By: Jim Johnson
November 18, 2013
CHICAGO ‒ Plastics packaging maker Farmamak is used to being in the middle.
Not only is the firm situated in Turkey, a country that’s part of two continents. But the company also makes a living by putting itself between behemoths on either side of its business – raw material suppliers on one side and food companies on the other.
“As a middleman between the customers and the raw material producers, we need to understand both sides and make sure we find out solutions to make sure we can connect those two together,” Kurt Kuruc, Farmamak general manager, said at the recent Global Plastics Summit in Chicago.
With raw material costs accounting for 65-70 percent of the company’s costs, Farmamak is always looking to make improvements in its packaging offerings to save money or add value.
The company also has found that it doesn’t have to be the very first ones in the market using the very latest technologies. But that doesn’t mean the company is sitting on its hands, either.
“These days, it seems to enter a market late has an advantage because you can invest in new technology, which comes slightly cheaper. And with that new technology, you can produce high quality material and also more efficiently. This is what we have realized in Turkey in the last 15-20 years,” he said.
Waiting for things to settle out when it comes to new technology also allows the company to continually keep up with changes that allow it to remain competitive in a very competitive field, he said.
“So we’re lucky because we entered the packaging market as a country very late. But when we entered, we entered the market with new technology, which enabled us to be able serve one of the toughest markets in the world, the European market,” Kuruc said.
Farmamak, a unit of food and beverage company Yildiz Holding, has been able to take those experiences learned by selling into Europe and apply them to developing markets.
“Selling into Europe is a difficult task because there are a lot of standards and environmental concerns,” Kuruc said “Thus, you can learned a lot from that geography. And when you go to the east or north or south, there are newly developing markets, so you can really apply what you have learned from Europe, one of the most difficult markets, into these newly developing geographies.”
Despite the fact that the packaging industry faces the squeeze from both raw materials suppliers and customers, companies have found a way to succeed in recent years by adding value to their offerings, he said.
Kuruc, during his presentation, pointed to changes in different types of food packaging that lessened weight, added dust resistance and improved packaging clarity through an anti-fog surface treatment as examples of adding value.
“Different products are trying to find new ways to protect their positions in the market. And it looks like this is going to be a never-ending story,” he said.
Farmamak also is not married to one particular type of plastic in its packaging offerings, so having that flexibility allows the company to develop products for customers without a built-in bias toward one material or another.
“We have an objective position when we are marketing our products,” Kuruc said. “And having an objective position when you are marketing is very important. Because then you are in a position to understand your customer. And you don’t simply force your products into them.”
“You try to understand and make sure you find correct material in your portfolio to serve them properly,” he said.