Tag: Schweitzer-Mauduit International

Making Their Mark

Illustration: BeMade
RYO and MYO products continue to present remarkable opportunities to the companies supplying these segments.
By George Gay
It has long been debated whether smokers choose roll-your-own (RYO) products over factory-made cigarettes simply because they can save money that way or whether there are other factors in play, most of which revolve around the idea of product customization. One thing that seems certain, however, is that if some smokers want to customize their RYO cigarettes, now is a great time for them to get creative. The product combinations that are possible by putting together the huge range of papers, filters and tobacco now available must be immense and growing.
This is not to say that RYO is about to experience a boom; taxation and regulation will not allow that to happen. But this category, being lifted by the current cost-of-living crisis affecting many people and by the legalization of recreational marijuana use in a growing number of jurisdictions, is likely to punch above its weight for some years to come.
Here, we look at the state of various aspects of the RYO and make-your-own (MYO) sectors: machinery, papers and filters.
Machinery
Anne Laure Jaeckel
Although many cigarettes are hand rolled mainly as a way of saving money, whenever I think of the hand-rolling process, I imagine somebody involved not in an economic activity but in an artistic undertaking. This idea might be a little romantic, however, given that many hand-rolled cigarettes appear less than beautiful, so perhaps I am talking more of a craft than an art, an activity akin to constructing dry stone walls or making hurdle fences, which are often beautifully irregular and, in certain instances at least, economically necessary.
Of course, there is something highly misleading in all this because, unlike the people making dry stone walls and hurdle fences, who are working with crude materials, the person hand rolling a cigarette has in her hands elements that have been produced using advanced designs and technology—elements such as ideally formed, long-stranded fine-cut tobacco and papers and filters fine-tuned for the individual’s preferred choice of cigarette.
And what often gets forgotten is the technology that goes into producing those tiny booklets of hand-rolling papers. They might look simple and insignificant, but the processes necessary to produce them are far from it. Where bobbins of paper have not been pre-gummed, they must have glue applied to one side, they must be cut to length, interleaved, packed into booklets and the booklets included in multi-packs.
And I must confess that, in describing this process, I have paid too little attention to part of the undertaking that is technically challenging: interleaving the cut papers. I was reminded of this when Luc Van de Perre, the founder and owner of BeMade, described how his company had a patented interleaving method, ReadyToRoll, which ensures that when individual leaves are pulled by the consumer from the booklet, the gummed side of the paper always comes out pointing upward. At present, says Van de Perre, 99 percent of paper booklets deliver alternate leaves gummed-side up and then gummed-side down, so half must be turned over by the consumer.
Does this matter? I think it does, if for no other reason than it allows a smoker with impaired vision, who has misplaced her spectacles or is in conditions where the light is poor, to roll a cigarette with confidence. It provides, also, the assurance that she is not going to waste a paper or, even worse, lick the wrong side of a lightweight paper, which will cause it to stick, but only up to a point—that point probably being when the cigarette is lit.
It also demonstrates that even in what some might regard as a backwater segment of the tobacco industry, attention is being paid to the smallest details. The smoker of hand-rolled cigarettes is being treated as important.
In fact, such attention to detail is now at the forefront of BeMade’s activities. The company, which was founded in 2005 and which has a background in booklet production, used that manufacturing experience to develop a fully flexible maker/packer that can produce a full range of booklet formats and pack them in a variety of display boxes. But Van de Perre said that whereas his company had in the past taken machinery projects from start to finish, it was now concentrating on machine developments and installations while working with a bigger partner company in building the machines.
BeMade has also come up with a service strategy recognizing that while its booklet-producing customers are geographically widely spread, it is operating in a relatively modest segment. “Our target is to make sure our customers, booklet producers, get all the tools needed to organize service and maintenance operations in-house or through local support,” said Van de Perre. “This means also that we are prepared to sell the know-how necessary to make our customers independent. All new customers are provided with whatever is necessary to make them self-supporting, though we can also support them via direct web connections to their machines.”

