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Share price EUR 116,00 17:34 GMT 15.11.2018

Sustainability

Cyclical economy – Inherent part of our business operations: We process primarily renewable and recyclable raw materials and deploy state-of-the-art high-performance technologies in order to produce high-quality cartonboard and folding carton products in a resource-friendly way. For all these reasons, we see cartonboard as one of the most sustainable of all packaging solutions.

“Best practice” throughout the Group – our ambition

In accordance with our industrial aspiration for leadership, our aim is to establish the best possible standards over the long term in all areas of the business. Therefore, we promote the exchange among individual locations and pursue an approach of applying challenging benchmarks of ongoing optimization and modernization within the Group with a focus on our core competence. As a result of the long-term pursuit of this aim, we report the best industrial figures for many environment-related values, such as specific consumption and emissions. It is our ambition to further improve these figures through continuous technical innovation.

We regularly monitor and assess these indicators to ensure compliance with all regulations. In addition, we continuously undertake measures to exploit further improvement potentials for our products and processes. Our approach is holistic and also addresses upstream and downstream areas of production such as product design, procurement, logistics, reusability, and end-user consumption.

Systematic optimization process

We support the optimization process in the Group systematically through the use of certified management systems. The main areas of focus are quality, environment, energy, and hygiene management in accordance with ISO 9001, ISO 14001, EMAS, ISO 50001 and HACCP, EN 15593, BRC/IoP and ISO 22000. Furthermore, the certification of all cartonboard mills, the FollaCell fiber mill and a large part of folding carton sites according to FSC® or PEFCTM documents that we procure fibers from sustainably managed forestry.

In 2017, all cartonboard mills successfully switched from the INREKA standard to EN 15593 (hygiene standard for foodstuff packaging).

Five mills are currently undergoing the extensive transition to the new version of the ISO 9001/14001 standards for quality and environmental management. Two cartonboard mills and the FollaCell fiber mill have already successfully achieved this goal.

Reduced carbon footprint

Since 2005, the both divisions of the MM Group have participated in an initiative conducted by Pro Carton aimed at establishing a European carbon footprint for processed folding cartons. The current carbon footprint is 885 kg of CO2 equivalent per ton of processed folding carton, indicating a further decrease after 915 kg in the last survey in 2012. The process is currently being revised using basic data from 2017 and is likely to be completed in the course of 2018. In its measurement, Pro Carton follows the requirements set out in the framework of the CEPI (Confederation of European Paper Industry). This is based on a comprehensive approach to calculating the carbon footprint, starting at the raw materials and ending at the exit gates of the folding carton producer.

"Carbon leakage" classification for MM Karton

Due to the good level, the volume allocation of CO2 certificates to the seven cartonboard mills located within the European Union as well as to the FollaCell fiber mill for the financial years 2013 up to and including 2020 was largely free of charge. Accordingly, a sufficient number of CO2 certificates is available for these sites until the end of 2020. The political goal of the European Union is a reduction in CO2 emissions by around 20 % by 2020 compared to the reference year 1990. In this context, free allocations of CO2 have been reduced since 2013. The EU reserves the right to revise its free CO2 allocation in the event of changes in the "carbon leakage" classification of individual sectors.

Fibers are the most important raw material in the production of cartonboard. Our cartonboard mills therefore work continuously on improving the application and use of fibers. We achieve optimization of fiber application particularly through the constant review and adaptation of our formulations. We achieve improvements in extracting recycled fibers mainly through further developments in stock preparation. Monitoring systems assure their continuous and compliant use in production. MM Karton uses around 1.6 million tons of fibers each year, about three quarters of which are recycled fibers and one quarter virgin fibers.

In 2017, we succeeded in reducing the use of pulp in recycled fiber-based cartonboard, particularly through product optimization.

Our cartonboard mills predominantly use natural gas as their primary source of energy. The combined heat and power generating plants that MM Karton operates at individual sites produce steam and electricity for cartonboard production in a highly efficient way.

Projects in 2017 in particular focused on improving the efficiency of energy generation through the technological optimization of existing systems and in replacement investments. The most important project was the new gas and steam power station at the Austrian site Frohnleiten, replacing the existing plant to reduce emissions of NOx and increase efficiency. Moreover, possibilities of obtaining more electricity from hydro energy were exploited.

All measures aimed at improving energy efficiency per ton of cartonboard have been coordinated in the “e.fficiency” initiative for around a decade. Based on the significant reduction in specific energy consumption already achieved, we aim to continuously exploit new savings potentials.

We keep water consumption per ton of cartonboard low by using closed circulation systems. In 2017, measures undertaken in the area of water use concerned in particular the optimization of water treatment plants, improved temperature monitoring, and technical modernization.

Exhaust air emissions in the production of cartonboard result primarily from energy generation by burning natural gas. Direct exhaust air produced by cartonboard machines consists primarily of steam. Emissions in form of CO2, NOx, and CO are constantly monitored for compliance with legal regulations.

MM Karton regularly adopts new measures to reduce its exhaust air emissions in line with the latest technological standards. The main focus in 2017 was also placed on the new power plant at the Austrian cartonboard site Frohnleiten, which will contribute significantly to lowering NOx emissions. A positive effect on their development is also achieved by the installation of a new gas turbine at the Eerbeek mill in the Netherlands. Furthermore, switching transport from road to rail and minimizing logistical effort, were pursued, wherever possible.

As a general rule for waste disposal, we apply the principle of "prevention before recycling before disposal”. Waste management for our locations is performed according to a waste management plan that is implemented by the respective waste management officer. Waste disposal itself is performed by authorized waste collectors, recyclers, and disposal firms. We attach great importance to continuously reducing the quantity of residual material from production. The reject materials of the de-inking process that had to be disposed was eliminated in 2017 when the de-inking process at the Eerbeek mill in the Netherlands was phased out. Thermal utilization of wastewater sludge at the Hirschwang site resulted in a reduction in the volume of waste and in the use of gas. Improvements in the quality of packages and a reduction in films were achieved in transport packaging.

Emphasis in the environmentally relevant area of cartonboard processing is placed primarily on avoidance, reduction, and reuse of residual materials. Our measures aimed at increasing productivity, material efficiency and achieving an optimized energy and waste management, enabling further progress in the environmental area at MM Packaging in 2017.

Areas of focus in the field of energy included the continued changeover to LED lighting, improved energy monitoring, and optimized air conditioning systems. In 2017, waste management projects primarily involved measures aimed at further reducing waste and improvements in separation and recycling. Chemicals management focused in particular on optimizing preventive measures, storage, recycling and examining substitute materials. Projects aimed at reducing water consumption and minimizing wastewater were the main initiatives launched in the area of water utilization
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