SWM International has been successfully acquired by Evergreen Hill Enterprise. The company will now operate as an independent privately owned business with its headquarters located in Luxembourg.
SWM International is a leading supplier of premium, highly engineered lightweight materials. The company serves various industry segments, including tobacco, cannabinoids, battery, surface protection, packaging and medical. With a global footprint including facilities in Asia, Europe, Latin America and the United States, the company is home to nearly 2,000 employees worldwide, including an experienced management team.
“Today marks a milestone for our employees, our customers and our partners,” said SWM CEO Katrin Hanske in a statement. “Leveraging our profound engineering expertise in botanicals and natural fibers, we are dedicated to further advancing innovation in our distinctive products and technologies, all while expanding our manufacturing capabilities.”
The acquisition was first announced in August 2023. Headquartered in Singapore, Evergreen Hill Enterprise is affiliated with BMJ of Indonesia.
BMJ affiliate Evergreen Hill Enterprise has offered $620 million to acquire Mativ Holding’s engineered papers (EP) business, which supplies papers to the tobacco industry.
“While a solid business, EP’s concentration in the tobacco industry is not aligned with Mativ’s long-term ambition and presents a more attractive value proposition under new strategic ownership,” said Mativ CEO Julie Schertell in a statement. “Our talented and dedicated employees will continue to deliver outstanding products and service to EP’s long-standing customer base, and we are confident in a smooth transition.”
Mativ intends to use the proceeds of the proposed transaction to pay down debt.
Subject to customary closing conditions, including regulatory approvals and satisfaction of the consultation process with the applicable works councils in France, the proposed transaction is expected to close in the fourth quarter of 2023
Based in Singapore Evergreen Hill Enterprise is part of a successful, Indonesian-based privately held group of diversified companies serving the tobacco, banking and consumer electronics industries, among other sectors.
The buyer is expected to fund the proposed transaction with existing cash balance and is not dependent on capital markets for financing
Mativ Holding was created out of the 2022 merger between Schweitzer-Mauduit International and Neenah, two leading global manufacturers of specialty materials.
BMJ said its business would continue to operate as usual. “There will not be an integrated structure between BMJ and SWM so that both companies will maintain the autonomy of action and confidentiality of projects,” the company wrote in a statement.
“Having said that, BMJ is delighted to be affiliated with SWM, a prominent supplier of engineered papers. This affiliation will open opportunities for BMJ to collaborate with SWM in some strategic areas, including, but not limited to offering complimentary geographic reach and product lines, ultimately providing comprehensive and unparalleled value to the customers and stakeholders.”
Manufacturers of tipping papers adapt to a changing cigarette market.
TR Staff Report
Valued at $1.6 billion in 2021, the global cigarette paper market is projected to reach $2.2 billion by 2031, according to Allied Market Research. Tipping base paper represents only a small part of this market but is an essential component in cigarette construction, where it has to meet many requirements.
“As tipping base paper is a printing paper, the printability is most important,” says Nina Ritter-Reischl, CEO of German cigarette paper manufacturer Glatz Feinpapiere. “Printability is mainly depending on sheet formation and smoothness as well as the sizing. The latter is important to prevent color bleeding in the printing process. Our papers show a very good printability due to their formation and constant quality parameters, especially in sizing. Our know-how in tipping base paper goes back for decades and is one of our main assets.”
Other considerations are water absorption, which determines ink absorption; smoothness, which plays a role in printability; and a “dynamic contact angle” for the gluing process; along with flammability, according to Liem Khe Fung, Innovation Center director at Indonesian cigarette paper manufacturer BMJ.
Liem Khe Fu
“The print quality of BMJ’s tipping base paper is excellent,” says Liem. It allows for 12-color print and the inclusion of tactile and embossed features along with security features. Flavored and sweetened papers are also possible, according to Liem. The company started to significantly supply the market only a few years ago, so the potential growth for BMJ in this field is still high, according to Liem.
Ritter-Reischl views her company as a specialist for tipping base paper within the cigarette industry. “Therefore, we started focusing even more on our tipping base paper customers and were able to raise our sales within this market segment,” she says. “Tipping base paper customers are demanding and have high quality standards; they expect close customer relationships and interlinks in addition to excellent services. Those are challenges we can meet and are specialized in. As an example, we even deliver our tipping base paper with our own transportation company to one of our most valued customers, door to door every day.”
The tipping base paper market has become highly competitive. Liem, whose company mainly caters to the Asian market, says that price competition is the main challenge, followed by small order quantity per stock-keeping unit.
Julius Glatz is strong in Europe. “However, we also deliver to Asia and Latin America as there are printers too,” says Ritter-Reischl.
As tipping base paper is an essential part of the cigarette, the tipping base paper market is facing the same challenges as the cigarette market in general. “Rising inflation and therefore declining purchasing power of consumers, political instability, rising costs and stumbling logistics worldwide are afflicting the market,” says Ritter-Reischl.