Photo: SWM
Paper
Of course, to produce booklets, you need paper, and, asked about the main RYO market drivers, a spokesperson for SWM and Botani, Anne Laure Jaeckel, product manager of rolling papers at SWM, said the past few years had been all about product research and collaborative developments as their customers had focused on delivering to consumers the best smoking experiences by offering them thinner and lightweight papers. Another important trend had been delivered through developments in botanicals, especially hemp, which had become an essential material in a matter of a few years. In the future, the transparency of papers would be a key feature while the provision of new and exciting colors would also take center stage.
SWM and Botani comprise the Engineered Papers division of Mativ, with SWM serving the tobacco industry and Botani serving the emerging global cannabinoids market.
One question that arises is whether RYO has a future given the array of next-generation tobacco and nicotine products that have emerged recently and given people’s apparent tendency to embrace new technology generally. But Jaeckel seemed unconcerned. While, as always in business, things were changing, this did not signal the end, she said. The change being brought in by the trend toward the legalization of the recreational use of cannabis in many countries was a positive, leading to, among other things, an increase in demand for rolling papers and pre-rolled cones, especially in the U.S. All that was needed now to take things forward in a sustainable way was the introduction of uniform legislation governing product standards.
But some things would remain largely unchanged. For some consumers, RYO had always been and would remain just what they needed—a widely available and cost-effective product. Rolling papers had been invented in the 19th century, and, in part, it was the proof of the product tied up in this history that appealed to many consumers, something to which SWM could attest since its factory in the south of France had been active for 150 years and had witnessed the launch of one of the first rolling paper brands, JOB.
Generally and historically speaking, wood-based bleached materials have gone into making tobacco rolling papers, but Jaeckel said that customers looking to the cannabis market were preferring thin, unbleached, colored or hemp-based papers. Of course, the market for papers, while being strongly influenced by consumer preferences, was also governed by legislation, she added.
The base paper for rolling-papers, Jaeckel said, was supplied in rolls, bobbins and reams, depending on the converting capabilities of customers and on end use applications—for instance, interleaved or flat booklets, or even pre-rolled cones and MYO tubes. All grades of paper could be offered pre-gummed and with filigree patterns, which, along with color options, provided for a wide variety of brand differentiation. And for companies that were only brand owners, SWM and Botani could supply their paper through a network of partner converters capable of transforming it into the required forms.
The range of experiences on offer to the consumer is certainly huge. Indonesia-based The Rolling Paper Company (TRPC), for instance, offers worldwide a wide range of papers, including those made from bleached wood, unbleached wood, unbleached hemp, alfalfa and bamboo. Papers can be watermarked, printed or colored, and the company’s offer also includes blunts, cones and printed cones, all manufactured under one roof using machinery and paper imported from Europe.
TRPC, which has been in business since 2008, produces its own papers under brand names such as SmokeBox but also contract manufactures for other companies.
Ashwyn Daryanani, the founder and owner of TRPC, is confident about the future. In reply to emailed questions, he said the main drivers of the rolling paper business in recent times had been the legalization of the recreational use of marijuana in various jurisdictions and the rising prices of factory-made cigarettes just about everywhere. And, he added, the trends toward the legalization of marijuana use and rising cigarette prices would continue in the future, boosting demand for rolling papers.

Photo: Filtrona
Filters
While Filtrona identifies consumer economics as being the key driver for the MYO category, it sees product customization mainly driving the RYO sector. And the company, which develops and manufactures filters for all types of smoking products, including both the categories under review, predicts that two main factors will drive the RYO/MYO market for the next two years to three years: product customization, and sustainability in respect of both filters and packaging. RYO smokers would be drawn to innovative filter shapes, formats and additives, said Hugo Azinheira, global director of innovation and ESG [environmental, social and governance]. At the same time, there would be a growing need for customized packaging that was more sustainable and that delivered improved product freshness when compared with what was on offer now.
The second driver, meanwhile, meant it was vital for Filtrona to extend its ECO range of filters to RYO/MYO and to work with its packaging suppliers to develop and introduce more sustainable packaging materials.
“The industry’s shift from acetate filters to more sustainable alternatives presents us with one of our biggest opportunities,” said Azinheira in an email exchange. “Our growing ECO range comprises more than 12 innovative plastic-free filters, providing solutions that address single-use plastic bans by using sustainable, biodegradable and plastic-free non-woven materials. All our ECO filters are suitable for use in RYO and reduced-risk product categories as well as ready-made cigarettes.
“We are also working with suppliers to develop and qualify new materials with a lower carbon footprint. We believe that it requires an industry-wide effort to support our customers in their ESG journeys; therefore, we are collaborating with a wide array of suppliers.”
Meanwhile, Azinheira said, because demand for both RYO and, especially, MYO tended to grow when adverse economic environments prevailed, the market for both had been relatively stable during the past five years to six years. But with MYO being a more volatile category, there was higher growth potential in RYO, though both were expected to remain niche categories.
Overall, the RYO and MYO categories would follow the main industry trends, including in respect of the growing cannabis category in North America, for which special filters were being developed and commercialized. While RYO would remain a niche product, demand for it would grow in markets where hemp and cannabis were legalized, but it was important to keep in mind that, within the EU, the new Tobacco Products Directive would impact these new categories.
George Gay is Tobacco Reporter’s European editor, but his territory spans the globe. Based in London, George has covered the tobacco industry since 1982, initially for a U.K.-based publication and since 2004 for Tobacco Reporter. George’s understanding of industry issues, combined with his keen sense of observation and dry wit, have earned him a loyal following among Tobacco Reporter’s readers.

