We are transcribing the article in its entirety from the Poslovni dnevnik media.
Igor Mirić, chief executive officer of Alpha Charta from Zagreb, the leader in the domestic market, tells what the current situation is, what are their biggest challenges, how they see future trends, and their own business.
EU environmental directives have almost completely banned single-use plastic accessories such as cups, plates, cutlery, and straws. It was precisely in this trend that the company Alpha Charta was created in Zagreb, which is currently the largest producer of paper straws in Croatia with a capacity of around 300 million pieces per year.
They started their work during the coronavirus pandemic, and their plan is to reach a capacity of 900 million straws and expand the capacity. What is the current state of this market, what are their biggest challenges, hand ow to see future trends and their own business, Igor Mirić, Chief Executive Officer of Alpha Charta, tells us.
In your experience, how far has the EU directive banning single-use plastic packaging and accessories taken root in Croatia?
According to our experience, it is not yet at the level that would be desirable. The EU directive on reducing the use of certain single-use plastic products, which includes plastic utensils and haberdashery, entered into force in July 2019, and EU member states had until July 2021 to implement it in their national legislation. In Croatia, the EU Directive was implemented into legislation through the Law on Waste Management, which was adopted in September 2020.
Single-use plastic utensils can still be seen in use, however, there is a growing awareness of the need to reduce the use of single-use plastics, leading to positive changes in consumer behavior and business practices. More and more restaurants and cafes in Croatia are starting to use alternative products made of paper, cellulose, glass, metal, or wood instead of single-use plastic products, which is a positive move towards reducing the use of plastic.
It is important to note that the so-called "reusable plastic packaging" in practice has similar or identical properties to disposable packaging, therefore, although it is declared as "reusable", in reality, it is often used only once before ending up as waste. Therefore, it is still disposable in nature.
Therefore, it is important that manufacturers of packaging and other products understand their responsibility towards the environment and sustainability, and produce packaging that is truly reusable and can be recycled or decomposed in nature. Consumers also have a role to play in reducing the use of plastic packaging by choosing products with minimal packaging or packaging that can be recycled and choosing alternative products made from materials such as paper, cellulose, glass, metal, or wood instead of single-use plastic products.
Have consumers managed to get used to the fact that it is no longer possible to buy and use plastic disposable cups, saucers, straws...?
Consumers are gradually getting used to the fact that it is less and less possible to buy and use plastic disposable products, including plastic disposable cups, plates, straws, and other utensils, and that their use has become less popular and less socially acceptable in recent years, due to all more news about the negative impact of these products on the environment. Trends have turned towards more environmentally friendly alternatives, such as our biodegradable paper straws.
There are various alternative single-use plastic products that can be used instead, such as paper, pulp, glass, metal, or wood products. Many shops, restaurants, and cafes now offer these alternatives to plastic disposables.
However, there is still a demand for plastic disposable products, but their number is decreasing with increasing awareness of the environmental problems that products like plastic can cause. The reasons for the demand for plastic disposable products should be sought primarily in habits, but also differently in the price itself.
Ultimately, achieving a full habit of using sustainable alternatives to single-use plastic products depends on each individual's awareness and habit changes.
How has the industry of such products in Croatia adapted to this?
The single-use plastic products production industry in Croatia is fully aware of the new legal restrictions and sustainable trends in production, and the Directive in question has certainly influenced it a lot. However, we must be aware that the EU Directive does not refer to the production of single-use plastic packaging itself, and that there are many other countries, even in our environment, that are not covered by the Directive in question.
Our industry has adapted to this and has mainly directed the placement of its products to these markets. Part of the producers harmonized their portfolio, but also with the entry into force of the EU Directive, a completely new niche was opened, and a completely new trend, where new manufacturers, like us, introduce new technologies and materials, as well as new production processes.
Your company Alpha Charta is currently the largest producer of paper straws in Croatia with a capacity of 300 million straws per year, what are the biggest challenges for business?
As in any industry, the challenges for business are endless. Currently, one of the biggest challenges for doing business in Croatia is the price of raw materials, production costs, and the employment of quality employees. The prices of paper, glue and other raw materials required for the production of paper straws, as well as the prices of energy and other costs, have increased in the last few years, and this has affected the total production costs.
At Charta, we really use the best raw materials from the EU, the best glue precisely so that our Charta straws do not have a smell, then quality paper polished on the outside so that the straws do not have that specific "taste of paper", but are completely tasteless and extremely long-lasting in various types of drinks, all of which of course require higher production costs.
Additionally, the COVID-19 pandemic has impacted the market and demand for products such as paper straws. Restaurants, cafes and other catering establishments reduced their capacities or closed their doors completely, which led to a decrease in the demand for paper straws.
