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APAC

Core revenue

€691

 m

LFL growth at constant currency

+8.2

 %

Introduction

Asia Pacific has long been a strategic focus for SIG and we now have three sleeves production plants and a Tech Centre in the region. Strong market fundamentals include growing populations, rising disposable incomes, urbanisation, a focus on convenience and – increasingly – health and sustainability awareness.

2021 overview

The APAC region showed solid growth in 2021 despite the ongoing effects of COVID‑19 in a number of South-East Asian countries. Although many of the products we sell in the region are for on-the-go consumption which has been affected by the pandemic, we were able to achieve growth through the efficiency and flexibility of our system, our focus on innovation and the sustainability of our packs.

In China, the economy continued to recover steadily. An increasing interest in healthy nutrition, which was only intensified by the pandemic, led to strong demand for white milk.

Performance highlights

Our new plant in China was operational from the end of 2020 and will enable us to meet the long-term growth in demand forecast for the region (see Expanding our global presence).

In China we were able to win new liquid dairy customers including Yeo’s, Shanhua, Yiming and Prairie New Herdsman Farming. We were also able to increase our share of wallet with existing customers and our business with co-packers expanded. Chinese consumers’ interest in healthy nutrition is starting to drive demand for plant-based milks and we signed contracts for plant-based milks with Huangshi in combismile and with Yeo’s.

It is now four years since we launched combismile in China but the growth momentum continues, with a 26% volume increase year on year.

We saw a record number of filling machines contracted or deployed in 2021, including 12 new lines with Mengniu and two combismile filling machines with Yili. We also undertook projects with a number of regional customers.

In Asia Pacific South, there has been some polarisation in the market, with the impact of the pandemic on purchasing power increasing the focus on value-oriented products. On the other hand, health awareness is favouring premium products with high quality and innovative ingredients.

“SIG’s filling technology makes it possible for us to also fill beverages with pieces in carton packs and easily make product and volume changes. ”

Hideki Kasai

President of Cosmo Foods

We saw new filling machines ramping up in a number of countries including Korea, Thailand, Indonesia, Malaysia, Vietnam and India. combismile is making good progress and combismile filling machines have been installed with Nestlé in Vietnam, Daesang in Korea and Amul in India. In addition, our joint venture with DNP in Japan has signed a contract for a combismile filling machine with co-packer Cosmo Foods. With integrated drinksplus technology, Cosmo Foods will be able to develop and fill a broad range of exciting new product concepts containing real pieces of fruit or vegetables. And the choice of combismile was not just driven by the carton’s attractive design:

Hideki Kasai, President of Cosmo Foods: “The new combismile filling line will be sited at our plant in Komono. Cosmo Foods currently offers co-packing of beverages in plastic packaging, but we have decided to add carton packs to our portfolio because of their excellent environmental profile. SIG’s filling technology makes it possible for us to also fill beverages with pieces in carton packs and easily make product and volume changes. With this new system, we will give brand owners the opportunity to offer products with high added value.”

Sustainabilty concerns are increasingly influencing customer choices in Asia Pacific. Dairy Farming Promotion Organization of Thailand (DPO) has introduced a new “National Milk” product range in SIG’s on-the-go combiblocXSlim carton packs with SIGNATURE Full Barrier packaging material. DPO launched the new products under the slogan “Love Us, Save the World”.

Digitalisation is also growing in importance in the region. SIG’s “One Cap, One Code” solution – available for SIG’s closure combiGo – enables customers to apply QR codes which are not only visible on the package but can also be hidden on the inside of the closure. This ensures that the QR code can only be scanned after the product has been purchased and opened by the consumer. Nestlé became the first company in Vietnam to opt for this closure solution for its popular Nestlé Milo Teen Protein drinks.

We have seen an increase in demand for family-size packs due to extended lockdowns in a number of South-East Asian countries where more consumers are working from home. Family-size format filling machines now operate at the sites of customers such as Yeo’s in Malaysia and PTUJ and Diamond in Indonesia, to name just a few.

Looking ahead

Our presence in family-size packs will be further expanded by the planned acquisition of Evergreen Asia’s fresh milk carton business, announced in January. This acquisition will enable us to serve the growing demand for fresh milk in China and to leverage our innovation in this segment. There is considerable technology overlap with our core aseptic business and the acquisition is expected to generate attractive synergies. It will enable us to increase our share of wallet with existing customers and to access new customers.