August 1, 2023
Mativ Results Impacted by ‘Tough’ Quarter

Photo: SWM
Mativ Holdings reported sales of $679 million in the quarter of 2023, up 66.9 percent from the comparable 2022 period. The company attributed the increase to the benefits from the July 2022 merger between Schweitzer-Mauduit International and Neenah, which created the holding. In a press note, it stressed that financial results for periods prior to the merger reflect only the legacy SWM results.
GAAP loss was $7.7 million and GAAP operating profit was $9.3 million, which all included merger integration and purchase accounting expenses. Adjusted Income was $13.7 million. For the engineered papers business, adjusted EBITDA decreased approximately $15 million, accounting for roughly two-thirds of total year-over-year EBITDA decline, mainly due to labor strikes in France and manufacturing inefficiencies.
Price increases more than offset the impacts of higher input costs, according to the company; however, lower volumes primarily from customer de-stocking and manufacturing challenges drove margin pressure
Mativ Holdings expects $25 million incremental synergy realization in 2023, with procurement and supply chain activities building upon 2022 operating expenses actions, The company also anticipated easing input costs to support sequential margin improvements
“The first quarter of 2023 was impacted by a combination of customer de-stocking across the business, operational inefficiencies in our French facilities, where we experienced a number of strikes in response to governmental actions related to social benefits, and inefficiencies in several U.S. sites,” said Mativ CEO Julie Schertell.
“We believe the key issues affecting first quarter margin performance will prove temporary, as customer indications suggest we are currently moving past the peak de-stocking impacts, and that more normalized volume activity should resume in the second half of the year.
“Further, we are starting to see improved manufacturing performance across the business, which we expect will translate into better margins as the year progresses. Despite a tough first quarter and some continued headwinds expected in the second quarter, we expect to exit 2023 on a strong trajectory toward $100 million EBITDA quarters.”

May 10, 2023
Step by Step

SWM has published a manual to help regional manufacturers quickly launch tobacco-heating products.
By George Gay
Bruno Stefani
Bruno Stefani told me recently that his company’s aim was to help other companies develop, manufacture and market heated-tobacco products (HTPs). This came as no surprise, in fact; he is, after all, the HTP manager of SWM’s Reduced-Risk Products division, so what he said was more or less a statement of the division’s raison d’etre. But he went on to explain that the division’s focus was on regional cigarette manufacturers that had previously not entered the HTP market and that the aim was to have them launch products within 18 months to 24 months while continuing to operate in much the same way as they do when manufacturing combustible cigarettes. Each step of the process seems to have been designed with simplicity in mind and with the focus on targeting HTP products aligned with individual manufacturers’ brand profiles. Now, given the history of HTPs, which overall and until recently comprised about 30 years of market tests and failures, news of such a straightforward, rapid and all-encompassing offer did come as something of a surprise.
When the first commercially successful HTP products started to appear on the market, there was a veil of secrecy around them that most of us could penetrate only dimly. Of course, the veil started to lift as these products came under the scrutiny of those who were more qualified than most of us to figure out why they had been designed as they had been and how they performed as they did. And it started to lift further as the interests of those manufacturing these reduced-risk products were aligning with the release of information that was likely to increase their marketability in the eyes of consumers and, potentially, regulatory authorities.
It is not surprising, therefore, that now, much information about HTPs can be gleaned from the internet, though, I would suggest, it is surprising that it is possible to visit a website that outlines the way in which anybody interested in these once obscure products and with the necessary financial backing can be guided, from concept to marketplace, through the steps needed to become a manufacturer and supplier of such products. But, in fact, SWM, which has much expertise in the components that come together to make up an HTP, provides on its website a white paper that does just that.
The white paper, which is clear and concise, includes, in addition to an introduction and executive summary, chapters on what companies need to know before launching an HTP and dealing with an overview of the HTP market; eight reasons to make the leap into HTPs; overcoming obstacles; designing the heating device; designing the stick; building a blend; risks and regulations; and HTPs and the environment. There is also a chapter on expert solutions, and it is worth mentioning that SWM has invested €12 million ($12.88 million) in heat-not-burn R&D since 2013, as part of which it has assessed more than 40 different single tobacco grades under aerosol conditions. It has developed a unique puff-per-puff aerosol analyzer; it has presented at Coresta three scientific studies on HTPs; and, overall, it has more than eight years of HTP scientific and manufacturing expertise behind it.
Stefani told me during a telephone interview in early March that SWM offers a four-step process for developing and marketing an HTP from scratch. At its heart, the process involves providing a customer with know-how and access to ready-made components while avoiding tricky patent issues. The first step, discovery, is the one in which SWM demonstrates to a potential customer the workings and benefits of a number of HTP products. The second step, validation, involves a proof of concept in which characteristics, such as the taste profile and nicotine delivery level, are finalized in respect of a prototype.
The third step, industrialization, deals with how to manufacture and maintain the quality of the consumable sticks using the assets already available to the manufacturer. And the fourth step, the future, concerns preparing, immediately after launch of the first HTPs, the next generation of such products, which need to be placed on the market about every six months to keep the product portfolio looking fresh but which might involve only minor brand extensions.
To ensure a fast HTP development phase, SWM’s process is built around an already designed device and consumable stick. The device, which has been designed and would be manufactured by a third party with which SWM has worked and to which it would provide introductions, uses an “external” or oven system to heat the aerosol-generating material rather than an “internal” blade or pin. Choosing the external rather than the internal heating system reduces hugely the investment required because, whereas in the case of the latter, a greenfield plant must be constructed, the former allows a manufacturer to use, perhaps with minor modifications, its existing machinery. The third-party device supplier owns the patent to the device and ordinarily would be responsible for the after-sales obligations that attach to the supply of such electronic equipment.
At the same time, SWM can provide introductions to a filters company and to a machinery company in the case that modifications must be made to equipment while it is able to supply the consumable stick’s reconstituted tobacco for which it holds the patents.
But, in the end, it is down to the customer to mix into its primary department the reconstituted tobaccos specifically designed for HTP applications and other materials to produce personalized blends, much as it would do when making combustible cigarettes: adding other components, such as casings and flavors and even other reconstituted botanicals that, again, are designed specifically for HTP applications and that can be supplied by SWM. And it is, of course, down to the customer to sign off on the sensory experiences provided by the product.
Staying Competitive
Although the process sounds straightforward, the question arises, I suppose, as to why regional players should become involved in HTPs and if they should become involved, why, in general, they haven’t so far, even though, in conversations with Stefani, many have expressed considerable interest. There are at least three answers to the second question, one of which has to do with the disruptions caused by the Covid pandemic. Another reason has to do with some manufacturers already being involved in other projects that have left them for the time being without the resources necessary to embrace HTPs. And for some, there is no sense of urgency in moving to HTPs because, with the major manufacturers concentrating on new-generation products, the regional players are performing well on the market for combustible cigarettes and have not felt the chill wind of decline.
But it seems likely that if these regional players are to stay competitive in a world where combustible cigarettes are giving way to new-generation products of various kinds, they will need to get on board with HTPs and probably sooner rather than later. SWM says the combustible cigarette market is suffering a steady attrition that amounted to an estimated compound annual growth rate (CAGR) of about minus-4 percent between 2016 and 2022. Over the same period, HnB products enjoyed an estimated CAGR of about 70 percent, and, in some countries, the market share of HTPs was above 10 percent by the end of 2022. Within the EU, where most but not all of the target regional manufacturers operate, the cigarette/HnB transfer rate between 2016 and 2020 was plus-35 percent, meaning that for every 100 cigarette sales lost, HTP sales grew by 35 sticks.
Further, SWM estimates that the overall HTP CAGR between 2021 and 2027 is likely to be 15 percent to 20 percent while the CAGR for HTPs using external heating systems will be about 20 percent to 25 percent given that they are starting from a lower volume base.
Of course, confidence in the future for these devices is provided by the fact that, in many markets, they stand at a tax discount to combustible cigarettes, providing a potential retail price advantage that, in the case of HTPs with external heating systems especially, is bolstered by the relatively low cost of manufacturing disposable sticks. Such confidence must also be seen in the context of the investments that have been made in them and that is continuing to be made in them by the major players. And it is likely, too, that the entry into this market segment of regional players will build product exposure and market momentum.
The case for HTPs can be argued from a negative perspective as well. If a consumer of a regional player’s combustible cigarettes decides she wants to move to a less risky product, she will move to the product of a competitor if the regional manufacturer doesn’t offer a suitable product. And this would be an avoidable loss for the manufacturer in question. While it is not possible for a manufacturer to develop HTPs that exactly mimic the characteristics of its combustible brands, it can get close enough to present devices as new formats offering fresh experiences. This product/brand continuity, if you like, is important because while a consumer might be looking to move to a less risky product, she probably wants, too, to move to one manufactured by a company she already trusts.
George Gay is Tobacco Reporter’s European editor, but his territory spans the globe. Based in London, George has covered the tobacco industry since 1982, initially for a U.K.-based publication and since 2004 for Tobacco Reporter. George’s understanding of industry issues, combined with his keen sense of observation and dry wit, have earned him a loyal following among Tobacco Reporter’s readers.

