Unfazed by hard times, Fedrigoni plans digital and environmental expansion

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Fedrigoni's new sales director for the UK and Ireland, Fred Haines, has had an interesting and varied career in the paper industry to date. His CV includes stints at Bowater, Stora Enso, UPM, International Paper and PaperCo to name just a few. He has plenty of stories to tell from both sides of the fence, merchanting and manufacturing. While none are quite as memorable as the time he stripped naked for a charity calendar at Howard Smith Paper, his fondness for the industry is obvious.

All this experience stands him in good stead for working at the Italian paper group. In the UK, Fedrigoni has a 50-50 focus on merchanting and manufacturing and so it is well aligned with his passion and experience. Haines joined on 1 September 2008 from Premier Paper, where he was managing director. He left the merchant when it was acquired by Beswick Paper last year, and although the acquisition caused something of a backlash from some in the industry, Haines says his departure was amicable.

The UK division of the family-run Fedrigoni Group currently has 23 staff and a £10m turnover. Markets include specialist coated, greetings cards, board, text and cover, self-adhesive, packaging, digital and environmentally friendly paper and boards. Last year, the UK arm grew by 12% at a time when the market as a whole contracted by around 10%. The growth was largely driven by the company’s presence in the digital papers market. Additionally, it has also been helped by opportunities that arose on the back of other mills’ problems and closures.

With that in mind, it is hardly surprising that Haines is bullish about the current trading conditions. In difficult times, there are opportunities and there is always a place for speciality papers, he says. There are areas of growth that can be found. A key area for us is to continue to expand in the digital papers market. It’s a good area to be in.

The company grew by 25% in the digital paper sector in the UK last year, and Haines doesn’t expect an end to the rapid growth over the next few months. He says the recession could even be of help to the sector, with the need for shorter runs and better targeted mailing. It’s definitely the way some companies want to go, he says.

Social responsibilities
The company is also growing in the environmental sector, and Haines reports increasing demand for these grades. Environmentally friendly products will continue to be high on the agenda for customers, he says. End clients are becoming increasingly aware of their corporate environmental and social responsibilities. Currently, more than 65% of Fedrigoni’s papers are FSC Chain of Custody certified, a figure it is hoping to grow further.

However, it’s not all rosy. Undoubtedly, 2009 will be a tough year and demand is a key challenge, with every company’s marketing budget under scrutiny. Haines warns that customers should choose carefully as market consolidation means that choice is limited. The paper market should also expect a further round of price increases in February. A lot depends on currency fluctuations, which are a huge concern, he says. If the pound continues to weaken, price increases will be inevitable.

The biggest challenge is remaining competitive with the exchange rate. Even as a speciality producer, the returns from the UK market are very poor. Yet the UK remains a strategic market for us so we will have to balance short-term pain with our long-term plans.

Despite the challenges, Haines has set his sights on continued growth. Fedrigoni is launching a new product in March and it has also expanded its team, recruiting a number of paper consultants to promote its grades to designers, end-users and printers. This is not a new innovation, of course, but our competitors have been downsizing their teams.

You would not bet against Haines achieving continued growth. He has a deep knowledge of the sector and knows that companies need to sell products that are creative and innovative, especially in tough times.

It’s all about providing specialisation and differentiation for clients in order for them to stand out with their customers, he says. We are hopeful of raising our profile this year. Those that have a breadth of product range, from specialist to creative grades, will survive.

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Fedrigoni factfile
Sales director UK and Ireland Fred Haines
UK headquarters Northampton
Staff 23
Turnover £10m
Group turnover 625m euros (£560m) in 2008
Staff 2,000
Markets specialist coated, greetings cards, board, text and cover, self adhesive, packaging, digital and environmentally friendly paper and boards