50 Year Anniversary Book

7/31/2019 50 Year Anniversary Book

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ContentsPart of the big picture 5-7

The advent of the paper bottle 9-11A vision becomes reality 13-15

A global company takes shape 17-19

Research for the breakfast table 21-23

A focus on environmental responsibility 25

The way ahead 27-28

Elopaks VisionWe will contribute to human

health and lifestyle

effectively and responsibly

by becoming the leading international player in

fresh and premium asepticliquid food packaging.


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Fifty Years of EnthusiasmOwning Elopak has at times been a challenging and even nerve-wracking

experience but it has always been inspiring. Admittedly, during the initial

stages, there was reason to doubt the viability of the venture. But for

Christian August Johansen the man who turned up at JL Tiedemanns

Tobaksfabrik with a daring vision and a Pure-Pak license capital and

business know-how were absolutely essential. One of those who saw the

potential in this business idea, and found ways to finance it, was Edgar J.

Johannesen, a senior member of personnel within the Tiedemanns group,

and a key player during Elopaks establishment.

Fifty years down the line, its good to be able to say that the pioneers had

the right idea. Elopak has grown from humble roots as a little beverage

carton factory in Spikkestad into a truly global company. Recent yearshave seen further progress and Elopak has made its mark with attractive

innovations in a sector characterised by tough competition from much

larger players.

In this anniversary year, Elopak is in a position to strive for further growth,

secure in the knowledge that in Ferd they have an owner that is both

demanding and dynamic. All Elopak employees should look on this as a

vote of confidence!

Johan H. Andresen (Junior)Johan H. Andresen (Senior)


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A demanding, research-based product. Resource-saving

and highly CO2-efficient, important for ensuring food

safety, user-friendly, and with sales in the billions. And

manufactured by one of Norways most international

companies, a company which has acquired its ownAmerican mother... Behind Elopak and the Pure-Pak

carton lies a truly fascinating story.

For the 2200 people around the world who work for Elopak,it is nothing new that the beverage carton on the breakfasttable is a piece of advanced technology. Nor that it is theresult of science, ingenuity, commitment and hard work atevery stage of the process from concept to the finishedpackaged product lining shop shelves or refrigeratedcabinets. A product to be proud of. One has just come toaccept the fact that most consumers regard the carton as

a piece of colourfully printed, folded cardboard...In all probability, those same 2200 people also feel astab of pride when they experience a Pure-Pak machinethe size of a locomotive in action, an entire little factorythat automatically and rapidly sends millions billionsof packages through the many complicated processesneeded to provide demanding consumers with the perfectproduct for their breakfast tables. Error margins are closeto zero and there is little tolerance for downtime.

One talked about the wonders of technology inearlier days. Today, most people take them for grantedwithout thinking about what goes on behind the scenes.Even among Elopaks own employees there are probablyonly very few that know much about the hundred years ofdevelopment and the extensive research work behind it.In this booklet, we devote some attention to the beveragecarton as a phenomenon in the past, present and future and at the same time, think a little about the people andthe industry behind the product we have all come to knowso well. The occasion is the 50-year anniversary of theestablishment of Elopak. A rare alliance of foresight anda willingness to go all-out and take risks gave Norway aPure-Paklicensee with ambitions that far surpassedsupplying milk to the local community. That the nameElopak is itself an abbreviation ofEuropean Licensee ofPure-Pakreally says it all.

These same properties, supplemented by staying

power and financial far-sightedness and not least, theconcerted efforts of thousands of employees in manycountries have, over the course of the last fifty years,transformed Elopak into a major, global company. Today,94 percent of turnover originates from outside nationalborders. Elopak is undoubtedly one of the mostinternational businesses in Norwegian industry, following

its 1987 take-over of the American Ex-Cell-O groupspackaging division, and therein all rights to the Pure-Paksystem worldwide.

Its not every day that a licensee from a small countrylike Norway takes over as central licensor for a globalproduct. For the majority of Norwegians nonetheless,Elopak is a well kept secret even if they come into contactwith Pure-Pak cartons on a daily basis. This is due partlyto the fact that the company enjoys a low media profile,but it is also because a well run company with effectiveproducts does not attract dramatic headlines.