In addition to the challenges we have already mentioned, Charta, as well as other manufacturers at the EU level, also face the problem of importing paper straws from eastern markets, which are often of unsatisfactory quality, unhealthy, unsatisfactory for use, and are produced in a way that does not comply with European sustainability standards.
Import supervision is not yet at the level it should be in order to prevent the import of non-compliant and health-improper products, but such products, both straws and other packaging, end up on our market and are freely sold. I would just like to state here that not all products imported from Eastern markets are of poor quality or unhealthy, but a large part of them are. Competent institutions should carry out strict controls during import in order to primarily protect consumers and their health.
However, there are also opportunities for business growth and development. With increasing awareness of environmental issues, many consumers are looking for alternatives to single-use plastic products. Paper straws have proven to be one of the more popular alternatives, opening the door for manufacturers looking to target environmentally conscious consumers.
To meet the challenges and take advantage of the opportunities, paper straw manufacturers must continue to offer quality paper straws, innovate and develop new products that are environmentally friendly, economical and attractive to consumers. It is also important to establish strong relationships with customers and work on product promotion and positioning on the market.
What are Charta's plans for the next period, do you plan to expand the range?
Our company is dedicated to the development and innovation of products and the constant improvement of the quality and sustainability of our products. We have a defined multi-year strategic development and investment plan. We are currently planning further development and investments in multiple capacity increases in the segment of flat paper straws, which are already one of our best-selling products.
Considering the quality of our products, we already have a significant market share on the domestic market in both the HoReCa and Retail segments, and we successfully operate with significant partners such as Atlantic Cedevita, Roto Dinamica, Konzum plus, METRO Cash & Carry, Offertissime, etc. At present we are also in the Austrian market, the next step is to expand our operations to other foreign markets.
For this purpose, we are actively working on strengthening and developing existing business relationships with clients and are looking for new business partners abroad. We are currently in the phase of market opening in Germany and Poland. In addition, we plan to further expand our range, following trends and customer needs.
We are currently in the development phase, and we plan to expand our offer to the segment of industrial flexible paper straws of smaller dimensions, which are environmentally friendly and can replace plastic disposable products, all in line with industry trends, in order to meet the needs of customers who are looking for practical and innovative solutions.
In addition to the above plans, at Charta we are also focused on the constant improvement of the production process and our impact on the environment. As a company that takes care of sustainability and ecology, we want to be recognized as a leader in the production of environmentally friendly products and achieve sustainable business growth in accordance with our values and goals.
Can you tell us a few words about the origin of the Alpha Charta company the Charta brand, and its development?
We are partners in the Alpha Charta company and we founded it in 2021, during the Covid-19 pandemic, but the very idea of producing paper straws arose before, even after the time of my MBA studies. During and after the MBA studies, the idea was developed and improved through numerous conversations with different business partners, and interest groups and through market research itself. The process of realizing the idea lasted almost two years, including the development of production, procurement of equipment, finding ideal raw materials, developing the brand, and establishing business relations with all stakeholders.
From the very foundation, as market conditions changed, and with all the challenges that the pandemic brought, we managed to grow and increase capacities during that difficult period. Since then, we have managed to develop into the largest producer of paper straws in Croatia with a capacity of 300 million straws per year.
We produce paper Charta straws with diameters from 6 to 10 mm and lengths from 150 mm to 500 mm in various colors and packaging for the Retail and HoReCa segments. In addition to standard straws, we also do individually personalized projects for our clients in accordance with their specific needs. All our straws are FSC certified and we are the only producers of paper straws in Croatia with this certificate, and all raw materials, including paper, glue, and paints, come from the EU and are of controlled origin with all the necessary certificates in accordance with the legislative framework of the EU and Croatia.
The FSC certificate is a global standard for sustainability, and as a manufacturer of paper straws, we are the only proud holder of this label in Croatia.
In addition, we have implemented HACCP standards in production processes, which are part of the Food Act of the Republic of Croatia, the application of which has become an obligation for all entities in the food industry since January 1, 2009, and we are proud holders of three ISO certificates: ISO 90001: 2015 for the quality management system, ISO 14001:2015 for the environmental management system and ISO 45001:2018 for the occupational health and safety management system.
We are planning further development, diversification, and expansion of the business, and in the next 24 months, we want to achieve the production of 900 million straws per year. This will enable us to strengthen our position in the market, increase our export capacity, and enter new markets in the region and beyond. Alfa Charta's plans include the expansion of the assortment, including entering the market of flexible straws and further development in the segment of flat straws.
Text source: Poslovni dnevnik