Exciting, though uncertain, times lie ahead for the 700 employees of the international packaging and disposables company Royal Paardekooper Group (KPG) in the Benelux. Earlier this week, the company was granted a suspension of payments. The possible downfall of Paardekooper may feel like a shock, but it didn't come completely out of the blue.
"There are many packaging companies, and the competition is brutal," explains retail expert Dirk Mulder of ING in Dutch newspaper AD (link in Dutch). Much of that competition is driven purely by price, and in that race, Dutch and European companies often lose out to Chinese rivals. "Packaging is a very energy-intensive industry, and energy costs are much higher in Europe," adds Albert Jan Swart, industry specialist at ABN AMRO.
This relentless price pressure hit Paardekooper particularly hard. Ironically, the company had put much of its focus on sustainability, which was warmly welcomed by many customers. The problem? Sustainable packaging often comes with a higher price tag. "Companies are no longer willing to pay extra for sustainability. If there's a version that's one or two cents cheaper, even if it's less sustainable, that's the one they'll choose," says Mulder.