The beverage carton and the worlds resourcesOn the rare occasions when packaging does attract themedia more often than not, it is from such perspectivesas wasting natural resources, the affluent society, environ-mental pollution, waste mountains...

In reality, packaging in general and beverage product

packaging in particular, are remarkably resource-savingphenomena. Studies have been conducted which provethat almost 50 percent of all liquid food products made inthe developing world spoils before it gets to the table, whilea proportion of the remaining 50 percent loses andnutritional value. A main cause of this is lack ofappropriate packaging.

Part of the big picture...

Looking after resources: Norwegian children learn at schoolhow to rinse, fold and pack together the cartons, which are thensent to be recycled.

E L O P A K 5 0 Y E A R S A N D R E A D Y F O R M O R E


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Global under-consumption of food product packaginghas moreover a huge negative impact on total CO2 emiss-ions. When you know that on average 90 percent of theenergy consumption that goes into manufacturing a litreof milk relates to the milk itself and ten percent to thepackaging, then you dont have to be a mathematician towork out that even a small increase in the use of pro-tective packaging can produce huge environmental bene-fits. In other words, the problem is not that too muchpackaging is being used worldwide, but that too little isbeing used!

However, packaging is not one thing. Some types aresignificantly more environmentally-friendly than others;some are indispensable to a modern society, others wecould do without.

For the people who work for Elopak, or the consumerswho come into daily contact with Elopak products, it couldbe nice to know that Pure-Pak scores highly on bothenvironmental sustainability and usefulness. The principalraw material in Pure-Pak cartons is cellulose, made fromtrees harvested from forests in the northern hemisphere,

from areas where forests are growing. In other words,Elopaks products are based on renewable resources.They do not contribute to deforestation or cutting downthe rain forest, but on the contrary to maintainingsustainable forestry in countries such as Finland,Sweden, Norway, Canada and the USA.

Additionally, the fibres can be recycled and used to

make new paper; where this is not feasible, the cartonscan be burned to recover energy. Of course, the cartonhas a thin plastic or aluminium layer and perhaps aplastic screw top, but these too can be recycled or burnedwithout producing toxic waste.

For decades, the competition between the differenttypes of beverage product packaging has been tough.Glass, plastic, metal cans and beverage cartons battleover areas of application and market shares compe-tition between plastic and cartons has been particularlyhard in the dairy sector. The repercussions vary greatlyfrom one country to another. For example, milk in plasticbottles is a rare phenomenon in the Nordic countries; inBritain it is the norm. And in many countries, the distri-bution between packaging types changes over time dependent to some extent on the preferences and habitsof the consumer, but also often the result of lobbygroups, retail-chain interests and the marketing efforts ofpackaging manufacturers.

However, an increasingly more widespreadacknowledgement that the worlds CO2 emissions must

be cut provides every reason to believe that the beveragecarton will gain new ground in the years to come. Glassbottles are heavy and energy-intensive to transport andrecycle; plastic packaging, when burned, contributes toCO2 emissions while the beverage carton is easyto transport and close to CO2 neutral when it isappropriately recycled after use.

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Elopak Facts and FiguresTurnover (2006): NOK Five billionNumber of employees: 2200Share of turnover outside Norway: 94 %Sold in over 100 countries

Production Plants: The Netherlands, Germany, Finland,Denmark, Serbia, Ukraine, Canada, with joint ventures inMexico and Saudi Arabia (blanks and/or coating);USA (filling machines); Finland (materials handlingequipment), joint ventures in Israel and Luxembourg (screwcap production) and Greece (plastic bottles)Offices: Baltic States, Canada, Denmark, Finland, France,Greece, Ireland, Israel, Italy, China, Croatia, Malaysia, TheNetherlands, Norway, Poland, Russia, Serbia, Spain, UnitedKingdom, Switzerland, Sweden, The Czech Republic,Germany, USA, Ukraine, Hungary, AustriaJoint ventures: Lala Elopak S.A de C.V. (49 %), Mexico andother Latin-American countries; Elocap Ltd (50%), Israel andLuxembourg; Elopak Plastic Systems Hellas SA (50%),Greece;Al-Obeikan Elopak Factory for Packaging Co. (49%),Saudi-Arabia; Elopak South Africa Ltd(50%).Partners and Associates: Shikoku-Kakoki Co (fillingmachines), Japan; Nippon Paper-Pak, Japan; VisyPakBeverage Packaging, Australia; Offsetec, Ecuador; HankukPackage Co, Korea; Taiwan Benefit Co, Taiwan