April 1, 2023
Mativ Holdings Reports Results

Photo: SWM
Mativ Holdings reported sales of $660.1 million in the fourth quarter of 2022, up 69 percent over those reported in the comparable 2021 quarter, reflecting 6 percent constant currency organic sales growth and the benefit of the merger between Neenah and Schweitzer-Mauduit International that created the holding. GAAP Income was $2.5 million and GAAP operating profit was $26.9 million, which all included significant expenses related to the Neenah merger integration.
For the full year 2022, sales increased 51 percent to $2.17 billion, reflecting 11 percent constant currency organic sales growth and the benefit of the merger. GAAP loss was $6.6 million and GAAP operating profit was $51.4 million, which all included significant expenses related to the Neenah merger closing and integration.
“2022 was a historic year for Mativ, bringing together two strong companies to leverage our combined technologies and products to drive value for all of our stakeholders,” said Mativ Holdings CEO Julie Schertell in a statement. “We closed out the year with strong year-over-year fourth-quarter growth for the combined company from continued positive price/cost performance, and we enter 2023 with clear momentum on integration and synergy execution.
“Despite macro uncertainties, our conviction in the opportunities ahead for Mativ is unwavering. We have significant controllable actions to enable strong performance as we enter 2023, specifically cost synergies, innovation and programs focused on commercial and operational excellence, as well as broader, longer term decisions and actions to capitalize on our increased scale.”
February 27, 2023
Cleaning Up

