The name Ecolean can imply an inclination towards being eco-friendly [writer’s interpretation], and it turns out the be true that this Swedish company’s products are indeed friendly to nature, mainly in the sense, as described by their representative for Southeast Asia, Mr Paul Mellbin, that they consume less material.
“This is our answer to the environmental concern; by using less material we are less harmful and which is something that is true wherever you go. Our approach is quite simple – we do the lightest possible packaging, and using less material is always better,” responds Paul at their new regional headquarters in Kuala Lumpur (opened in 2015).
“It may sound a bit pompous but we prefer to do this in the right way – which is to use less. Less also means less material, less energy and less in your waste basket both physically, visibly and to be handled.”
All packages are really a system in the sense that it includes the empty package, how it’s printed, the filling machine, the filling operation.
“It’s a long chain, and from an environmental point of view you have to look at that from a cradle-to-grave perspective,” explains Paul.
Ecolean is in the business of developing and manufacturing innovative packaging systems for the dairy and liquid food industry and innovation is at the forefront of its business, within a quite conservative sector and with relatively long cycles.
“We are the innovation,” says the Swede when the topic comes up.
Not much else has emerged since the carton box was launched in the 1960’s from the other Swedish player, the leader in this sector – until Ecolean (founded in 1996) came up with its innovative packages solutions. Only the bottle is a realistic alternative in some segments.
So gradually, thanks to this Swedish company, the packaging of beverages on the market in Southeast Asia is going to change.
Ecolean’s package is lightweight, based on the multi-layer film structure used in the brand’s Air Aseptic packages, which is suitable for low and high acid liquid food products.
They replace part of the plastic with mineral filler, based on calcium carbonate (chalk), and thereby use less plastic. It is this innovation that enables a low environmental impact. They also supply the filling machines.
This flexible packaging also features an air-filled handle for greater convenience and an easy-to-open design. The pack is also microwaveable and can be accompanied by an optional straw.
One of their packages is the Air Aseptic Clear, about which Paul comments: “This transparent one is something absolutely new – you have not seen anything like it for sure. There has been a demand from the market for many years to have a transparent and aseptic packaging and we are first being able to offer this.”
“One side of the innovation is to look different on the shelves. That is one key point. Our products offer the market something new and there aren’t that many alternatives when it comes to this type of safety aseptic packaging fulfilling very high requirements; you normally see square cartons from only one or two suppliers.”
“We also have a package that withstands transportation well, is not sensitive to water and can be sold even from buckets with ice. The fact that its environmental profile is also better than established packages is of course a plus.”
Coming back to the topic of waste, an independent study found that traditional cartons lead to food waste levels of around 10%, while packaging from Ecolean resulted in food waste levels of around 1.5-2%, as the container can be manipulated and squeezed to force out more product.
“The real business decision however relies on how it works; in distribution and consumers’ eyes, and of course market shares – or markets that you cannot reach at all today.”
The mainstream products are milk-based products, products similar to milk (like soy based products, rice-based, and cereal products) and beverages such as juices, still drinks, ice teas, ready-to drink coffees etc.
In order to meet the markets’ opportunities in the Asean countries, Ecolean opened a regional headquarters in Kuala Lumpur, Malaysia, from which Paul Mellbin is spearheading the company’s market entry as well as further strengthening their presence in Asia.
“All the markets in this region are exceptional and offer a huge potential for innovative packages such as Ecolean’s. Producers and consumers all over the region are turning their attention to solutions, such as ours, that offers that rare combination of attractiveness, convenience and food safety,” says Paul.
The demand for such packaging solutions is strong in the liquid food industry in Southeast Asia. Ecolean made further investment into increased production capacity in Tianjin, China, which enables their expansion in catering to food producers in the region.
“Previously our China factory was running on full capacity. Having more than doubled, it can now supply also the Asean region.”
Ecolean has been growing its business with double digit figures every year; between 30 – 50 per cent annually. So it is part of their challenges to actually be able to keep up with that growth, explains Paul.
The family-owned company also takes a quite unusual approach for a Swedish company.
“Ours is quite different; we go where there is people and demand, and that has taken us to places like China, Colombia and Pakistan – a number of countries that are not top of mind for the typical Swedish export industry but places with young people and growth. It´s also so that a medium-sized Chinese town is the size of Sweden so it’s both an opportunity and slightly easier to convince than the conservative markets in Sweden to change into things like this. We are going for emerging, growing, interested markets.”
Food is also linked to the disposable household income and those who can afford it spend on high quality, safe food for their family. And that includes Southeast Asia – which is a picture many who doesn’t know the region well find hard to be true, according to Paul.
“Another trend which works in our favour is to include no additives. What we offer is aseptic packaging, which means that we actually take a product that is clean in the sense there are no microorganisms and put it into a package which is free from microorganisms. Then it stays fresh without preservatives, without additives and any stabilizers.”
“Here in these markets you see a lot products that are not clean label, not only bright colours; there are still a fair amount of preservatives being used and in a B2C perspective it is important,” adds Paul.
Indonesia is Ecolean’s first priority because of the large population and the demographic changes. Thailand and The Philippines are also in focus, being used to flexible packaging.
“Malaysia and Singapore are extremely interesting in the sense that they are home to the regional head offices from some of the big companies within the target sector, where we also need to work with head office functions.”
Committed to the region for the long term Ecolean will act as a strategic partner to diary and liquid food producers in both established and emerging markets.
“We view our position in Kuala Lumpur as a really good location for a regional office – it’s easy to access and travel to and from, plus it offers good infrastructure. Onwards we will have a warehouse for spare parts, technical expertise and a workshop, but we have started out with sales. When we get customers in other countries in the region we will recruit service personnel and customer support there,” says Paul, who personally favours Malaysia.
“We have applied for and been granted an OHQ status by MIDA from next year.”
Paul, who was heavily involved in setting up the regional office (during which he says he encountered some smaller hassles and calls for higher efficiency to start things up), stayed neutral in the selection. Ecolean hired Business Sweden to make a comparative study of potential locations such as Bangkok, Kuala Lumpur and Singapore.
“We also consulted other companies, who have decided to relocate here. It was either Singapore or Kuala Lumpur for the final decision and there was a fair amount of bias against Malaysia back in Sweden; there is still unawareness and uncertainties – there is view of Singapore as being paradise on earth. Compared to Singapore it’s a value for money decision. Here you get up to 90 per cent of whatever what you measure in Singapore but for a third of the cost.”