Following a modest uptick during the Covid-19 pandemic, when many people where stuck at home, global cigarette consumption has resumed its long-term decline. In 2024, Statista projects volumes to shrink by 0.4 percent. That still leaves a market of around 5 trillion cigarettes, however—and the vast majority of them will require a tipping paper.
Cigarette paper manufacturers are reconfiguring production processes to reduce their environmental impact.
By Stefanie Rossel
The effect of papermaking on the environment is considerable: According to Wikipedia, the pulp and paper industry is the world’s fifth-largest consumer of energy, accounting for 4 percent of global energy use. The sector uses more water than any other industry; producing 1 ton of paper requires an estimated 300 tons to 400 tons of water. Other issues include deforestation, greenhouse gas emissions, harmful chemicals and wastewater.
Driven by greater environmental awareness and stricter regulations, paper manufacturers have been moving toward more sustainable production practices. Tobacco Reporter spoke to leading players in the cigarette paper business about their strategies to reduce the environmental footprint of their operations.
Photo: BMJ
Reduce, Reuse and Innovate
Liem Khe Fung
Based in Indonesia, BMJ is the world’s No. 3 cigarette paper producer, supplying about 10 percent of global requirements. BMJ Innovation Center Director Liem Khe Fung is convinced that without a sustainability strategy, a company won’t survive the next 10 years to 15 years. Therefore, BMJ has adopted a strategy of “reduce, reuse and innovate.”
“First, we reduce energy consumption,” explains Liem. “Second, we reuse or recycle water from the production line to minimize the use of water from the river. We also select the chemicals used in the production carefully to minimize their impacts to the environment. Finally, we intend to replace plastic-based materials with paper/pulp-based materials, for example, replacing plastic[-based] or metalized-based packaging with paper-based packaging that is safe for the environment yet has the same functionalities.”
Paper machines consume huge amounts of energy. To reduce that consumption, BMJ replaced energy-hungry machine parts, such as the motors that drive the rolls, with more efficient parts. By generating and feeding exactly the right amount of steam to the drying drums, BMJ reduced waste. The company also captured part of the carbon dioxide (CO2) emissions from its coal boiler and used them to produce calcium carbonate (CaCO3), a key chemical in papermaking. According to Liem, using CaCO3 in liquid form saves much energy because it eliminates the need to transform the chemical into a powder for transportation.
Such actions have enabled BMJ to reduce its energy consumption by about 15 percent in just a few years.
Papermaking also requires lots of clean water, an increasingly scarce resource. Water accounts for up to 99.9 percent of the material mixture in the web-making process. Water is also used to generate steam to dry the web or paper. To reduce water consumption, BMJ modified its No. 3 paper machine to recycle water back into the production process several times before sending it to wastewater treatment.
Currently, BMJ derives 20 percent of its water requirements from recycled water. The company aims to use 50 percent recycled water by the end of 2023.
Looking ahead, BMJ hopes to install renewable energy systems, such as solar panels, by 2023. “We also would like to replace some of the coal used in our boiler with biomass,” says Liem.
Papermaking requires large amounts of energy and water. (Photo: Jose Luis Stephens)
Own Your Power
Vincent Li
Creating an in-house green energy supply is also at the heart of Hengfeng Paper’s sustainability strategy. With 21 production lines and an annual production of 230,000 tons, the Chinese manufacturer of cigarette paper, plug wrap and tipping base is an industry giant.
The company, which celebrates its 70th anniversary this year, recently published a carbon footprint status and emission reduction action plan designed to meet government requirements. In September 2020, President Xi Jinping announced that as part of the country’s 14th five-year plan, China would strive for peak CO2 emissions by 2030 and carbon neutrality by 2060.
Due to its level of development, China’s primary energy demand is expected to increase to 6 billion tons of standard coal by 2030. The government aims to increase the proportion of power generated by clean energy sources to 59 percent by 2030 and 86 percent by 2050 while boosting the proportion of electricity generated by clean energy sources to 48 percent by 2030 and 83 percent by 2050.
To help China meet these objectives, Hengfeng plans to slash its carbon emissions by more than a third in eight years. The company will focus its efforts on improving the efficiency of power and steam acquisition, as a carbon footprint analysis identified these activities as the major contributors to the company’s global warming potential.
Among other initiatives, Hengfeng plans to build a 10 MW photovoltaic power plant. The company has already signed cooperation agreements with partners and is currently preparing for construction, according to Vincent Li, sales manager at Hengfeng Paper’s Export Department II. Upon completion, the facility will generate up to 1,000 kWh, which will be fully used for paper production.
To recover energy, Hengfeng will deploy cogeneration technology, which involves the thermodynamically efficient use of fuel. “In traditional power production, some of the energy must be discarded as waste heat, but in cogeneration, some of this heat is put to use,” explains Li.