Photo: SWM
SWM’s new fiber-based filter media takes the plastic out of the cigarette.
By Stefanie Rossel
In addition to the health hazard they pose to users, combustible cigarettes also threaten the environment. Cigarette butts remain the most littered item on earth. According to World Health Organization estimates, 4.5 tons of cigarette filters are discarded in our planet’s natural habitats and waterways each year. Made from cellulose acetate (CA), cigarette filters take up to 18 years to disintegrate.
However, there is hope. In the tobacco industry’s move toward less harmful nicotine-delivery systems, sustainability plays an increasingly important role. In addition, the industry got a regulatory push toward using more environmentally friendly filters when the European Union introduced its Single-Use Plastics Directive in 2021.
The directive bans selected single-use products made of plastic for which alternatives exist on the market: cotton bud sticks, cutlery, plates, straws, stirrers, sticks for balloons, as well as cups, food and beverage containers made of expanded polystyrene and all products made of oxo-degradable plastic. The extended producer responsibility legislation, scheduled to come into effect in January 2023 for tobacco filters, appears to be behind schedule.
And there is more regulation to come: In March 2022, members of the United Nations Environmental Assembly agreed to propose by 2024 a legally binding treaty to end plastic pollution that includes the marine environment. Cigarette butts are the most common plastic litter on beaches. They represent a hazard for marine life as animals can ingest the trash, exposing them to harmful chemicals. These can also make their way up through the food chain, threatening human health on a global scale.
To help tobacco customers reduce the environmental impact of their products, SWM in June launched Evolute, a range of fiber-based filtering media that can replace CA in filters. Depending on the environment, filters made from Evolute degrade in a few weeks. In October, Germany’s technical inspection association TUV granted “OK biodegradable soil” and “OK biodegradable marine” certifications to Evolute.
Full Support Package
The new filter media are part of SWM’s ongoing efforts to provide its customers with alternative sustainable solutions and support, says Alice Jaussaud, product manager for Evolute filtering media at SWM. “We are going beyond the filter media themselves, offering the full support to design a cigarette with the purpose to work with customers and offer our expertise to the tobacco industry in its transition,” she says.
The company already has a natural fiber filter solution on the market, according to Cedric Rousseau, SWM’s tobacco solutions research, innovation and development director. Several big company brands use paper filters. “Paper behaves differently than cellulose acetate, so it calls for some adjustment in terms of design of the filter and the cigarette,” says Rousseau. “This is where SWM as a supplier of various materials to the industry can provide support to its customers to properly adjust the filter media and design of ventilation, filters and characteristics of the cigarette.”
While the company’s most recent development has just been introduced, SWM is already working on the next generation of alternative solutions. “The idea is to use the filter solution as a plug-and-play solution as compared to CA media,” says Rousseau. “Our vision is to offer the industry a wide range of different plastic-free media products so they can play depending on the market, the regulations and the consumer expectations in terms of sensory profile and taste.”
The Evolute range includes industrial and scalable products with proven filtration performance, filter pressure drop stability and perfect fit to crimped filter makers, according to SWM. In addition to conventional cigarettes, they are suitable for filter tips for roll-your-own, make-your-own, cigarillos and heated-tobacco products (HTPs), says Jaussaud.
The company has an R&D group focusing specifically on HTPs. “The filter of an HTP has a different role than that of a combustible cigarette,” says Rousseau. “Some HTP filters are more for the cooling, others for the filtration of the aerosol. With the dedicated group, we have a better understanding now.”
Drawing on its expertise with papers for the tobacco industry, SWM partners not only with companies that develop filters but also with filter-making equipment manufacturers.
Sustainable Plug and Play
The often-used argument that CA is the gold standard in terms of filtration properties and smoke chemistry may soon be outdated, according to Rousseau. At its Le Mans site, SWM has set up a sensory group to evaluate consumables for HTPs and combustible cigarettes. “Biodegradability and the environmental impact are important, but taste and tar retention are obviously important as well,” says Rousseau.
“We have observed that our standard paper filter that has been on the market for some time needs to be properly used because it has an impact on tar retention. Consequently, tar retention also has an impact on taste where we must develop the right design. The next generation of filtering media we’re currently working on should have the same performance, taste and experience as well as the same physical attributes as a CA but is paper based.”
Instead of a mere substitute for CA filters, SWM aims to provide an alternative with additional features, such as sustainability, Rousseau emphasizes. He is confident that the consumer is ready for such changes. “We are moving away from wanting to have something that behaves and tastes like CA filters to something that we believe consumers will be looking for in the future. We provide a lot of value with biodegradable cigarettes,” he says.
The EU Single-Use Plastics directive has been a clear catalyst accelerating the change to plastic-free filter alternatives, notes Jaussaud. However, she sees demand beyond the EU when talking to her customers. “Similar regulations are under discussion in the U.S., Canada, Australia and other countries,” says Jaussaud.
“What started as a regulatory push now looks more and more like a consumer demand,” she explains. “Consumers don’t want to see cigarette butts on the beach anymore, and they think it would be good to have something with less pollution. They are looking for such solutions, and manufacturers are considering that beyond regulation.”
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.

