Exclusive interview: Michael Prechtl, Country Group Executive at O-I

Exclusive interview: Michael Prechtl, Country Group Executive at O-I

While visiting the O-I glass plant in Estonia recently, John Wallis met Michael Prechtl, Country Group Executive for North/Central Europe to discuss recent trends and priorities for Europe’s leading glass container manufacturer. The full version of this article appears in the November/December issue *.

With a turnover of some $7 billion, O-I is the world’s largest glass packaging producer. The company employs more than 26,500 people at 77 plants and in 23 different countries.
It was in 2004 that O-I successfully completed a series of important European business acquisitions, culminating in its purchase of the multi-national BSN Group to become the continent’s largest player. Today, the company maintains interests as far afield as Estonia in the east and Spain in the west, collectively representing approximately one third of the glassmaker’s worldwide operation.

The European glass packaging business is recognised as the world’s most competitive, characterised by high quality expectations and unsurpassed innovation potential. “In essence, European glassmakers are responding by delivering some of the most innovative products” Country Group Executive for North and Central Europe, Michael Prechtl explains. “This situation is effectively fuelling many important glass industry trends at the moment, whereby leading brewers and other key customers are filling in Europe and successfully exporting their products throughout the world.”

With operations in 10 European countries and 34 plants in total, O-I is well positioned to champion glass and serve literally thousands of customers. An impressive portfolio of plants throughout the region manufactures up to 5000 different glass bottle, jar and container designs every day that are shipped to more than 50 different countries.

Extensive capabilities

Michael Prechtl is responsible for O-I’s interests in the Netherlands, Germany, Poland, Czech Republic and Estonia. This region includes 10 manufacturing plants, each of which is geared to accommodate specific sector production needs on a plant-by-plant basis.

Earlier in his career, the experienced Austrian national spent several years with Verallia, running the company’s business in Germany, before expanding its activities into Russia and Ukraine via the acquisition of existing glassworks in both countries. Subsequently, he left Verallia to pursue interests outside the industry, before joining O-I in 2014. Initially, he was appointed Regional Manager for the Czech Republic and Germany and successfully developed the numerous business connections that exist between these two countries both in terms of markets and production. Only latterly have his responsibilities been expanded to encompass the Netherlands, Poland and Estonia.

Factories are strategically located in Dubi and Nove Sedlo (both Czech Republic), Järvakandi (Estonia), Bernsdorf, Holzminden and Rinteln (all Germany), Leerdam and Maastricht (both Netherlands) and Jaroslaw and Poznan (both Poland) to provide extensive regional coverage.
Within the North/Central Europe region, an ongoing programme of furnace rebuilds and factory modernisation projects have included multi-million Euro investments at the Rinteln, Järvakandi and Dubi sites in recent years. In addition, two furnace rebuilds have been conducted in Poznan over the past 24 months.
Plans are now finalised for a furnace rebuild at the Bernsdorf glassworks in Germany at the end of 2019. Scheduled for commissioning at the beginning of 2020, this project reinforces O-I’s commitment to continue its asset optimisation programme throughout Europe.
Mr Prechtl confirms that this and similar investment projects in the future will continue to rejuvenate melting, forming, inspection and other production process steps wherever appropriate technological improvements can be identified. “It is important to initiate permanent innovation in each of these areas, especially those that relate to the energy-intensive melting process” he explains.

Diverse requirements satisfied

Over the last four years especially, the European business has developed very positively, with increased volumes and margins generated. This success is based on the development and implementation of a long-term strategy under the leadership of Vitaliano Torno, President of O-I Europe. According to Michael Prechtl, part of the strategy is to constantly improve and tackle the challenges that lie ahead.

The diverse requirements of European customers has led O-I’s European arm to maintain strong production flexibility, with an important focus on product individuality, in many instances necessitating short production runs, while maintaining excellent quality levels.
Effectively, O-I has compartmentalised its business into key segments, in line with customer requirements and asset capabilities. The beer sector, for example, has completely different requirements to those of premium spirits producers. “In beers, you want long runs, high efficiencies and the lowest costs and some of our European assets have been set up to target this type of work and are performing successfully in line with the volume requirements of a highly concentrated customer base” Mr Prechtl confirms.

Premium spirits represents a second important market segment, where the optical quality of the glassware produced is critical. For example, the Järvakandi plant in central Estonia is focused on meeting the regional needs of leading premium spirits producers for clear and extra clear flint glass packaging. It is the EU’s most northerly and easterly glassworks and as such, is well placed to serve the interests of customers in Finland, Scandinavia and neighbouring Baltic countries. The full spectrum of technologies, capabilities and commercial strategies available from within the wider O-I Europe organisation is being utilised by Plant Manager Kaido Turro and his team to satisfy the needs of a growing client list that includes many well-known, high value spirits brands. “When a consumer buys an expensive bottle of spirits, he/she wants to know that the quality of packaging is perfect” says Michael Prechtl.

Another key glassmaking segment targets local producers of wines, oils etc, serving the lower volume needs of a more fragmented customer base. This requires a different distribution strategy and significantly greater flexibility from the glass factories set up to meet this demand.
And in serving another key market, food, O-I is working closely with customers who specifically require value-enhancing packaging for their products.

Market trends

Alongside other local players, O-I is well positioned to respond to improving customer and end consumer positivity towards glass packaging throughout Europe.

While emphasising that the prevailing ‘anti-plastic’ sentiment is definitely a very positive development, Michael Prechtl says “it is prudent to remain alert and carefully observe market developments and trends – and understand what is driving these developments.”

Mr Prechtl stresses that the most sustainable glass container is one that is reusable, although the ability to recover and reuse it depends on the legal framework in place from one country to the next. In the Czech Republic, Germany, Switzerland or Austria, for example, there are high reusability rates thanks to the existence of a system that aligns itself closely to retailers. Elsewhere, a single use system has been the preferred option, so there is no common approach across the European market.

Throughout the region, however, the market growth experienced for glass packaging in recent years is expected to continue into the foreseeable future. “Coca-Cola investing in a new glass filling line in Germany and bringing back the one litre glass bottle to the German retail trade represents a massive development.”

Encouragingly, Michael Prechtl is confident that the retail sector is now offering a genuine choice of packaging to consumers once again, a choice that includes glass as well as plastic. Furthermore, there is strong evidence that glass packaging is again being selected in some countries for milk, mineral water and other beverages, sometimes as part of a sustainable, returnable system. “Ultimately, the extent of consumer pressure will dictate how much reverts to a returnable system again” Mr Prechtl concludes. “In line with O-I’s Europe-wide strategy, we have the passion, expertise and dedication that is fundamental to becoming the leading glass container manufacturer in the world. We have very strong relationships with our customers that represent some of the biggest brands and newest craft producers. And we have innovation and sustainability as key pillars of our strategy.”

Further Information: 

O-I Europe Sarl, Mex, Switzerland
web: www.o-i.com

* The full version of this article appears in the November/December issue, alongside a series of exclusive interviews with other industry figureheads, topical market reports, events round-up and technology updates. Subscribe now to receive the full paper and digital versions (subscribers receive a free copy of the Who’s Who / Annual Review yearbook!).