In the past 2021 financial year, Model Holding AG increased its business sales from CHF 859 million to CHF 1.07 billion. This corresponds to growth of 25 per cent and is partly due to the higher average price of corrugated and solid board packaging. However, a higher production volume also had a positive impact on the Group's figures.
Highlights of the year were the Takeover of the paper mill from Stora Enso in Eilenburg, Saxony, with the subsequent change of name to Model Sachsen Papier GmbH and the commissioning of the corrugated board machine in Nowa Sol, the third in Poland.
The Model group produced almost 1.6 billion m2 of corrugated cardboard packaging and corrugated cardboard sheets at its 16 production sites in Switzerland, Germany, Poland, the Czech Republic and Croatia, which corresponds to a production volume of Growth of more than 5 per cent and 408,000 tonnes of packaging paper for corrugated cardboard production. Due to a serious cable duct fire in Weinfelden, the previous year's volume was only just achieved.
Effects of high demand for paper
The high demand for corrugated cardboard packaging was overtaxing the upstream paper production, as it was already producing 24 hours a day, 7 days a week. One Expansion of production volume is not feasible in the short term, which is why prices are reacting at an above-average rate. The rapid rise in paper prices could and still can only be passed on to packaging prices with a considerable time lag. As Model only produces half of its own paper requirements and the main raw material, waste paper, and the cost factor of energy have also risen significantly, this has resulted in a price increase that is above average despite successful sales. Decline in profit margin.
A look into the future
Model anticipates that the general success of Corrugated cardboard as the preferred and sustainable packaging material in conjunction with its quality and productivity strategy will also lead to an increase in sales in the current year. For 2022, the company expects investments totalling more than CHF 200 million, of which the first Conversion of the paper mill in Eilenburg from graphic papers to packaging papers make up the lion's share. In addition, the focus is being placed on automation projects, as the increase in absences, mainly due to quarantine rules, is increasing their profitability. The home office trend promoted by politicians has also reduced the productivity of administrative tasks and at the same time increased cyber risks; this will fuel digitalisation, especially in the area of artificial intelligence.
Source: Model Holding AG