December 1, 2022
Mativ Sales Up 76 Percent

Photo: SWM
Sales of Mativ Holdings increased 76 percent to $674.1 million in the third quarter of 2022, with 12 percent constant currency organic sales growth, or 7 percent organic growth including negative currency impacts, the company announced in a press note.
Strong sales growth in release liners, protective solutions, filtration, and paper and specialty packaging led the portfolio, according to the company, which was created in July following the merger between Schweitzer Mauduit International and Neenah.
Pricing actions drove top-line gains while offsetting raw material cost increases, with margin expansion across most categories. Macro trends such as negative currency changes, increasing global economic uncertainty and European energy inflation impacted results, as did a cybersecurity incident unrelated to the integration of the Neenah merger during the quarter
Fiber-Based Solutions segment sales were $248 million, up 101 percent, and reflect the merged company results versus the prior year period, which reflected only legacy SWM results. Organic sales growth was 7 percent, or 12 percent excluding negative currency impacts, driven primarily by price increases, and comparable adjusted operating profit increased 6 percent. Double-digit sales growth in packaging and specialty papers led the portfolio. Price increases exceeded inflationary pressures for the segment.
“Mativ delivered organic constant currency sales growth of 12 percent in the quarter, with most business areas delivering increased price, revenue and margin,” said Mativ CEO Julie Schertell. “On a comparable basis, adjusted operating profits were up nearly 25 percent. Our merger integration is progressing well, and we are executing on our $65 million cost synergy plan. Based on current performance, we now expect to exceed our previously communicated $20 million synergy run-rate exiting 2022.”
November 10, 2022
Mativ Reports Second-Quarter Results

Photo: SWM
Mativ Holdings, the company that was recently created out of the merger between Schweitzer-Mauduit International (SWM) and Neenah, reported earnings results for the three months ending June 30, 2022.
Including SWM legacy results, sales increased 13 percent to $426.4 million. Organically, sales grew 11 percent with strong demand and pricing actions across the business, driving top-line gains and offsetting cost increases.
“With the completion of our merger in early July to form Mativ and the close of a strong second quarter for the legacy SWM and Neenah businesses, we are poised to carry our momentum into the rest of 2022 as a unified and more scaled global leader in specialty materials,” said Mativ Holdings CEO Julie Schertell in a statement.
The company’s Engineered Papers segment sales were up 10 percent, to $138.3 million, driven by volume growth and price increases. Volumes benefited from broad-based gains across the portfolio, highlighted by continued rapid growth in heat-not-burn reduced-risk products.
GAAP operating profit was $22.4 million, down 7 percent. Adjusted operating profit was $21.5 million, down 19 percent. While contractual and market price increases and negotiated volume gains more than offset higher pulp and other material costs, operating profit and margin percentage reductions resulted mainly from rapidly escalating energy costs, particularly in Europe.
Mativ Holdings expects semi-annual contractual price increases, additional market price increase and surcharges to mitigate the impacts of escalating pulp and energy costs during the second half of the year.
August 11, 2022
SWM and Neenah Complete Merger
Mativ Holdings today announced the completion of the merger of equals between Schweitzer-Mauduit International (SWM) and Neenah, two leading global manufacturers of specialty materials, effective July 6, 2022.
Mativ has approximately $3 billion in sales, supporting customers in more than 100 countries, and manufacturing capabilities on four continents. Beginning Wednesday, July 6, 2022, the company will commence trading on the New York Stock Exchange, under the new ticker symbol MATV.
“I am extremely excited and proud to mark this important milestone in the journey of our two companies with the formation of Mativ, said Julie Schertell, president and CEO of Mativ, in a statement.
“This merger is a unique opportunity to boldly reimagine our future as a stronger and faster-growing global enterprise. As we come together, we see significant near and long-term value creation opportunities to accelerate growth and amplify margins. With compelling strategic touch-points in key market categories, complementary geographies and technologies, increased global scale, and a passionate workforce with deep roots in material science, we are ideally suited to help solve our customer’s most critical challenges, which is the foundation of our cultural, commercial and financial success.
“As we bring the best of these two organizations together, our priorities are centered around supporting our customers, accelerating our growth, delivering the $65 million, or more, of deal-enabled cost synergies, and driving margins and cash flows to support deleveraging and a strong dividend. We will also continue to execute our strategy, including investments in our fastest growing and most profitable business units and decisive actions to optimize our portfolio over time. Mativ has tremendous potential, and, as we celebrate this new beginning, I want to recognize the efforts of our outstanding employees who work tirelessly every day to push the limits of what is possible.”

