Toly, the global supplier of plastic packaging components to the beauty industry, is confident it can double its business in the next five years, chairman and chief executive officer Andy Gatesy told The Times Business.
Currently celebrating its 40th year in business since its establishment in Malta, Toly is examining the potential of markets in South America, including Brazil, which are as yet untapped by its significant global reach.
“This year the business will be worth well over €50 million and our plan is to double our business in the next five years,” Mr Gatesy said. “As a group, we can do it.”
The growth, he added, will be spearheaded by Toly’s achievements in the airless packaging segment – an operation based at its Korea plant where capacity is set to be significantly increased in the short-term. A growing market has been fuelled by this new technology, Mr Gatesy said.
By the end of this year, Toly could have more to celebrate than a birthday. Over the last three years, Mr Gatesy pointed out, Toly had been adding an average 40 new customers a year to group business, including high-end international brands and regional market leaders.
By the first six months of 2011 alone, Toly had already clinched 40 additional clients and envisaged a total of 70 new customers by the year’s end at the current rate of growth. The additions to the client portfolio – based in various countries and diverse product areas – are the result of an aggressive international sales and marketing strategy.
Toly’s annual showcase magazine this year boasts a wide range of elegant packaging and innovative solutions for some of the world’s most glamorous brands including Dior, Chanel, Sephora, Babor, Givenchy, Lancome, Yves Rocher, Avon, and Jean Paul Gaultier.
Mr Gatesy attributed Toly’s growth and positive forecast to its foresight and its manufacturing footprint – and a sustained demand for luxury goods throughout the economic downturn that kept its clients in good health.
“As a group, we are up 20 per cent this year but we have changed over the past few years and diversified our business,” the chairman explained. “Ten years ago, we had one factory in Malta producing compacts. I often say to my team that had we still had one factory here making compacts we would probably not still be in business. But because we have diversified our product to serve all types of make-up, skin care, fragrance and promotional lines, and added factories in China, India and Korea in the last five years, we were able to weather the crisis. We were able to spread the risk and look at the situation differently.”
Mr Gatesy was keen to emphasise that the company’s main differentiator in comparison to other foreign-owned manufacturers was its autonomy over strategy, plans and designs for the ‘Toly world’.
Although Toly is a Danish holding company, all corporate functions are based at the sprawling Bulebel plant which currently has a staff complement of 340. As a privately-owned operation, it is able to work according to a long-term vision with flexibility.
The Malta plant has won numerous projects over the past 18 months, after a tumultuous 2009 when it was forced to lay off 84 people as a consequence of brands shutting off their supply chain in a kneejerk reaction to the crisis. With government support, it was able to safeguard jobs and work to bring business to the island.
Significant investment has been channelled into its three other manufacturing concerns and a growing network of wholly owned sales offices in key cities including London, Paris, Milan, Barcelona, Shenzhen, Delhi, Hong Kong, and Seoul. Representation has been secured in smaller Toly markets like Australia and Israel.
“The leading brands come to us because we can produce quality at the highest level,” Mr Gatesy said. “As the world becomes more competitive – and smaller – it is imperative to focus on innovation and creativity to differentiate yourself. As a group, we are very good at doing that. Our manufacturing footprint helps.
“Many of our competitors closed down their European plants and moved to Asia. Toly kept a balance between the European and Asian operations. My vision of the future is not one that is going to be based on just low-cost manufacturing. Low-cost eventually becomes high-cost. Some Asian countries are already high-cost and costs in China are rising steadily.”
With sustainability becoming an increasingly greater priority in business, Mr Gatesy believed the future in manufacturing would involve basing factories closer to customers’ own operations.
In an ideal world, Toly would operate plants in North and South America, Europe, and possibly two in Asia, depending on where clients were based. Under the current footprint, Toly produced goods in Asia and imported them to Europe, but as costs rise and sustainability becomes a greater issue, it is possible more customers will demand to be supplied by operations in their region.
Mr Gatesy added sustainability posed another challenge to the Toly business. By default, he conceded, luxury packaging was less environment-friendly than low-cost, lightweight packaging.
The Toly plant in Malta operated under a policy to reuse as much internally generated plastic waste as possible to reduce disposal levels, and measures to render the factory more energy-efficient are constantly upgraded.
A major discussion in the industry was focused on the application of different materials like non-oil based plastics which involved higher cost and lower quality. Consumers, Mr Gatesy feared, were not prepared higher prices.
Many niche brands had embraced greener plastics and others had examined the potential of different initiatives.
Toly, on its part, was increasingly looking at dual use packaging to prolong its offerings’ lifespan and sustained its efforts at innovation.