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Elopak and the othersOver the course of the beverage cartons hundred-year-long history - the subject of the following chapter therehave been countless large and small manufacturersworldwide. The majority are long gone or have beentaken over by other, larger players. Elopak too hasengaged in its share of take-overs down through theyears. The industry has experienced continuous change;the last major restructuring took place as recently as theend of 2006. The industrial and financial group Ferd,Elopaks owner, joined forces with London-based globalprivate equity group, CVC Capital Partners, to acquire theSwiss beverage carton manufacturer SIG. The idea wasto merge Elopak and SIG, two companies who comple-mented each other well on a product level. Together thecompanies would form the worlds second largest playerin a market, which today is dominated by Swedish TetraPak.

But it didnt quite work out that way. New ZealandsRank Group put forward a competitive bid that Ferd andCVC found they could not justifiably exceed. Rank there-

fore became the second largest player, while Elopak tookup position as the smallest of the big three, who togethercomprise the vast majority of the global beverage cartonsector.

Consequently, Elopak is now fully focused on auto-nomous development, building on and strengthening itssuccess over the last fifty years. We discuss this in

greater detail in the booklets final chapter; suffice it tosay for now that after the turn of the millennium, Elopakestablished itself as the most innovative of the playerswithin the beverage carton sector. At the same time,innovation work has been firmly rooted in an awarenessof the customers needs and wishes. This is essential forElopak. Its position as the smallest of the three majorplayers entails that it is unrealistic to base its competitiveposition on high volumes and low prices. ThereforeElopak has chosen to cultivate activities within thepremium segments for fresh and aseptic packagedproducts. In order to succeed at this, it is essential to beable to offer attractive features and added value inrelation to less expensive solutions.

And this position is in the spirit of true Pure-Paktradition. There is a sense of continuity in that the originalgabled carton gained ground on the basis of consumerswho wanted Pure-Paks user-friendliness, although somedairies showed a preference for competing products thatwere slightly less expensive.

Right enough, when the original patent expired, other

manufacturers imitated Pure-Pak in detail. And in thepast, neither Ex-Cell-O nor Elopak were overly concernedwith innovation as means of maintaining Pure-Paks posi-tion which consequently suffered for a period. But this isall ancient history today, the Norwegian-based companyis an aggressive contender in a global market.


The Big ThreeOn a global level, todays beverage carton sector isdominated by three major players:Tetra Pak: Originally Swedish. Now withheadquarters in Switzerland, in a league of itsown, the biggest player with a global marketshare of around 70 percent and activities inmost markets.Rank Group: New Zealand. Owns SIGin Europe, Blue Ridge and InternationalPapers in the USA.Elopak: Norway. Markets andlicenses the Pure-Pak systemworldwide. The third-largestplayer and market leaderwithin fresh products.


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8 E L O P A K 5 0 R O G K L A R F O R M E R


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The hundred-year-long history of the beverage carton

reveals a great deal about the complicated nature of the

product and manufacturing equipment: more than 20 years

passed before someone managed to produce a

conveniently usable milk carton and just as long againfrom the invention of Pure-Pak until one of the USAs

leading manufacturers of precision machines mastered

the Pure-Pak system.

Light, practical packaging protects the fantastic prop-erties of the milk or juice, but is discarded after use...

This was the stuff of dreams in a world where thewoman in the milk shop bailed a litre or two into a speciallybrought along for the purpose hopefully well-cleaned milkbucket, or where the milk came in heavy glass bottles which, when empty, had to be thoroughly rinsed andbrushed with a bottle-brush before being sent back to the

shop, the milkman, the dairy. A dirty job, especially if youleft it until the milk dregs had dried in, not to mention if thebottle had contained a fermented milk...

