to considering any financial commitments when the operation is of the scale envisioned as First Line Company. This can only be accomplished by performing in-depth analysis and market research including the lessons learned from ours and others previous experience.”

“Our concern was focused on what the effective parameters were necessary to be provided value added materials to industrial operations within the printing, and paper packaging sector in Egypt.”

“Our marketing strategies are to ensure the availability of the alternative lightweight materials throughout the year for specific segment of the market, that desire cost effective high quality material. This will be accomplished by supplying duplex paper and liner boards of various gramage ranging from 140 to 250 grams. These high quality materials are available as reel or sheets cut to the exact required sizes to avoid excess waste that affect profits margins at the manufacturers.”

“The initial stage toward implementing the idea was a collaboration agreement with Careo, Roxcel and first Line Co., The objective was to fulfill the market gap, by supplying the missing necessary light weight paper materials to Egypt.”

“Our successful Market trial and awareness building was adapted by using a various types of paper. The market testing was performed over a four month period and distributed large volumes of paper to the printing and packaging industry cost effectively with added value. The formal business launch began during January 2015with full-scale importation and distribution according to the market demands.”

“Eventually, First Line Company seeks to expand its business operations across the Arabian market and the promising African market.”