David Dostal, the company’s CEO and chairman of the board, talks about Papcel’s growth and its future in the pulp and paper industry.
Czech company Papcel has been making its mark as an all-round technology supplier to the global pulp and paper industry since its formation in 1950. It prides itself on being able to supply complete turnkey projects from design to startup and everything in between, including chemical equipment and full automation. It also provides an across-the-board service dedicated to used papermaking machinery including rebuilds, refurbishment, and relocation anywhere across the globe.
The company has been very active over the years on the acquisition front, and counts well-known industry trademarks GapCon Tissue (now ICONé) and PMT as part of its technology portfolio. Paper360° sat down with David Dostal, CEO and chairman of the board, Papcel, to talk about where the company is, and where it is going.
How do you see the future health of the pulp and paper industry—and where does Papcel fit into your vision of the future?
Dostal: The current development of demand tells us that customers are interested in rebuilds for their mills. During the last four months we have noticed an increase in inquiries for paper machines making both packaging materials and special papers. These inquiries are focused on investments requiring sophisticated technological solutions.
I feel optimistic in regard to the papermaking industry’s future. Above all, the current trend of packaging paper and tissue makers’ interest is an indication for me that demand for new investments is increasing. For Papcel, the development of sales in China, India, and South-East Asia is substantial. We are also developing our co-operation with major papermaking groups operating mills in Western and Eastern Europe. The interest in our technologies shown by the major groups is important for us.
We feel our future is also in working with customers in backward integration projects—for example, existing paper converters establishing their own papermaking. In tissue making, we believe there will be a lot of new projects for both new machines and rebuilds coming in the future.
Can you give us a brief history of where Papcel came from and where it is now, including a timeline of your acquisitions?
Papcel has been active in the papermaking industry since 1950. In the 1990s, our main downstream markets were mainly domestic and in Slovakia. In 2009, the company started exporting to the Eastern- and Western-European markets. Above all, the Russian market was then one of the predominating export territories. One of the major projects of that period was the delivery of a new decor paper machine for the Russian-German conglomerate Felix-Schöller.
The first Papcel acquisition was the purchase of the Erma Elan Engineering design office. In 2011-2012, Papcel bought the complete drawings and the trademark of the Spanish Gorostidi and acquired the Czech company IFM Olšany, thus extending the production program to starch and chemical dosing systems. Within the following four years we succeeded in acquiring significant manufacturers of papermaking machinery suppliers including Italian GapCon Tissue S.r.l. (now ICONé) and PMT S.r.l. Due to all those steps we now have a very strong conglomerate able to offer final customers complete solutions for all the common paper grades.
The acquisitions over the years have obviously resulted in growth for the company. Can you also tell us about the health of Papcel’s organic growth?
During the last five years Papcel has achieved really excellent financial and technical success. Our group yearly turnover exceeds 1.5 billion CZK (US$685 million). Due to our acquisitions we have vastly extended the services we offer, and we carry out projects for major papermaking groups operating high-speed paper machines of large working widths. As well as in the packaging and paper grades segment, we are also one of the most important and significant tissue market players. Our patented technological know-how provides our customers with considerable operational savings, which come in the shape of energy and raw material costs as well as substantially contributing to improving quality features of manufactured paper.
Can you give us an idea or the range of offerings Papcel can supply to the pulp and paper industry?
Nowadays, the group offers a complete machinery portfolio for manufacturing packaging paper grades, specialties, P&W, safety papers, and tissue grades. We offer technologies for coated/uncoated boards. We are turnkey suppliers of complete papermaking machinery. Our paper machines are equipped with systems for preparation, storage, and dosing of starch and chemicals. All the machines are delivered together with complete stock preparation lines and approach flow systems.
We have carried out more than 1,000 rebuilds; we have built a completely new paper mill, including structures and a boiler house; and we have accomplished more than 25 greenfield projects. We offer headboxes of modern concepts, top formers, and we have several references of press part rebuilds using shoe presses. Our production program includes complete drying, coating, and sizing systems, surface or stock dosing starch (film presses), and calendering paper. Besides reelers and winders, we are able to offer and deliver wrapping machines and systems for transport of finished rolls to loading bays.
We also carry out projects of moving sold, used machinery and refurbishment. We are not limited in terms of the used machinery locations, and if the customers require, we will manage dismantling, moving, and complete refurbishment of used machinery.
Which of your product areas are experiencing the most interest from the pulp and paper industry and which ones are showing the most growth?
The demand for paper machine wet ends now creates key work we are focused on. The supply of our products—for instance, high-speed headboxes, shoe presses, and suction rolls—is growing. The rise is indicated by growing sales and increased rebuilds of reelers and winders. Besides the machinery for conventional paper grades, we can deliver complete turnkey tissue machines.
Actually, the tissue segment is going to be key for us in the future. We have a unique concept of the EconPRESS NExTTM shoe press working now very successfully, for example, in the Argentinian mill Papelera Samseng. Compared with the original machine in a conventional configuration, within the first three months of operation, significant vacuum and refining energy reductions were achieved. The new concept is fully functioning and it is suitable for all customers considering rebuilds of their tissue machines.
Which regions of the world are most important for PAPCEL, and for what product groups?
We deliver worldwide. The most promising regions are Arab countries, Northern Africa, Central Asia, India, and Southeast Asia. In the last year we expanded the number of our service and trading centers in the US, and the Latin American market is becoming more and more important to us. And, of course, not to forget the markets of Russia and the Russian-speaking countries.
As I have already mentioned, our technologies are offered for all the available paper grades. In terms of the purely papermaking industry, we indicate the highest demand increase in the field of packaging materials. It is about rebuilds of higher speed machines and we are noticing that customers are interested above all in improving their production quality and in increasing production. In China, for instance, we are now working on several interesting projects of rebuilding headbox units, modifications of wire tables, and press parts.
What’s next for Papcel? Any other acquisitions on the horizon? Any plans for expanding into other markets?
Now our efforts will be concentrated above all on using opportunities connected with acquisitions carried out within the last three years. Having acquired companies like PMT S.r.l. or ICONé we are now able to take part in tenders where we can offer the best state-of-the-art machinery available on the market.
PMT S.r.l. (Italy) centrally manages our manufacturing factories in Cuneo (ex Comecart) and Pinerolo. We are also concentrating on our new projects in India, where our commercial agency has been active for more than 10 years. Our further priorities are increasing exports to China and developing business generally in Asia and of course Eastern-European markets, particularly Russia. We are aiming maximum effort at new tissue projects because one of our real strengths is our tissue technology, which helps customers improve their efficiencies and cut costs.
In 2016—2017, the total company investment value reached 14 million EUR (US$16.38 million). Due to this investment we obtained modern manufacturing equipment enabling us to make components for high performance and large width papermaking machinery. All of those will now be utilized.
Satisfying our customers is our most substantial target. We respect our customers’ requirements and always try to offer them the best solutions. For our business partners we are a guarantee of machinery deliveries; our team can offer complete technical services and consultancy needed by customers considering where and how to invest their money. We are happy that the portfolio of our customers is growing and that the customers we co-operated with in the past are coming back. As for new investments or plans, we are always ready to pursue with maximum attention to give our customers the best aid advancing their business and activities further on, in terms of savings and top technology.