No, it is no coincidence that consumer demand hasbeen pivotal in many of the markets to which user-friendly,disposable packaging has been introduced, more often thannot in the face of fierce opposition from authorities anddairies who had invested heavily in other types of systems.

Bright ideasThe first known description of the sale of milk in paper-based packaging originates from the USA. In a book from1908, a Dr. Winslow in Seattle, Washington, describes adisposable, paper-based milk container invented by G. W.Maxwell in San Francisco. According to Winslow, thecarton was used in Los Angeles as early as 1906 butwithout success. It was purported to be rather impracticaland quickly and quietly disappeared.

In the years that followed, there were experiments withwaxed bags as well as metal cans but it was first and fore-most paper-based containers that aroused the mostinterest. In the 1920s, there were apparently ten manu-facturers offering carton-based packaging for milk in theUSA. But all ten supplied pre-folded and pre-glued cartonsthat were ready for filling. This meant that all transportationand storage would also have to entail the transportationand storage of large amounts of air.

Then the toy manufacturerJohn Van Wormerin Toledo,Ohio, had a better idea: as early as 1915, he had patenteda carton made of waxed paper that could be delivered tothe dairy in folded format, glued along the sides but not atthe ends. Now he was working on constructing themachines that would be needed to form, fill and seal thenew carton, to which he had given the name Pure-Pak.

The idea was stunningly simple, but its implementationturned out to be anything but straightforward. Van Wormertook ten years to complete his first machine. It worked tosome extent but not well enough to achieve commercialsuccess, and the inventor realised that he would not beable to complete the project on his own. In 1928, he sold

both the patenting rights and the brand name to theAmerican Paper Bottle Company, who would furtherdevelop the technology. The company built six newmachines in the period between 1929 and 1934, but wereunable to make them work properly.

At the same time, several competitors were workingon producing paper bottles, and in 1929 the pressreported that two big dairies in New York had begun to useSealcone brand conical milk cartons. In other words, pres-sure was building to get the Pure-Pak machines up andrunning. Towards the end of 1934, the American PaperBottle Company therefore decided to ask Ex-Cell-O, one ofthe USAs most well-known manufacturers of precisionequipment, to take over the work.

Technically excellent, surrounded by enemiesEx-Cell-O Corporation in Detroit was started by ex-Fordemployees in 1919, and was in 1934 best known as a

supplier of precision machinery for car manufacturing andairplane parts. However, the company also suppliedprecision machinery and parts to around thirty othersectors so one could easily use ones machinery-relatedskills to supply the dairies too

The advent of the paper bottle


A timeless concept: Todays Pure-Pak is easily recognisable inJohn Van Wormers patent application from 1915.


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It would prove to be the most challenging assignment inthe companys history. The problems began when theAmerican Paper Bottle company ran out of money after ashort time. Ex-Cell-O took over the rights to the brandname, packaging and machines only to discover that thefilling units that were already installed, and for whichEx-Cell-O had taken over the guarantee liability, did notwork at all as expected and had to be replaced with newequipment.

It was even worse to discover that the company hadmoved into a sector where most of the players were hostileto the newcomer. Among the opponents were, as onemight imagine, bottle manufacturers, transport companiesthat transported heavy glass packaging back and forth,suppliers of crates, bottle caps, filling equipment and bottlewashing machines. But also many of the dairies, whoshould have formed the customer base, proved to beextremely negative. They had invested large sums inbottles and related manufacturing equipment and had littledesire to spend money on new and expensive Pure-Pakmachines. Moreover, many of them made a good living

free from any uncomfortable competition.The new, light milk cartons could radically alter thepicture, and established interests with monopolies todefend did not hesitate to mobilise marketing power,political friends and archaic legislation. In certain places,they managed to get the local health authorities to banpaper bottles, on the basis of undocumented theoriesregarding the cartons adverse health effects.

The carton sector with Ex-Cell-O as the key player fought a multitude of court battles during the yearsbetween the wars, both in the 48 states that made up theUSA at that time, and within the federal legal system. Anexample from Chicago is illustrative: one of the citysdairies wanted to offer its customers milk in Pure-Pakcartons, but the city health board denied approval of thenew packaging and laid down a ban on sales, citing astipulation from 1888 that volumes of milk under one gallon

(3.8 litres) were onlyallowed to be sold in astandard milk bottle.

