What does ERGIS do?
Tadeusz Nowicki: The ERGIS Group is a leading Central European manufacturer of PE stretch film and straps used for industrial packaging, producer of PVC and PET-based flexible and rigid films and laminates used in the packaging of food, pharmaceutical, and technical products; and PVC specialized films such as geomembranes and linings, converting more than 120,000 t of plastic material per year. ERGIS factories are located in Poland and Germany. ERGIS SA is listed on the Warsaw Stock Exchange. ERGIS factories are ISO 9001:2008 and 14001:2004, BRC/IoP certified. ERGIS Group’s greatest assets are an experienced team well-versed in the dynamics of the market and state-of-the-art production equipment adapted to a wide range and high quality of the products. These elements combined contribute greatly to the company’s success and maintaining a strong market position as well as a very good image. ERGIS Group has been awarded, for the second time, the prestigious CSR Silver Leaf award by the Polish magazine Polityka, which covers seven areas which are very important for the CSR. These are corporate governance, human rights, conduct towards employees, environmental protection, customer care, business integrity and social commitment. We take care of what surrounds us. The protection of the environment is of great importance to us. We use advanced plastics recycling technologies with the aim to protect the natural environment as well as we can. We understand and appreciate the potential of human capital. As the holder of the 2014 ‘Grand Prix Responsible Employer’ we take care of the professional development of our employees and respect their private lives. We are in close cooperation with local organizations and make efforts to get involved in important social initiatives. Each year we grant scholarships to students of selected fields.
What distinguishes you from your competitors?
Tadeusz Nowicki: We have some interesting developments in various fields, but the one we are most proud of is the fact that, thanks to our cooperation with Exxon Mobil and Windmöller & Hölscher, we became the first and Europe’s only manufacturer of stretch films with nano layers. Being only several microns thick, the film consists of 33 layers and some of them are ten times thinner than the other ones. The properties of nanoERGIS® film are much better than of conventional products, which not only allows customers to use less material compared to traditional stretch films, but also provides greater safety of the loads. This way, we can offer a product which gives up to 50% of savings to our customers and is eco-friendly at the same time. In order to improve this product even more, we established ELSA (Ergis Load Stability Academy) – the second research center of this type in Europe, which enables company’s customers to test the stability of loads on pallets along with determining the distribution of stress at the crucial meeting points of film and the load when the pallets are subject to the acceleration up to 0.8 G. In March 2014 we increased our capacity of nanoErgis® production to 30,000 t per year.
“Our products allow customers to use less material compared to traditional stretch films and also provide greater safety.” Tadeusz Nowicki CEO and shareholder of the ERGIS Group
We also have interesting technical solutions: waterproofing geomembranes. These films are used for reinforcing levees, which year after year proves to be of high importance, as well as for protecting groundwater from industrial pollution. Now we concentrate on the work on barrier laminates for sliced meat packaging. As you can see, our consistent policy and hard work have brought us to the point where the ERGIS Group is widely recognized and our products enjoy a strong market position.
Who and where are your clients? How do you reach them?
Tadeusz Nowicki: Due to the universal nature and wide range of our products, we are present in almost every branch of industry, and the number of our clients is increasing constantly. We sell to smaller companies and retailers as well as to the greatest sales networks in Europe. Our films fulfill the needs of civil engineering, food and industry packaging, pharmacy and many other industries. Currently one of the most important points we focus on is the expansion of export sales. Our sales network in Europe is being reinforced, and the share of export in the total sales continues to grow, exceeding 50% of our production.
Did the euro debt crisis have an impact on your company?
Tadeusz Nowicki: It goes without saying that all European companies have been experiencing severe economic turbulences. Therefore, it fills me with pride that, despite the obstacles and uneasy times, our Group has managed to strengthen its market position and expand the product range. Quarter after quarter we are pleased to announce increasing sales and improvement in operating results. We suffered from a temporary reduction of profitability in 2010 and 2012, but it was a direct consequence of placing new products on the markets. In December 2013 the investment of DBG Eastern Europe II LP in the parent company of the Group, Ergis-Eurofilms S.A., was terminated, and I could increase simultaneously my personal investment in the company and the free float on the public market. The income of the Group in 2013 exceeded 150 million EUR. Earlier this month, for the first time, we announced the payment of dividend to the shareholders. And slowing down is not our intention!
What is your personal view on the current economic policy in Europe?
Tadeusz Nowicki: As mentioned before ERGIS and I, as a person, are very sensitive to ecological questions. We have to, however, bear in mind that human activity has to take precedence over bureaucratic measures. Personally, I have doubts whether the way REACH and other, similar initiatives are implemented does not hurt European competitiveness in a way which is not counterbalanced by environmental benefits. Working partially in Poland, with companies that are often newcomers in some of the European markets, I regret that national protectionist measures are still strong and are even being strengthened. I am referring to national product certifications and especially the limitation in workforce and services circulation.
Sustainability – only a slogan or a reality for you?
Tadeusz Nowicki: It’s not a slogan. Actually, I believe the principle of sustainable development is one of the crucial ideas we should all bear in mind. Being entrepreneurs, it is our duty to ensure that the accomplishments of business are reached not only in accordance with the law, but also in harmony with the natural environment. It is we who take the special responsibility for the quality of life of our children and the next generations. Thus, contrary to popular belief, let me once more emphasize that plastics is our opportunity, not disaster. The increase in the human population entails increased demand for food, shelter, energy, water, and this is where plastics articles play a particular role in improving the quality of life and helping to use natural resources in a reasonable way. Let me provide just a few examples. If it weren’t for plastics, the weight of packaging of goods would quadruple, which would obviously entail a rise in production costs and energy use. The amount of waste would also be incomparably greater. Moreover, thanks to the use of plastics, we are able to considerably limit the amount of gas for our households and cars, which consequently influences carbon dioxide emission positively. The majority of plastic products are manufactured with the use of less energy than other materials, especially in applications such as transport, building and construction, packaging, and electronic devices. The food industry also takes full advantage of plastics, as this type of packaging reduces food waste and extends shelf life. As I already mentioned, our hydro insulating films enable the protection of groundwater. As you can see, promoting plastics as eco-friendly materials is an absolutely justified notion, especially due to its enormous possibilities of recycling, and even multiple processing possibilities. And it is recycling that we all should turn our minds to. Increasing awareness of legislators as well as our local communities is the key to making the most of plastic goods. This was one of the most widely discussed topics at the conference held on 22 June in Warsaw, where we, as members of the Polish Association of Plastics Converters, disputed over the future of our industry.
Where do you see your company in one year?
Tadeusz Nowicki: As the time scale in your question is short, my answer will be as well: To increase our EBITDA by 15% thanks to our recent developments. This answer is not to be understood as a forecast in the sense of stock market legislation but my personal target.