A fresh sustainability focus and innovative new product development is driving growth for Gateshead-based packaging supplier, iPac, supported by a £200,000 capital investment grant from The Growth Fund, part-funded by the European Regional Development Fund (ERDF).
An essential component of fresh food packaging, plastic has been under the microscope recently as attention intensifies on waste pollution.
In a bid to significantly reduce the plastic content of their products and win over consumers, some manufacturers have created mixed material products such as laminated card products. But this does more harm than good, explains iPac’s Managing Director Jonny Catto.
Established four years ago, family-owned business iPac wanted to address the demand for reduced plastic content of its existing thermoformed food tray products, while maintaining its minimum 85% recycled material input and 100% recyclable output.
“The issue with many of these products is you take a fully recyclable plastic tray and replace it with a mixed material tray, which is very difficult to recycle,” Jonny says.
“We are firmly of the opinion that the most sustainable packaging for food products is recycled plastic. As long as you’re getting a good proportion of recycled content into it – ours is over 85% – and the packaging is also easy to recycle then that, for us, is the way forward.”
In creating the new iCard product, Jonny believes the company has got the best of both solutions. It is a thinner plastic tray supported by a cardboard surround, which easily separates to be recycled. The packaging does not use any laminates or adhesives that would make this difficult or contaminate the recycling process.
Newcastle-based chartered accountancy and business advisory firm UNW signposted iPac to The Growth Fund to help the company with its ambitious project, which required new machinery, tooling, ancillary equipment, staffing and a fully integrated Enterprise Resource Planning (ERP) system to address the added complexity of the product and start full-scale production.
The thermoforming machinery can be used to provide extra capacity for the company’s existing products and is specified to accept drop-in robot handling to automate the iCard assembly process. With the added capability of managing the artwork control for different clients or different products, the ERP system also broadens the company’s opportunities for future innovative products.
Costing £713,000, Jonny explains that the £200,000 funding from the Growth Fund made the project possible.
“Because it’s a new project, it’s quite innovative and different for us, and there’s an element of risk with it. I don’t think we would have quite had the confidence to push the button on this without having that risk mitigated,” the Managing Director says.
With previous grant application experience and a finance background, Jonny was well-placed to navigate the process.
“The team there were very supportive in giving guidance and pointers along the way,” he adds.
The project is already making a difference to the company’s growth and future prospects, developing its market position. In partnering with a card supplier that is well-established in the food industry, new opportunities have arisen related to the iCard product.
While iPac is waiting for supply chain issues in the cardboard sector to settle before producing the iCard, the flexibility that the project has added has been a real benefit.
“It’s pushing us to backfill that capacity with other work and allowed us to grow in other areas,” Jonny says. “Although the start of the iCard production might be slightly delayed, the associated growth and job creation isn’t, so that’s been a benefit to the whole business.”
The project is creating at least 22 new full-time jobs, with the majority of these being production, as well as some support roles.
Jonny adds: “The project has been really positive for our general growth and product offering, adding another string to our bow as a packaging company. It adds products to our portfolio outside of the standard packaging and customers like to see that, so there are naturally spin-off opportunities.”
With its focus on sustainability, the company is well-placed to respond to a rapidly changing industry and is working to educate consumers about recycling trays, and to influence councils to adopt uniform recycling rules, so more can be captured and re-used in manufacturing.
Jonny concludes: “We’re a young company at four years old and this project is all part of an exciting growth journey. We’re now supplying about 350m trays a year into the food sector and looking to grow that to increase our market share.”
The Growth Fund Senior Project Manager, Mike Baker, said: “iPac’s innovative solutions that respond to changing needs are a great example of the kind of project that we are looking to support. I would encourage any company with an ambition to grow through a capital investment project to get in touch.”
Councillor Malcolm Brain, Cabinet Member for Economy at Gateshead Council, said: “We are committed to supporting businesses across the borough to expand and thrive. The Growth Fund plays an important role in fulfilling that, enabling us to assist ambitious local businesses like iPac to realise their potential and create new jobs for local people, and ultimately increasing wealth in the local economy.”