After six years ofcourt cases against thehealth board and thecitys major, conducted atall levels of the Americanlegal system, it lookedlike the dairy and Ex-Cell-O were going tosuffer a defeat. The finalcourt ruling was that thecity authorities had a legal right to make glass bottles com-pulsory if they so desired. But, while the trial was going on,the ban had not been legally binding. Sales of milk inpaper-based packaging had been going ahead and had, inthe meantime, reached a level of half a million units perday. It was blatantly obvious what consumers wanted. Andsince local elections were drawing near, Chicagos mayordeemed it safest to make a u-turn: the challenging and

hard-fought court victory was discreetly set aside and thewords standard milk bottle were supplemented with orother approved container. And so Pure-Pak won the battle.

Pure-Pak is perfectedIn addition to efforts at the legal and political levels,Ex-Cell-O also employed major resources in perfectingboth the filling machines and the conversion machines forblanks. The blanks machines inherited from the AmericanPaper Bottle Company used piles of paperboard plates asraw material in the same way as traditional printing houses.Ex-Cell-O developed new and effective rotation machinesthat inserted the raw material in the form of huge rollsand could continuously produce blanks at high speed.The cartons were also improved; amongst other things,Ex-Cell-O funded wide-ranging research to develop a newpaper-based material that would make the packaging morehygienic and leak-proof.

Another long-term and demanding development projectcentred on how the cartons should be opened. The pro-duct Ex-Cell-O took over in 1935 had no opening mechan-ism whatsoever; the consumer was directed to attack thecarton with a knife or a pair of scissors. This was hardlysatisfactory so Ex-Cell-O developed a solution in the formof a type of sealed tab at the end of the cartons gable without quite managing to get it to work as it should. Itactually took all of 18 years before the solution we all know

was reached: the top part of the gable on the Pure-Pakcould be bent back and folded out into a complete pouringspout, that is then folded back to close the carton. A brilli-ant solution, which, in terms of user-friendliness, is sur-passed only by the plastic screw top. The concept itselfwas actually described in Van Wormers patent as early as1915 but for a long time, it was impossible to create agable that was both impermeable and easy to open,without using glue that produced an aftertaste orhazardous chemicals.

1 0 E L O P A K 5 0 Y E A R S A N D R E A D Y F O R M O R E

Competition: A range of paper bottles were launched in the1930s; the picture at the top shows some of them. Pure-Pak(left) was the clear winner.


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A major, powerful playerIn time, as the Pure-Pak system was further developed,Ex-Cell-O achieved ever-increasing success in the market,but the war years brought major supply problems. Not untilthe war was over could the really significant growth takeplace. A powerful, optimistic and technology-oriented USAstood ready to embrace any progress that made everydaylife easier and better. Modern disposable packaging was ofcourse right in its sights and Pure-Pak in particular pro-ved to appeal strongly to post-war, American housewives.

The market share grew slowly but surely at theexpense of both bottles and other beverage carton brands.By the mid-1950s, Ex-Cell-O had become a giant withindisposable packaging. Nevertheless, it was the machinesthat were the companys heart and soul; it didnt matterwhether they were used to build spaceships or fill milkcartons. Also, at that time, Ex-Cell-O only manufacturedthe machines themselves; from the very start, all blanksproduction was licensed to the paper factories andconversion specialists in contrast to Elopak, for example,who chose to be a full systems supplier, responsible for

both cartons and machines, and after a time, also for theequipment for distribution to the retail outlets refrigeratedcounter.

Pure-Pak in the worldDuring the initial post-war years, Ex-Cell-O had more thanenough demand in the domestic market. During the 1950showever, the company slowly began to direct a littleattention towards foreign players who wanted to take partin the progress. Moreover, the American military wantedtheir forces overseas to have milk in cartons, just like theywere used to getting at home. Towards the end of 1956,Ex-Cell-O had six licensees outside the USA: three inCanada, one in Columbia and two overseas in Belgiumand Denmark.

