Zotefoams plc (LON:ZTF) Group Chief Executive Officer David Stirling caught up with DirectorsTalk to discuss the acquisition of Refour, how it fits in the business, being able to offer a wide choice of recycling packaging, what Torben Anderson brings to the business and what investors can expect in the next 6-12 months.
Q1: David, first off, congratulations on the acquisition of the assets and the intellectual property of Refour. Could you just tell us what’s actually been acquired?
A1: So, Refour is a company based in Denmark, which was looking to develop mono-material packaging technology, similar path and intent to our resource application development within the Zotefoams platform. So, what we’re acquiring is a very experienced individual who’s been developing this, Torben Anderson, who’s the former CEO of Refour, and also assets which will allow us to widen and accelerate our portfolio development, including extrusion equipment, machinery for forming and filling packaging etc.
Q2: Could you talk us through the rationale of the transaction and how it all fit with the rest of the business?
A2: So, the company owns a business called MuCell Extrusion, it’s a small business at the moment, but has some really great technology focused on improving sustainability in the packaging market for mainly food and beverage packaging. The Refour technology is similar in intent to what we are looking at, using common polymers in a very effective way to develop packaging, which is circular and can be used recycled, and the packaging itself can use recycled content.
So, really it is very complimentary and the Refour development had been looking at areas that hadn’t really been our core focus up to this point so it’s very complimentary.
Q3: Could you just explain for us how combining the company’s portfolios will offer a wide choice of recyclable packaging?
A3: Well, first and foremost, the Zotefoams development had been focused on high density polyethylene, and less so on polypropylene, where Refour have much more knowhow.
We’d also been focusing on making this using different extrusion equipment than Refour and putting those both together allow us to access markets like pouch packaging for food and beverage much more quickly than we had originally planned.
Q4: Now, you mentioned Torben Anderson earlier and I see that is joining Zotefoams. What will he bring to the combined business?
A4: Torben has a huge experience in packaging development and design over many, many years, and that intimate design knowhow along with industry knowledge is something particularly in the European market that is very helpful to us.
Q5: Finally, what can investors expect from this side of the business in the next 6-12 months?
A5: Well, in that timeframe, first and foremost, we are looking to scale up our pilot trials of various packaging formats. The most exciting and probably the closest is in the development of carton technology, so the square carton packs that you’ll get for juice, milks, etc. That’s something where we are very close to large scale trials at pre-commercial level and as time goes on, we are focusing on other formats as well.
So, it’s very much watch the space, with all of these things, every trial you do takes you closer to the goal, but it is a development process and timelines are still a bit uncertain, but we’ve got a high degree of confidence that we’re getting there.
