France continues to present the glass packaging industry with huge market opportunities, not just because of strong national consumption but also thanks to positive export potential. “As long as the global brands in wine, water and spirits exist, France is a good place to be” Robert Gachot confirms. “The local market is performing well and it’s a very interesting time for us right now because we are investing massively in our assets in France.”
Mr Gachot has been Country Group Executive, South West Europe, for Owens-Illinois since April 2019, with responsibility for the company’s business in France and Spain. Having joined O-I in 2008, he served as Vice President and Corporate Controller at the company’s global headquarters in Perrysburg, Ohio, before being named Vice President and Chief Financial Officer for O-I Europe in 2011.
Prior to joining O-I, Robert Gachot worked for 24 years at DuPont, including assignments in several countries at corporate, regional and affiliate operations.
“We have invested a lot in Italy over the last few years and now we are doing the same in France” he confirms. “O-I is renovating plants, increasing capacity and adding new capabilities to make premium products like sophisticated spirits and bottles for wines.” The investment programme began three years ago and is now ramping up significantly, with the goal of positioning the business for long-term success. To date, approximately €250 million has been spent at the glassmaker’s French operations, including a soon to be completed project at Gironcourt (pictured).
Today, O-I operates nine glass container production facilities throughout France, including the Vergèze plant in the south, purchased 10 years ago and sited next to Nestlé’s Perrier mineral water facility. The other eight factories, in Reims, Gironcourt, Puy-Guillaume, Vayres, Wingles, Béziers, Labégude and Veauche joined the group following O-I’s acquisition of BSN Glasspack in 2004. Subsequently, the company’s French headquarters have continued to occupy the former BSN premises in Villeurbanne, where a testing laboratory is also located. Later this year, however, the headquarters will move to a new location in nearby Lyon that will fully reflect O-I’s brand positioning and where customers will be warmly invited to visit.
The manufacturing operations are conveniently located to serve local wine, water, spirits, food and beer markets.
Increased sales to regional breweries are expected following O-I’s Gironcourt investment near Nancy and the addition of a dedicated line at Vergèze. “At Gironcourt, the investment of €60 million is on a different scale” Robert Gachot confirms. This brownfield project includes the addition of a third furnace and associated lines, geared to the production of beer bottles for the local market, as well as key customers in Belgium, Germany and the Netherlands. “It is a major manufacturing expansion and we expect most product will be exported, which makes complete sense from a logistics point of view.”
According to Mr Gachot, it has been a long time since O-I added capacity of this magnitude in Europe. “We already have two furnaces at Gironcourt and the third will give significant leveraging capabilities to be more cost-competitive.” The structure of the existing facility in north eastern France has been completely renovated and is scheduled to start production in spring 2020. Construction of the new melter is imminent, while advanced production technology has been sourced from proven partners to standardise with other O-I plants and make the business even more efficient.
As a result of this investment, approximately 80 additional people have been recruited at Gironcourt, providing a major boost to the local economy. Hence O-I and the local community are working hand-in-hand. A project manager is in place and he is currently overseeing a significant training process. “Many of our most talented and experienced people that were already at the plant have produced educational material for the new recruits and this is now being put into practice with classes combined with practical training so that everyone will be ready for April.”
In addition, a series of employee exchanges have been organised, with personnel sent to O-I’s other large beer plant in Leerdam, the Netherlands, for training. The Plant Manager at Gironcourt previously performed the same role at Leerdam and his main objective is to deliver at least the same high level of expertise and productivity at Gironcourt.
Another recent major project involves the Reims plant in the Champagne region, where more than €50 million has been invested on a state-of-the-art furnace and production equipment. Different capabilities have been introduced to increase output levels of still and sparkling wine bottles at this two furnace installation. “This project, while less complex than Gironcourt, required the workforce to be trained to run the new furnace and machines” Robert Gachot confirms. With the latest melter and cold end featuring many automation advances, a considerable amount of time and global resources have been devoted to training.
Elsewhere within the O-I France organisation, additional manufacturing capacity has also been introduced at Puy-Guillaume. This reflects a growing trend throughout Europe towards rosé wines and the market’s need for more clear rather than coloured glass bottles. Separately, new forming machines have been introduced at Veauche, O-I’s expert plant in France in terms of premiumisation, adding the capability to make even more sophisticated premium ware for the wine and spirit sectors.
