From the Sector

Around EUR 355 million in overall turnover, 350 extruders delivered creating an additional recycling capacity for 1.6 million tons of recycled pellets as a result - these are the figures with which the EREMA Group was able to close the 2022/23 financial year in March.

"With demand for recycled plastics remaining high, the past financial year brought many challenges that we needed to handle," says Manfred Hackl, CEO of EREMA Group GmbH. The challenges included persistent delays in the supply chain and unexpected supplier outages. Logistics and production processes had to be adapted several times as a result. The situation has improved significantly meantime as a result of these measures and more stable supply chains.

The production locations in Austria manufactured 270 extruders and delivered them to customers around the globe. Taking the whole group into consideration, this figure rises to 350 including the extruders from PLASMAC, the Italian subsidiary. The recycled pellet production capacity of all extrusion systems delivered in financial year 2022/23 adds up to around 1.6 million tonnes per year. On top of that there are around 130 additional components and modules such as filter systems and ReFresher anti-odour units.

Recycling innovations for high-quality pellets
K 2022 - the highlight trade fair of the past financial year - saw the EREMA Group launch seven
new recycling systems and components. These included the new INTAREMA® TVEplus® DuaFil® Compact recycling system and the EcoGentle® plasticising unit, which was also newly developed. Thanks to their gentle polymer treatment and significantly lower melt temperature, both extrusion innovations deliver effective advantages in terms of the quality of the melt, recycled pellets, and final product, as well as impressive energy efficiency in post consumer and PET recycling applications. The significance of these innovations for plastics recycling is underlined by the nomination of the DuaFil® Compact technology for one of this year's Plastics Recycling Awards Europe in the category Recycling Machinery Innovation of the Year.
The same applies to the READYMAC 1109 TVE machine made to stock by EREMA Group subsidiary UMAC, as well as to the new ALPHA XS edge trim recycling machine for the inhouse recycling segment made by PLASMAC. The market launch of the deinking system presented at K 2022 by the EREMA Group company KEYCYCLE delivering a throughput of 1,200 kilograms per hour has been a success, as has the commissioning of a further unit sold to a film manufacturer.

40 years of EREMA
The beginning of the new financial year falls almost to the day on EREMA's 40th anniversary. On 14 April 1983, Helmut Bacher, Helmuth Schulz and Georg Wendelin founded EREMA Engineering Recycling Maschinen und Anlagen GesmbH, laying the foundation for the 40-year success story. In celebration, the comapny will hold the event EREMA Discovery Day at the company headquarters on the 1st of June. This event with live insights into the latest post consumer and PET recycling technologies will also see the official opening of the newly built research and development centre.

DyStar announces the plan to restructure its Ludwigshafen facility located in Germany. The strategic decision is made by the company in response to changing business conditions and market shifts.

Mr. Xu Yalin, Managing Director, and President of DyStar Group said, “This is an important strategic move for DyStar. We will focus on developing key emerging markets, which have been shifting over a decade. In the wake of higher energy costs and inflation, DyStar is determined to further improve cost efficiency and drive sustainable productivity as we continue to deliver the highest quality of innovative products that support the global supply chain.”

Mr. Eric Hopmann, Chief Commercial Officer of DyStar Group said, “The restructuring of this facility will be carried out in a phased manner. DyStar will diversify the production activity out of Europe and start with the reduction of manpower as a consequence. DyStar’s customers can be further assured of undisrupted supply, hence their production should not be affected as we will work closely to meet their specific requirements.”

The facility has been an integral part of DyStar’s global network. DyStar inherited this facility from their founders who started the Indigo research and manufacturing more than 125 years ago.

Freudenberg Performance Materials Apparel (Freudenberg) launches its biodegradable fusible cotton shirt interlinings range 46xx. With this innovation, the world’s leading specialist in woven, knitted, weft and nonwoven interlinings reduces its impact on the environment and supports customers in achieving their own sustainability objectives. In Asia, the series is marketed under the name 42xx series.

Approved biodegradability and non-toxicity by Hohenstein Laboratories
The new Freudenberg fusible interlinings for shirts and blouses have been developed in such a way that they are harmless to people and the environment at the end of their life cycle. Germany’s independent Hohenstein Laboratories performed biodegradation tests on the 46xx series, based on the Hohenstein method which draws on DIN EN ISO 11721-2:2003 and EN ISO 846, and approved it as biodegradable and ecotoxicologically harmless. The tests by Hohenstein showed no negative effects on either the germination of garden cress nor on earthworms in the acute toxicity test.