“Hengfeng makes full use of low-pressure steam after power generation for paper drying to achieve the purpose of maximizing energy utilization,” he says. The company fully recovers and utilizes the heat of the condensed water generated by the paper web drying process. It also plans to install high efficiency heads on the water pipe for washing. “We will promote high-pressure cleaning of the Fourdrinier* sections, thus improv[ing] the cleaning efficiency and sav[ing] the washing water by mobile spray and increasing the spray pressure,” adds Li.
Hengfeng has also been working on reducing its carbon footprint in CaCO3. “Hengyuan biochemical company, the calcium carbonate supplier [for] Hengfeng, introduced German process technology in 2017 and introduced the flue gas of Hengfeng’s thermal power plant into the reactor through an overhead pipeline,” says Li. “It uses quicklime and carbon dioxide in the flue gas to generate light calcium carbonate, comprehensively utilizes the carbon dioxide in the flue gas and reduces the carbon dioxide emissions. The annual comprehensive utilization of carbon dioxide in the flue gas is about 22,000 tons.”
To reduce fresh water consumption, Hengfeng has expanded the volume of its storage tank and increased the share of recycled water, among other measures. “We also introduce, popularize and apply new water-saving technologies and carry out a water-saving inspection every month to ensure that water-saving targets are achieved,” says Li.
SWM’s Quimperlé facility in Brittany, France. (Photo: SWM)
A ‘Thinner’ Impact
Marc Bettoli
SWM, a provider of engineered fine papers with expertise in natural fiber-based solutions, has launched a new initiative called “Thinpact” that regroups its different actions across its engineered paper division.
The company aims to set an example for the industry by researching and developing sustainable processes and solutions while being authentic and transparent about the process.
For the 2020–2030 period, SWM wants to reduce the CO2 emissions of its engineered papers business unit by 40 percent and its water withdrawal volumes by 25 percent.
“Reducing our impact is a complex process to which SWM is fully committed,” says SWM ESG Manager Marc Bettoli. “We decided to act step by step, starting with energy and waste. The first step for the reduction of carbon emissions is a program launched on Scope 1 and Scope 2—direct and energy-related—emissions. We have designed a sufficiency plan in order to get the right setting on paper machines. For instance, the drying temperature is set differently depending on the reference produced on the machine. We have also developed a plan to run the most efficient assets for the needed usage. For instance, we choose a pump with the best power, yield or technology, or we recover all possible heat from steam. The third step is the use of renewable sources of energy. For instance, we will add renewable electricity in the power mix.”
SWM has reduced its CO2 intensity—that is, the CO2 equivalent emissions per metric ton of goods produced, Scopes 1 and 2—by 11 percent between 2020 and 2021. At its largest site, Quimperle in France, the company has saved 3 percent of energy consumption year to date.
Waste reduction is also on SWM’s agenda. At Quimperle, the company plans to reduce landfill waste by 30 percent in the first year of a pilot program through internal incentives and education, waste assessment and waste valorization.
In addition to Quimperle, SWM has two other paper mills in France. This summer, France experienced the impact of climate change firsthand through a historic drought.
At the time of writing, the company’s French sites had not yet been impacted by water scarcity. “We are monitoring water levels on all sites with environmental managers at the sites, and we are in close contact with administration to [make] decisions if needed, especially in times of crisis,” says Bettoli. “We have implemented water recycling modes that were prepared for a long time. With the specific program on water management in order to reach or exceed our minus 25 percent goal for 2030, we will be prepared for upcoming historic droughts.”
Some of SWM’s energy comes from biomass. In Le Mans, for example, a biomass boiler produces steam. “We have developed a plan to roll out biomass boilers on other papermaking sites by 2030,” says Bettoli. “We are currently studying possibilities to add renewable electricity in our power mix, with the ‘Virtual Power Purchase Agreement’ approach.”
The company has also installed several energy recovery processes in its mills. The Quimperle plant, for example, both produces and burns black liquor, a byproduct of pulp processing, for energy recovery. SWM uses heat exchangers to recover energy losses of air and hot water and heat from production processes to heat its offices and buildings. It has also implemented hood closures and automatic controls to limit losses such as exhausted air.
By reusing excess water from the paper machines for dilution in the stock preparation area, the company reduces water consumption. For that purpose, SWM has implemented a fiber recovery system.
Bettoli says the company is also reshaping product design to support the development of new products that have a lower overall impact. “This approach is included in our R&D processes,” he says. “We have developed an eco-scorecard, and we are looking forward to collaborating with the industry to reduce the impact of our activities together. One recent example is the Evolute filter media product range, which is paper for filters to replace standard acetate within filters.”
*Modern papermaking machines are based on the principles of the Fourdrinier Machine, which uses a moving woven mesh to create a continuous paper web by filtering out the fibers held in a paper stock and producing a continuously moving wet mat of fiber. This is dried in the machine to produce a strong paper web.
Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.
