Koehler Group publishes figures for 2020 financial year

Koehler Group makes investment of EUR 91 million during crisis year

Koehler Group headquarters, Oberkirch. Photo: Koehler Group

Koehler Group’s business performance for the financial year 2020 was affected by the worldwide impact of the Covid-19 pandemic. Despite the difficult circumstances, the Group managed to perform relatively well in its market and maintained its competitive edge. In the 2020 financial year, Koehler Group’s revenue fell by 11.7% to EUR 769 million (approximately Rs 6,768 crore). The operating result of EUR 66 million (approximately Rs 580 crore) is significantly lower than the previous year’s figure and therefore significantly below target. Koehler employs almost 2,500 people worldwide.

Total sales for German paper industry fall by 2.6%

As a global company, Koehler is largely dependent on regional as well as global economic conditions. The global economic slump during 2020 represented the worst recession since the global economic crisis around 90 years ago. According to statistics from The German Pulp and Paper Association (Verband Deutscher Papierfabriken e.V.—VDP), total sales for the sector fell by 2.6% in 2020 compared to the previous year. Total production for the paper industry from January to December 2020 is 3.3% below the previous year’s figure at 21.3 million tonnes. The German paper industry exports the majority of its products to other countries, both in and outside of Europe, and is therefore subject to global economic and trade policy conditions. Domestic sales (within Germany) decreased by 2.9% in 2020 compared to the previous year, while international sales fell by 2.3%.

Koehler invests more than EUR 91 million during 2020

Koehler Paper saw its sales volume fall by 1.5%, with the decrease essentially due to the decline caused by the Covid-19 pandemic. Koehler Group’s equity grew by EUR 29 million (approximately Rs 255 crore) to EUR 590 million (approximately Rs 5,193 crore) during the previous financial year. The equity ratio, therefore, equals 57.2%, with a decrease in the balance sheet total, and has clearly exceeded the long-term objective of more than 40%.

Kai M. Furler, chief executive officer of the Koehler Group, on the results of the financial year, “The previous year was not a good year for Koehler. Our export quota is 70%, which means that we are heavily influenced by global changes. This is something we have felt keenly during the Coronavirus pandemic.” Above all, the restricted availability of raw materials on the world market and insufficient transport capacities have represented a challenge for the company since the end of last year. “Having prepared for this situation, we have so far survived the Coronavirus crisis with only minor damage,” continues Furler.

Despite the adverse conditions, the Koehler Group invested a total of EUR 91 million (approximately Rs 800 crore) during the previous year. The investments were primarily made in the new PL 8 paper and coating machine, in external installations and buildings, and in the biomass cogeneration plant at Dollbergen, Germany.

Previous financial year affected by entry into new business segment

With the construction of a new paper and coating machine, Koehler entered the flexible packaging papers market in 2020. The PM 8 is currently the most modern paper machine on the flexible packaging papers market, thus giving Koehler a competitive advantage.

In the current phase, the focus is on sales activities and on convincing food manufacturers and brand owners that paper can, in most cases, be easily replaced without the need for major investment. Consumer demand not only for sustainable products but also for sustainable packaging has grown exponentially in recent years. Most manufacturers are therefore being forced to move away from existing plastic packaging and use sustainable solutions instead. Branded companies such as Ritter Sport and Südzucker are already using flexible packaging paper from Koehler.

Positive outlook for the current financial year 2021

After a difficult year in 2020, the Group is looking forward with confidence to 2021. Koehler Paper is planning for a significant revenue boost in 2021 compared to the previous year, for all divisions apart from thermal paper and fine paper. Further growth is also expected in the renewable energy business field. The acquisition of the Zollikofer Group in April 2021 will mean a significant increase in revenue and, in turn, in the operative result. Further acquisitions are planned in renewable energies such as biomass, wind, hydro and solar energy. In line with this, there are also plans to commission five further wind parks, two more biomass plants, and four photovoltaic plants in the medium term.

The Koehler Group was founded in 1807 and has been family-run from that moment to the present day. The group’s core business activity lies in the development and production of high-quality specialty paper. This includes—among others—thermal paper, playing card board, drinks coasters, fine paper, carbonless paper, recycled paper, decor paper, wood pulp board, sublimation paper, and also innovative specialty paper for the packaging industry since 2019. In Germany, the Koehler Group employs 2,500 people across five production sites, with three additional sites in the USA. The group has international operations, with exports of over 70% in 2020 and annual revenue of EUR 770 million (approximately Rs 6,777 crore).

As an energy-intensive company, Koehler invests in renewable energy projects such as wind energy, hydropower, photovoltaics, and biomass. The Koehler Group has set itself the goal of producing more energy from renewable sources than it needs for its paper production operations by 2030.

2023 promises an interesting ride for print in India

Indian Printer and Publisher founded in 1979 is the oldest B2B trade publication in the multi-platform and multi-channel IPPGroup. While the print and packaging industries have been resilient in the past 33 months since the pandemic lockdown of 25 March 2020, the commercial printing and newspaper industries have yet to recover their pre-Covid trajectory.

The fragmented commercial printing industry faces substantial challenges as does the newspaper industry. While digital short-run printing and the signage industry seem to be recovering a bit faster, ultimately their growth will also be moderated by the progress of the overall economy. On the other hand book printing exports are doing well but they too face several supply-chain and logistics challenges.

The price of publication papers including newsprint has been high in the past year while availability is diminished by several mills shutting down their publication paper and newsprint machines in the past four years. Indian paper mills are also exporting many types of paper and have raised prices for Indian printers. To some extent, this has helped in the recovery of the digital printing industry with its on-demand short-run and low-wastage paradigm.

Ultimately digital print and other digital channels will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future. For instance, there is no alternative to a rise in textbook consumption but this segment will only reach normality in the next financial year beginning on 1 April 2023.

Thus while the new normal is a moving target and many commercial printers look to diversification, we believe that our target audiences may shift and change. Like them, we will also have to adapt with agility to keep up with their business and technical information needs.

Our 2023 media kit is ready, and it is the right time to take stock and reconnect with your potential markets and customers. Print is the glue for the growth of liberal education, new industry, and an emerging economy. We seek your participation in what promises to be an interesting ride.

– Naresh Khanna

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