This merger is a unique opportunity to boldly reimagine our future as a stronger and faster-growing global enterprise.
Julie Schertell, president and CEO, Mativ
“Today marks an exciting new chapter in the rich histories of both companies, forming a scaled global leader in specialty materials to drive value for customers, employees, stakeholders, and our shareholders,” said John Rogers, chairman of Mativ’s board of directors. “We will continue executing a well-defined strategy, maintain an attractive financial profile, and advance our corporate stewardship and governance efforts. Mativ is committed to providing attractive returns to shareholders while maintaining a prudent balance sheet and disciplined approach to capital allocation. We have assembled an exceptional, diverse, and experienced leadership team, and we look forward to working with Julie and her talented group of leaders to deliver on the promise of this transaction.”
Mativ will disclose financial results for two reporting segments: advanced technical materials (ATM) and fiber-based solutions (FBS). The ATM segment is comprised of five non-reporting business units: filtration, protective solutions, release liners, healthcare, and industrials. This segment generally represents the combination of SWM’s legacy advanced materials and structures and Neenah’s technical products reporting segments. ATM will deliver solutions that filter and purify air and liquids, support adhesive and protective applications, advance healing and wellness, and solve some of material science’s most demanding performance needs.
The FBS segment is comprised of two non-reporting business units: engineered papers and packaging and specialty paper—and represents SWM and Neenah’s respective legacy paper segments. FBS will leverage the combined company’s extensive natural fiber capabilities to provide specialty solutions for various end-uses, including sustainable packaging, imaging and communications, home and office, and consumer goods, among other applications.
For the second quarter of 2022, Mativ will report financial results for legacy SWM and select financial and business highlights from Neenah.
July 6, 2022
Botani Launches Tobacco-Free Wrappers

Photo: Botani
Companies looking for a more sustainable, tobacco-free and cost-effective alternative to traditional foil wrapped blunt wraps now have a new option: Botani Gummed Wrappers.
The new gummed wrappers offer a wide range of benefits over their traditional tobacco counterparts. Traditional blunt wrap papers come in single-use foil packages to keep them from drying out. Botani’s gummed wrappers are made using proprietary technology that does away with foil packaging for a more sustainable and cost-effective cannabis smoking experience. The wraps are ideal for blunt applications and moisture optimized for slow burning, safe storage and an extended shelf-life.
“The technology behind Botani’s natural hemp flower gummed wrappers helps roll-your-own tobacco influenced brands make a seamless entrance into the cannabis market without adding costly new machinery or storage solutions. This makes our gummed wrappers the ideal product for brands looking to go to market quickly, cost effectively and efficiently,” said Alex Boone, managing director at Botani.

Our time-tested sustainable processes for reconstituting hemp into natural hemp wrappers lets our customers scale quickly without compromising the quality or consistency that their customers and cannabis connoisseurs have come to expect and appreciate.
Alex Boone, managing director, Botani
Botani gummed wrappers leverage proprietary technology to help manufacturers take advantage of a high growth market. Plus, gummed wrappers offer brands and cannabis connoisseurs a more sustainable and convenient on-the-go solution that takes blunt-rolling to the next level.
“Our time-tested sustainable processes for reconstituting hemp into natural hemp wrappers lets our customers scale quickly without compromising the quality or consistency that their customers and cannabis connoisseurs have come to expect and appreciate,” said Boone.
Botani is a premium hemp and botanical solutions business delivering innovative hemp wraps, fillers, and rolling/pre-roll papers to the natural fibers industry. As a part of paper milling pioneer SWM, Botani inherits over 400 years of history in paper and natural fiber technology.
June 17, 2022
Coming Clean

