At the moment there is no ambassador in the DTI for packaging per se. This is partly because of the way our industry is structured and partly because of its apparent inability to work as a team towards change. Rodney Abbott reports
Tired of fighting an uphill battle? Concerned about the strong pound and competing on a level footing abroad? Fed up with being an environmental punch bag? Do you feel that government shows little interest in your problems?
Most, if not all, UK packaging producers identify themselves with these sentiments but few, if any, have yet to accept that they are largely to blame for their current misfortune.
When, oh when, are suppliers going to accept that they are part of a very fragmented industry that is desperately crying out for unity?
Government departments such as the DTI can hardly identify the industry’s needs when the industry has so much difficulty in identifying itself.
The Mapping Project, undertaken by the IoP in 2001, identified the industry as a chain of industries.
Some might say that the packaging supply chain should be defined separately and clearly identify packaging manufacture in its own right and Packaging Federation chief executive Ian Dent, who is charged with bringing unity to the industry, is one of them.
Wise industrialists should also interpret the limitations of the DTI, which is used to dealing with industries vertically and not horizontally, and this is the crux of the matter and where our industry is at odds.
There is little doubt that the industry should travel down the horizontal road if it is to flourish. If only life was that simple. Some bodies don’t have a problem with this philosophy for their membership does not extend beyond the packaging manufacturing industry. Talk to organisations that represent materials users in both the packaging and other industries and attitudes change considerably.
Time for some real clarification so I spoke to Ian Dent who took time out to review the industry’s historical dealings with the DTI, the challenges that currently face packaging suppliers and outline his hopes for the future.
“A DTI link was set up three years ago in a bid for Government to understand the issues affecting the packaging manufacturing sector – a £9.13bn industry that is a central part of the UK manufacturing base.
“Once understood, Government ministers can more easily comprehend how different regulation is affecting the industry and, more importantly, how it is affecting UK business against that of our competitors.
“Part of developing the link involved an e-commerce impact sector study on packaging and its supply chain. Price-Waterhouse-Coopers then carried out a study. That was recognition that the packaging manufacturing industry needed to be looked at more closely.
“Three years down the line, the larger packer fillers have – by the adoption of e-auction trading – focused a lot of the major packaging manufacturers on development of their own e-commerce strategies.
“Most players have now developed web sites into more than just information vehicles. The DTI failed to follow up the exercise, mainly because I don’t think it is sufficiently aware commercially as to how to encourage others to develop the platform they have attained.
“Having written the report, the DTI appears happy for it to sit on the shelf to gather dust. It should be establishing with trade associations an action plan to propel the initial effort forward. They should be more proactive.
“There was money involved when they did the e-commerce project but that went into Price- Waterhouse-Coopers’ pockets. When they helped produce the competitiveness report, which followed on from the e-commerce project, they funded Pira. “Since Patricia Hewitt’s arrival, the DTI has closed its cheque book until the DTI/industry interface has been reorganised but this operation is unlikely to be completed until the end of the year. Meanwhile, many have had their funds withdrawn totally so ad hoc studies have suffered considerably. “Until Mrs Hewitt’s arrival, the DTI was looking at ad hoc projects that wouldn’t cost any more than £40 000 each which probably indicates that the packaging manufacturing industry would not have been able to rely on any more than £100 000 a year in small tranches.
“Ironically, it now appears that funding is more regionally-based and the higher the amount requested, the more likely it is to be accepted, thus discouraging many national industry cost-effective proposals.
“Is the packaging manufacturing industry getting a fair deal? The answer to that question is yes because most other industries have similar problems. There are industries that do better and that is due primarily to political overtones – the aerospace industry is a prime example.
“If an industry is singularly self-sufficient, it tends to leave it alone and only step in when it has major problems.”
So just what is or what should the Packaging Federation’s role be in dealing with an industry that appears to have a lot of difficulty in understanding the need for unity and the word teamwork.
“″Having written the report, the DTI appears happy for it to sit on the shelf to gather dust. It should be establishing with trade associations an action plan to propel the initial effort forward. They should be more proactive” ”
At the moment the Federation is representing a lot of the major players in the packaging manufacturing industry as individual member companies.
There is no formal link with other bodies but a certain amount of co-ordination. It does act as the co-ordinating body simply because its members cover metal, glass, plastics and paper and board packaging.
This brings us back to the thorny question of structure. I asked Ian Dent to comment on current DTI thinking and to do a spot of crystal ball gazing.
“Since the DTI has had to cut back on funding and human resources, they will expect all material representatives of the packaging manufacturing industry to switch to a horizontal structure. It is certain that they will not be prepared to adopt both philosophies. So it is up to the industry to finally get off the fence and say which structure will serve its interests best.
“The question it has got to ask itself is: Is it better to be attached to a packaging centre worth £9.13bn in the UK or be seen as a £1bn industry attached, in the case of paper, to newsprint?”
As this article was being prepared Mr Dent was beginning an arduous round of talks with leaders of the various materials’ bodies whose views on this critical matter differ widely and are reported on these pages.
Ian Dent wants to clear a path towards a more unified structure within the next 12 months. Hopefully, the rest of our industry will be as proactive as he is.
“There is and always has been a natural tendency to feel more comfortable and more closely associated with a materials sector, rather than the market sector,” he says.
“Those who argue for a vertical structure do so because a switch to a horizontal system may diffuse their original links with the DTI and some may have a bigger remit other than packaging. They like to see packaging as a sector of their bigger profile within the DTI.
“I see the benefit of being able to promote the size of the industry by co-ordinating our views. Too many of our problems stem from the industry being too fragmented. The government needs clarity and I am talking about the packaging manufacturing industry.
“It is the materials with a tradition of vertical representation with the DTI that need to be convinced of the benefits of the horizontal route.
“The DTI needs and wants to understand this industry but civil servant mentality does not readily seek change so it is up to us to put our case first.
“Eventually, the movers and shakers will make it happen and the horizontal approach will open the door to the key players from all the major sectors.
“When the industry finally adopts a horizontal stance, Government’s perception of packaging will change radically.
“Issues, such as waste, will not cloud Government thinking. We will not be regarded as a problem child that needs to be taken into care.
“The industry will be regarded as a major wealth creator for the country and a big employer, which can become healthier if it represents itself as a £9bn+ manufacturing sector.
“It is then that we can start to talk more sensibly about how regulations on climate change, employment and environmental issues are impacting on us compared to our competitors outside of the UK.
“It is then that Government will listen before introducing new directives.
“It is then that the DTI will regard the packaging manufacturing industry deserving of financial support.
“So unity is paramount. The industry is too fragmented. Too many people are knocking on the door and giving them different and confusing messages about the industry. We must learn to work together as a team.”