Further important investments are planned in the next 12 months, including the renovation of a furnace at Veauche.
Another important part of the company’s South West Europe business unit, O-I also operates two plants in Spain; Barcelona was part of the Avir acquisition co-ordinated via Italy and Sevilla was previously owned by BSN Glasspack.
Although the Sevilla glassworks is reported to be operating very successfully, further important developments are anticipated in the future. This plant specialises largely in the production of food jars but is also an important supplier of bottles for olive oil, carbonated beverages etc. Robert Gachot confirms that an improved equipment configuration is under consideration to coincide with the next furnace repair.
The production of still and sparkling wine bottles represents the main activity of O-I’s Barcelona factory, matching the local wine industry’s strategy to bottle increasing volumes of its output locally, prior to exportation. Mr Gachot confirms that this recent strategic change provides an important opportunity for O-I. “We are now engaged in a flint campaign in Barcelona for the Spanish, French and Italian markets and are constantly adapting the way we use this asset… it’s an ongoing process.”
It continues to be advantageous for O-I to exchange products between France and Spain. Some products made in Barcelona, for example, are shipped to the south of France, while O-I factories in the south of France are successfully shipping output to customers in Spain.
Innovative production technology
In 2019, O-I confirmed the first European installation of MAGMA glassmaking technology at the company’s Holzminden site in Germany, where the objective and focus is to generate more data, obtain greater experience and scale up volumes. This innovation will allow for ultra-flexible glass production that can be expanded rapidly and at low capital intensity.
Although there are currently no immediate plans for a MAGMA technology installation in his region, Robert Gachot is excited by the potential possibilities provided in terms of flexibility and productivity. “Apart from the introduction of production machines, there have not been too many inventions over the recent years relating to the furtherance of glass melting but you can only imagine the limits if the MAGMA technology becomes fully operational.”
Attracting and retaining young people
On the people side, Mr Gachot is eager to attract and retain young people within the glass industry. “The industry will have to replace an entire generation of people with experience that are close to retirement. Hence there are great opportunities for young people to acquire master-maker skills and have a career in a business that makes the world a better place producing the most sustainable packaging solution on the market.”
Thanks to some automation opportunities, he says, the role of new young people that are coming in will be enhanced. “We expect jobs in the future to be even more attractive, building upon expert skills and rewarding the passion for glass and sustainability.”
Consequently, recruitment is an important priority for O-I , with apprenticeship and graduate programmes in place across Europe.
Management structure and priorities
As Group Executive for South West Europe, Robert Gachot is responsible for O-I’s business in that region, including manufacturing and sales activities. He reports directly to Vitaliano Torno, President of O-I Europe.
European area executives meet regularly to discuss strategy and exchange ideas and concepts. “Our vast European network means that we have experts everywhere that can resolve issues and from an operational perspective, this network is used widely; there is so much expertise that we can utilise” Mr Gachot confirms.
“We are in the middle of a process to modernise our business in France. This includes projects such as the upgrade of our local headquarters to project the right image. Then we are developing new offerings to the marketplace to match the needs of our customers, addressing the trends of Millenials towards increased beer and rosé consumption, for example. We are modernising our plants and continue the development of premium capabilities, eg in sophisticated spirits and wine bottles for our customers” he adds. “The other aspect relates to flexibility – we are increasing flexibility with new machines and equipment.”
In line with the company’s strategy throughout Europe, O-I’s ongoing investment programmes in France and Spain help reduce emissions by implementing the latest furnace designs, equipment and machines that use less energy than older equipment. “We are also investing significantly in deNOx installations and filters for chimneys, as illustrated by a recently completed €2 million investment in Vergeze” Robert Gachot confirms. “There will be a similar installation in Barcelona soon.”
When Mr Gachot first entered the glass industry 11 years ago, there was an industry-wide focus on rationalisation but in the intervening period, the trend has changed because of sustainability. “Customers are now requesting more sustainable products and want to use glass” he concludes. “The future for glass looks very positive!”