Photo: Yakiv
Stakeholders debate the challenges presented by cigarette litter.
By Stefanie Rossel
Cigarette butts are the most littered item on earth. The World Health Organization estimates that two-thirds of all smoked cigarettes are discarded into the environment. For 2021 when consumers smoked 5.21 trillion cigarettes, according to Euromonitor International, this corresponds to approximately 3.47 trillion littered cigarette butts.
Made of cellulose acetate (CA), a polymer that is slow to degrade in the environment, cigarette filters take up to 18 years to disintegrate. In addition, used cigarette filters are full of toxins, such as nicotine, formaldehyde, arsenic and ammonia, which can leach into the ground and damage living organisms that come into contact with them.
With regulatory pressure on single-use plastic (SUP) consumer goods increasing globally, tobacco companies hence face a new challenge: In a world where CA is still considered the gold standard for filters as far as smoking chemistry is concerned, they will have to find a way to make their products more sustainable. During a webinar staged in late April by Schweitzer-Mauduit International (SWM) and Essentra Filters, participants explored this and other challenges relating to cigarette filters.
Shane McGuill
Shane MacGuill, head of nicotine and cannabis at Euromonitor, said environmental sustainability was a double-edged sword for the tobacco industry, presenting both threat and opportunity and driven by a potent combination of consumer, investor and regulatory demand. According to his company’s research, 66 percent of consumers try to have a positive impact on the climate through day-to-day actions whereas 46 percent expect to be more worried about climate change in the future.
MacGuill predicted that more investors will look at sustainability in tobacco; presently, around 40 percent of MSCI ESG (environmental, social and governance) indexes exclude tobacco. Between 2016 and 2018, he noted a 30 percent compound annual growth rate of ESG integration.
In the tobacco and nicotine industries, product waste is one of the key drivers of sustainability legislation. The EU’s SUP Directive, introduced in 2021, emerged from a desire by European regulators to significantly reduce waste from cigarette butts by 2030.
It places extended producer responsibility (EPR), a reinforced application of “the polluter pays” principle, on cigarette manufacturers to mitigate the impact of discarded cigarette butts. The regulation, MacGuill pointed out, was likely to be replicated in other regions.
Supply chain integrity is another factor driving sustainability regulation; leaf cultivation is linked to environmental impacts such as deforestation, lack of crop diversity, chemical use and water utilization. Highlighted in the WHO’s 2017 report, these issues will likely attract increased scrutiny, MacGuill forecast.
The most environmentally damaging stage of the cigarette production process is manufacturing and supply, for which legislation thus far has been limited. MacGuill noted that major tobacco companies have significantly stepped up self-regulation and focused on reducing their carbon and energy use, aiming, for instance, to achieve net-zero carbon emissions from their value chains by 2050. Product waste ambitions, however, currently remain largely limited to packaging.
Increasing Awareness
Alice Jassaud
As end users, smokers play an important role in promoting sustainable cigarette consumption. A survey in Canada, Brazil, Germany, South Korea and France commissioned by SWM and Essentra Filters found that smokers generally are interested in sustainability, but only half of them know that filters contain plastic. Plastic content was overestimated in Germany while South Koreans underestimated it. Half of the smokers had a correct perception of the time needed for a plastic filter to decompose whereas South Koreans tended to overestimate it. According to the survey, filters were mostly dispensed in the trash or ashtrays in the countries investigated. Most smokers said they were willing to accept changes in the visual appearance of filters with accelerated biodegradability features. “There is a great opportunity for the industry to change tobacco products’ perception and their impact on the environment,” said Alice Jaussaud, product manager for filtering media solutions at SWM.
Hugo Azinheira
Hugo Azinheira, global innovation and marketing director at Essentra Filters, compared the biodegradability of various existing filters. In recent years, the industry has focused its R&D efforts on developing filters made of sustainable alternative materials. The sustainable filters used in the comparison, Azinheira said, were biodegradable while at the same time offering similar levels of performance and filtration as traditional materials.
Carried out according to ISO 14855-1, a protocol to evaluate biodegradability of plastics under controlled composting conditions, the test compared biodegradation to reference cellulose after 105 days. While 100 percent of the reference cellulose had decomposed after this period, only 8.7 percent of CA had disintegrated. The latter item was the only one still visible at the end of the test. The four samples made of alternative material all reached a biodegradation above 90 percent after 105 days.
Stricter Rules to Come
Frédérique Martinache
Regulation trends in the EU and beyond indicate that there is a strong political will on sustainability issues, said Frederique Martinache, product compliance senior specialist at SWM. Since 2014, the U.N. Environmental Assembly (UNEA) has been calling on states to address the environmental impact of marine plastic litter and pollution of SUP products. Regulatory approaches include imposing SUP bans, implementing taxes and/or economic incentives for sustainable alternatives, introducing EPR schemes and setting product standards and labeling requirements.
In March 2022, UNEA member states agreed to propose by 2024 a legally binding treaty to end plastic pollution on land and in the water. Cigarette butts are the most common plastic litter on beaches. They represent a major hazard for marine life as animals can ingest the trash, exposing them to harmful chemicals. These can also make their way up through the food chain, threatening human health on a global scale.
To promote the development of regulatory strategies that specifically address the impact of cigarettes on human health and the environment, the U.N. Environment Program has launched the Clean Seas campaign in which it partners with the Secretariat of the WHO Framework Convention on Tobacco Control (FCTC). Article 18 of the FCTC addresses protection of the environment and the health of persons in relation to the environment. This year’s WHO World No Tobacco Day focused on the adverse impact of tobacco cultivation and cigarette production and use on the environment, encouraging regulators to step up legislation, including implementing and strengthening existing schemes to make producers responsible for the environmental and economic costs of dealing with tobacco waste products.
In the EU, tobacco filters have been required since July 2021 to bear labels informing consumers about the presence of plastic in the products, means of inappropriate waste disposal and the negative impact of littering. By Jan. 5, member states must have set up EPR schemes to fund litter cleanup initiatives, awareness campaigns and data gathering and reporting projects. Innovation and product development to provide viable alternatives to filters containing plastics are encouraged. By July 3, 2027, the European Commission shall propose binding measures to reduce the post-consumption waste of plastic filters.
For the time being, the greatest regulatory pressure on filters comes from the EU and Norway, which has also implemented the SUP directive. But other jurisdictions are mulling measures as well. The U.K. Department for Environment, Food and Rural Affairs, for example, is considering the adoption of an EPR scheme. In the U.S., the Break Free from Plastic Pollution Act of 2021 intends to phase out throwaway plastics made from fossil fuel, hold the plastic industry responsible for its waste and pause construction on any new plastic-making plants. Apart from this federal legislation, there are a number of state initiatives. While Canada is contemplating regulation, the Australian government in 2021 launched the National Plastics Plan, which calls for an industry-led cross-sectoral stewardship taskforce to reduce cigarette butt litter in Australia.
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.

June 1, 2022