Buying up an adjacent former aluminium casting mill in the northwest of England is the latest move to develop “vertically and horizontally,” ready to seize new opportunities. Director Armindo Marques spoke to TWM Senior Editor Helen Morris from his home office in Portugal.
TWM first met Armindo Marques, Poppies Europe Director, and his team in May 2019 at the company’s six-acre St Helens plant in northwest England. At the time, the independent Northern Powerhouse company was converting 15,000tpy, producing an impressive 10m napkins per day. It remains the UK’s market leader in the printed napkins sector, manufacturing and supplying napkins, printed napkins, and additional disposable tabletop products under the Poppies brand name as well as bespoke own-label products, mainly for the AfH catering and retail sectors.
The company had created – and since maintained – a strong niche in the paper tableware market, growing through innovation and also strategic acquisition of competitors such as McNulty Wray, which is acquired in 2012, and Staples Away From Home which it purchased in 2015. Elsewhere, organic growth included the purchase of two high-capacity twin lane OMET napkin lines in 2018 to complement the existing 13 OMET lines already on site, and seven Servotec’s machines. Then, there were 34 production lines and 169 staff, and the site was also home to the largest fleet of modern napkin printing machines in the UK.
The focus was on the long-term, and the company had invested heavily and accordingly.
Now in August 2024, the business hasn’t rested on its laurels. Most recently, Marques says the company has had “the fantastic opportunity” of acquiring the site next door: “Overnight, we have doubled our space to 12+ acres. The site was originally an aluminium casting mill and in the recent years a recycling operation for electronic consumer devices, so it came with the benefit of 10MW electrical power, gas, and environmental permits. This has given us a lot of scope for development, vertically and horizontally.”
He explains the company’s growth recipe has remained the same: “A generous dose of competitiveness to grab some market share, a handful of product development to enlarge our offer, and a pinch of acquisitions to rationalise the lot.”
Concretely, the business has bought more napkin machines: “They are faster, leaner, and we have created new brands, mainly in the sustainable space,” he says. In 2020, it also purchased the tissue division of Terinex, one of the UK’s leading flexible packaging companies offering premium and sustainable flexible packaging items for the food and beverage, pet and medical sectors.
“Terinex was operating in facial tissue for many years and had a well-established brand in the AfH market “Cloudsoft”. We have housed all the production lines in our site and now produce the Cloudsoft tissues in St Helens along with our other brands Poppies, Cloud 9, Happy trees, Combinations, and McNultywray,” he adds.
For future growth, Marques believes strongly in the company’s recipe: “We will keep fine tuning it as the market opportunities come along with the added benefit of our new site that will enable us to act swiftly for any future acquisitions.”
Sustainability is a key focus: “Sustainability is no more a trend; it is part and parcel of any product that we supply. The customers are now very knowledgeable and demand and specify exactly how far down this path they want to be. Will it be recycled, unbleached, FSC-certified, fossil-free. It is really a fantastic and exiting development of our industry and I feel we are just at the start.”
Poppies Europe has now finished the first stage of its solar project and is going to put more focus on packaging reduction. “A few years ago, we introduced Cloud 9, a product with less packaging and less carbon footprint by design. The popularity of this napkin confirms us in the path to take. And before the end of 2024, we will be able to offer 100% paper packaging and be plastic-free for the whole napkin range we produce.”
Another change for the market has been induced by the uncertainty caused by current conflicts and political troubles that have made the supply chains “more challenging”: “Therefore, the buyers want to source closer to home. This trend largely benefits us, especially in the retail sector.”
Covid-19 times hit the company’s market (hospitality) “very hard”: “But the recovery was fast, and the pain has faded away to a point that it now seems a decade ago. I feel that no new tissue buying habits have survived this period. But I bet the hygiene guys might have had a different experience.”
So far, 2024 has been “a stabilised year”: “We are seeing a return to normality which for Poppies is always a steady growth due to pushing forward with innovation and continuing to differentiate our product offering. Outside of this the UK market is flat. We foresee the increase will come from the continuation of what we are doing – the innovation and the push to produce the most sustainable product we possibly can.”
In terms of the energy crisis, in 2022/23 Poppies Europe invested in a 1.3-megawatt solar system which powers the majority of its manufacturing plant. There remains the potential to extend this to a 2.1 megawatt system using the remaining roof space at Poppies’ 12 acre site. “This has helped offset the cost implications of the energy crisis along with meeting the company’s ambitious environment targets.”
The impact of inflation has produced an “unusual” response in the hospitality sector: “Surprisingly we have seen an increase in our premium tabletop offering and this is being driven by the consumer when dining out wanting to see and feel the value of what they are paying for. They might eat out less often due to price, but when they do the expectation is higher for the food and table setting.”
Marques’ overall assessment of the UK market? “We are convinced that M&A will intensify in the UK, boosted by European or further afield large tissue operators that want to take or increase their market share in the UK. I don’t think the market is in overcapacity and that strategy of acquisition is more in line with a logic of margin preservation.
“The opportunities lie within innovation, not only a product basis but as a business. This can be developing a new product for the market along with a constant eye on ensuring we are manufacturing in the most sustainable and efficient way. The need for a steady investment in our production facilities whilst Poppies continues to be the market leader for tabletop products in the UK. By doing this we are ready to capture any opportunities that present along with being agile as a business to head off any challenges we may face.”