Energy-saving interlining
The new biodegradable shirt interlinings also show great potential for energy saving, as the fusing can be performed at a low temperature. Concretely, this means that the resulting temperature between the upper fabric and the shirt interlining during fusing is only 127°C which is significantly lower than the commonly used temperature of 143°C. Certified to OEKO-TEX® STANDARD 100 Class II for successfully testing for no harmful substances, the shirt interlinings are washable at up to 40°C and resistant to dry cleaning. In addition, it has also passed all ecological-toxicological tests and is a perfect end-of-life cycle solution.

Product details and availability
The products in range 46xx are available in Europe in the color white and the following weight classes: 4605 (90g/m2), 4616 (150g/m2) and 4618 (55g/m2). The adhesive of the interlinings consists of a 100% degradable bio-polymer. The shirt interlinings are ideal for reinforcing shirt and blouse collars, cuffs and plackets used in fashion, leisure and business clothing. The biodegradable, non-toxic interlinings are particularly important for labels with an ecologically sustainable claim.

Viscose speciality fibre manufacturer Kelheim Fibres, nonwoven producer Sandler, and hygiene product manufacturer pelzGROUP have jointly developed a new panty liner that is plastic-free according to the European Single-Use Plastics Directive (SUPD). This innovative solution is a step towards reducing the amount of plastic in hygiene products – and thus also a contribution to tackling the problem of plastic pollution.

According to a UNEP study on marine litter and microplastics, eight million tons of plastic end up in the oceans every year. A significant portion of this pollution comes from single-use plastic products, including conventional period products such as pads or panty liners.

The partnership between the three companies was formed under the Open Innovation principle, which allowed for creative idea exchange and facilitated the development of an innovative product. According to Jessica Zeitler, R&D Specialist at Sandler, “Our collaboration with Kelheim Fibres and pelzGROUP is a great example of how companies can work together to create solutions that benefit both the environment and consumers. We are proud to be part of this project and the opportunities it offers.”

For hygiene product manufacturer pelzGROUP, it is important to combine sustainability and performance to achieve broad acceptance in the market. “Our panty liner meets the strict requirements of the European Single-Use Plastics Directive (SUPD) while also matching the performance of conventional synthetic products. At the same time, our new panty liner has a completely European supply chain. This means short distances and therefore low CO2 emissions, and – especially in times of global disruption – reliability for our customers,” emphasizes Dr. Henning Röttger, Head of Business Development at pelzGROUP.

"Our viscose speciality fibres are an environmentally friendly and high-performance alternative to synthetic materials," says Dominik Mayer, Project Manager Fibre & Application Development at Kelheim Fibres. "They are at the very beginning of the product value chain and yet have an enormous impact on the functionality of the end product. Open innovation allows us to bring all partners in the value chain to the table, to find the best solution together in a very short time and bring it to commercialisation - the collaboration with Sandler and pelzGROUP is an important milestone in our AHP journey."

Lotus Teknik Tekstil A.Ş., Türkiye, has successfully started up a complete line to produce nonwoven roll goods for biodegradable, plastic-free wet wipes. This line has been delivered, installed, and commissioned by international technology group ANDRITZ.

The neXline wetlace CP line combines the benefits of two technologies: wetlaid and spunlace. Natural fibers are processed gently to create a high-performance and sustainable wipe. This next-generation wipe, called Newipe®, combines the benefits of spunlace fabric, in particular remarkable strength in all directions, with the biodegradability and softness of a WetlaceTM fabric. It is produced with a lower carbon footprint, has a low lint rate, and does not generate dust during production.

Lotus Teknik Tekstil A.Ş. is a leading nonwoven roll good producer and a member of a group company. The group company consists of 4 companies that operate end-to-end manufacturing including nonwovens, cardboard packings, plastics, and finished wet wipe products. Headquartered in Istanbul, Sapro is the leader in Türkiye and one of the four leaders in the manufacturing of wet wipes in Europe. The company produces, converts, and supplies 161 million sheets of wipes per day for personal, household, and industrial use, exporting 70% of its production to 65 countries all over the world. Sustainability plays a prominent role in Sapro’s business strategy.

SABIC will present its portfolio of PURECARES™ and TRUCIRCLE™ materials for the healthcare and hygiene market at INDEX™23 from April 18 to 21 in Geneva, Switzerland, under the theme of ‘Collaborating for sustainability and innovative solutions’.

At INDEX, SABIC will highlight a joint project with two market leaders, using certified circular polymers from the TRUCIRCLE portfolio in recyclable films for feminine hygiene, baby care and disposable medical applications. In all of these cases from diapers to surgical drapes and medical gowns, the sustainable materials can serve as direct drop-in alternatives with no compromise in production efficiency and product performance.

Further examples on display at the company’s booth will feature TRUCIRCLE solutions for facemasks, including an N95 design that localizes the value chain with SABIC® PURECARES PP spunbond and meltblown polymers in Saudi Arabia. SABIC provides complete solutions for facemask production as part of its localization strategy and has been a key enabler of the Saudi Made initiative. Also shown will be a closed-loop facemask developed in collaboration with industrial and research partners in Europe.

The company’s PURECARES polyolefin products are based on technologies free of both tris (nonylphenyl) phosphite (TNPP) and phthalates. Consumer comfort is achieved by using SABIC polypropylene (PP) and polyethylene (PE) polymers for bi-component fibers to answer multiple needs for soft and loft handfeel nonwovens, enabling easy lamination to other building blocks on medical nonwovens or absorbent hygiene applications.

In addition, SABIC produces TRUCIRCLE certified circular polymers for its PURECARES PP and PE portfolio with feedstock based on advanced recycling of mixed and used plastic that would otherwise typically not be suitable for mechanical recycling processes. These more sustainable solutions can be adopted in downstream processes as direct drop-in alternatives to incumbent materials with no compromise in production efficiency, purity and product performance.

Major developments FY 2022

• Currency-neutral revenues up 1% reflecting growth in all markets except Greater China
• Double-digit increases in North America and Latin America, EMEA up high single digits
• Gross margin declines to 47.3% due to strong increase in supply chain costs and discounting  
• Operating profit at € 669 million, including one-off costs of € 312 million
• Operating margin decreases to 3.0%  
• Net income (continuing operations) of € 254 million includes € 350 million one-off costs
• Executive and Supervisory Boards propose dividend of € 0.70 per share

Major developments Q4 2022

• Currency-neutral revenues decline 1% impacted by termination of Yeezy partnership
• Gross margin at 39.1% reflecting increased supply chain costs and higher discounting
• Operating loss of € 724 million
• Net loss from continuing operations of € 482 million

Outlook for 2023
Underlying operating profit expected to be around break-even level
In 2023, adidas expects currency-neutral revenues to decline at a high-single-digit rate as macroeconomic challenges and geopolitical tensions persist. Elevated recession risks in Europe and North America as well as uncertainty around the recovery in Greater China continue to exist. The company’s revenue development will also be impacted by the initiatives to significantly reduce high inventory levels. In addition, while the company continues to review future options for the utilization of its Yeezy inventory, the guidance already reflects the revenue loss of around € 1.2 billion from potentially not selling the existing stock. Accounting for the corresponding negative operating profit impact of around € 500 million, the company’s underlying operating profit is projected to be around the break-even level in 2023.

Reported operating loss of € 700 million projected
Should the company irrevocably decide not to repurpose any of the existing Yeezy product going forward, this would result in the potential write-off of the existing Yeezy inventory and would lower the company’s operating profit by an additional € 500 million this year. In addition, adidas expects one-off costs of up to € 200 million in 2023. These costs are part of a strategic review the company is currently conducting aimed at reigniting profitable growth as of 2024. If all these effects were to materialize, the company expects to report an operating loss of € 700 million in 2023.

• Harmful PFAS chemicals, used in thousands of consumer products, are shaping up to be the big environmental and health threat of our time. The EU is now the first in the world to propose a broad ban on these chemicals.
• Consumer brands worth more than €130 billion support the ban on PFAS.  
• Investors with assets in PFAS-producing companies are calling for an end to production.

Many companies are taking a stand against PFAS chemicals as the EU invites the public to give its opinions on the proposed ban on these harmful chemicals.

108 companies dedicated to phasing out PFAS chemicals from products and processes have joined the PFAS Movement, an advocacy campaign initiated by environmental NGO ChemSec that calls for comprehensive regulation of PFAS in the EU. The members comprise many well-known brands, such as Inditex, Urbanears and the Cookware Company, representing various industries— fashion, home goods, food, and personal care. The members are worth more than €130 billion in total revenue.

“A European ban on PFAS chemicals will have huge repercussions for all manufacturing industries and require much work for companies in the global supply chain. However, some parts of the industry oppose this ban, claiming that the change is too big to be justified. That’s why the support for a ban from such influential consumer brands as those in the PFAS Movement is so important. It’s a strong sign that businesses want to eliminate PFAS chemicals in products and processes”, says Anne-Sofie Bäckar, Executive Director at ChemSec.

A Hollywood Helping Hand
ChemSec’s PFAS Movement is not only supported by the brands but also by Hollywood actor Mark Ruffalo who became a PFAS activist after his involvement in the film Dark Waters. The film depicts the real-life events following the massive uncovering of PFAS contamination in the USA. As a result, several PFAS producers in the USA are now involved in multimillion-dollar lawsuits.

The health and environmental threats of PFAS, along with all the lawsuits, have also created attention among another influential group: institutional investors. Last year, 47 institutional investors with US$8 trillion in assets sent a letter to 54 chemical companies named by ChemSec, calling for them to halt the production of persistent “forever chemicals”.

The EU ban on PFAS
The proposed EU ban on PFAS is extensive and the first of its kind worldwide. The idea was initially initiated by Sweden, Denmark, the Netherlands, Germany and Norway, who have spent almost three years mapping the implications of a ban on PFAS chemicals in a dossier that expands over nearly 2000 pages. The proposal shows, among other things, that the emissions of PFAS were 75 000 tonnes in 2020. If this continues, the emissions are expected to sit at 4.4 million tonnes in 30 years. The emissions originate from the production and use of the many products that contain PFAS; furniture, cosmetics, electronics and many more.

Indorama Ventures Public Company Limited (IVL) reported a record FY22 financial performance from the company’s global manufacturing footprint serving end-consumers’ resilient need for daily necessities. The unusually high level of customer destocking that weighed on the fourth quarter result is expected to have leveled out and business should return to normal operating conditions, with China’s reopening to further spur demand.

Full-year Core EBITDA climbed 31% YoY to $2.3 billion as revenue rose 28% to a record $18.8 billion. The company recorded strong cash flows of $2.2 billion, up 111% YoY. Indorama Ventures’ geographically diversified, integrated platform, backed by management’s agility, withstood unprecedented global events to generate earnings through the business cycle. During the year, the company continued to focus on its growth plan, successfully integrating its strategic surfactants business in Latin America and Vietnamese packaging acquisition. A dedicated senior team is working tirelessly and is committed to the company’s ‘Vision 2030’ sustainability goals including recycling technologies and introducing biomass feedstock to the company’s product portfolio. The ongoing ‘Project Olympus’ cost transformation program delivered an annual run rate of $449 million in efficiencies.

The annual result was impacted by an unusually challenging final quarter as fears of a recession and reduced transit times led to widespread destocking by customers. 4Q22 Core EBITDA declined 43% YoY to $264 million on a 1% drop in revenue to $3.9 billion. The pandemic lockdown in China also continued into the final quarter, reducing factory demand across Indorama Ventures’ portfolio and resulting in narrower margins from lower prices and higher costs. Higher energy and utility costs impacted European operations as the war in Ukraine continued into the winter.

To improve competitiveness and build resilience, Indorama Ventures rationalized underperforming assets in the Fibers business in Europe and a PTA site in Asia, resulting in a $7 million cash impairment in 4Q22 and a $253 million non-cash impact. As a result, the company looks forward to a $38 million uplift in EBITDA in 2023, reaching up to $65 million by 2025.

Carbios announces its membership of the Ellen MacArthur Foundation’s Network. Carbios shares the Foundation’s commitment to accelerate the transition to a circular economy, especially in the areas of plastics and fashion. By joining the Ellen MacArthur Foundation’s Network, Carbios will connect with other leaders within the Foundation’s leading circular economy network of businesses, policymakers, academia, innovators, and thought leaders worldwide.

Carbios fully adheres to Ellen MacArthur Foundation’s vision for a circular economy for plastic. Its biorecycling and biodegradation technologies already match the actions defined by the Foundation:

• Eliminate all problematic and unnecessary plastic items
• Innovate to ensure that the plastics we do need are reusable, recyclable, or compostable
• Circulate all the plastic items we use to keep them in the economy and out of the environment

Through ambitious collaborative projects, plastics and fashion are two topic areas for the Foundation and are also at the heart of Carbios’ activities. Providing actionable solutions to support brands’ ambitious commitments for sustainable packaging and textile industries, Carbios has founded two consortiums: one in the packaging industry established with L’Oréal in 2019, which has since been joined by Nestlé Waters, PepsiCo and Suntory Beverage & Food Europe; another created in 2022 in the textile industry with apparel and fashion brands On, Patagonia, PUMA, PVH Corp. and Salomon. Together, the consortium members develop solutions promoting the recyclability and circularity of their products.

Joining the Ellen MacArthur Foundation’s Network takes Carbios’ circular economy actions one step further. Carbios recently underscored its commitment to circularity and environmental responsibilities by publishing its first Sustainability Report at the end of 2022^[1]. In 2019, Carbios’ biorecycling and biodegradable solutions were among the first innovations to be labelled “Efficient Solution” by the Solar Impulse Foundation^[2].

^[1] Cf. press release dated 15 December 2022
^[2] The Solar Impulse Foundation has identified over a thousand clean and profitable solutions that are economically viable and can be implemented on a large scale.