It was at this time that a Norwegian knocked on thedoor of the headquarters in Detroit. His name wasChristian August Johansen. A cellulose engineer byprofession, his mission was to secure a license agreement

for Pure-Pak in Europe, and a filling machines agency. Hewas of course thrown out.

But Christian August Johansen was not the type to giveup so easily. It is said that he sat himself down on thesteps and refused to move until the Ex-Cell-O manage-ment heard him out.

In any case, it is a fact that he did eventuallycome home with both the license and the agency.And so begins the Elopak story the subject of thenext chapter.


European tracks and sidetracksIt was in the USA in 1906that the first seriousattempts to put the milkcarton on the market weremade and it was also herethat the beverage carton

enjoyed its breakthrough acouple of decades later.However, this does notmean that there were noEuropean inventors workingon the case. A point to bemade here is that SwedishTetra Pak delivered its firstfilling machine in 1952, and

with that started the sectors biggest success story but inactual fact, one Gustav Trkfrom Kronstad patented apaper-based beverage container as early as 1882. It wasimpregnated with a combination of fine limestone powder,aluminium-oxide and fresh blood serum and was calmlyforgotten. In 1929, the machine factory Jagenbergin

Dsseldorf launched a gable top carton called Perga Pack which enjoyed some degree of success, but fell prey toeconomic recession in the early 1930s. Production washowever resumed in 1958, and taken over by SIG in 1988.The Satona Companyin Leeds, England, also manufactureda paper bottle patented by the Dane, Carl Hartmann in1935, and the Norwegian engineer, Erling Stockhausen,patented a similar but improved carton and associated fillingand sealing machine (picture). Stockhausens equipmentwas used on a trial basis by Agder Dairy in Kristiansand from1938 to 1940, reportedly with good results. The break-out ofthe Second World War brought further work to a halt.

Vintage: Ex-Cell-O supplied Pure-Pakfilling machines to all types of dairies,from the biggest to the smallest.


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1 2 E L O P A K 5 0 R O G K L A R F O R M E R

Easy to do it yourself .....


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No customers. No factory. No suppliers of raw materials.

A product to which few Norwegians related, and which

many regarded with scepticism. This was the state of

affairs on the 11th of February 1957, the day A/S Elopak

Limited was founded. No-one can accuse the founders oflacking courage...

It all began when the Norwegian cellulose engineer,Christian August Johansen, came home from the USA witha daring vision: a European license agreement for theAmerican Pure-Pak carton and an agency for Pure-Pak fill-ing machines. He had paid Ex-Cell-O in Detroit a lump-sum of 5000 dollars; moreover, the American companywere due a license fee of two percent of blanks sales. Forhis part, Johansen got a commission of around ten percentof machine sales.

However alone, he did not have the capital to get

started. Johansen needed an investor and had alreadybeen in contact with Den norske Creditbank and Orkla,without success. In the spring of 1956, he was advised tocontact Tiedemanns Tobaksfabrikk in Oslo. Here he foundan interested audience in the factory owner Johan H.Andresen senior.

Paper bottles in Norway?Both directly before the war and around 1950, many of theNorwegian players were experimenting with carton packag-ing for milk. For a brief period, Fellesmeieriet dairy plant inOslo supplied cream in cartons manufactured by a papercompany in Sarpsborg, which were similar in appearance

to Pure-Pak. And in 1953, the newspaper, TelemarkArbeiderblad, reported that Fellesmeieriet had plans tomake the transition from glass to paper based packaging.

But the newspaper was too quick off the mark andthere was no shortage of reactions. ...it is already appar-ent that the packaging will push up the price of milk tosuch an extent that normal sales will be out of thequestion, remarked the manager of Skiens Meieribolag.He was supported by sober-minded men, who were ent-husiastic about expressing their opinions in public debate:No, while disposable packaging was perhaps acceptable inAmerica, it would not be in Norway. It would cost too much,and the minor inconvenience of washing and returningempty bottles wasnt even worth mentioning...

The factory-owner, Andresen, did not allow himself tobe discouraged by this type of scepticism. The family firmneeded new investment opportunities, and C. A.Johansens project was more closely scrutinised. After

thorough calculations and analyses of the marketopportunities, Johansen and a Tiedemanns representativetravelled to Detroit. Here they met Ex-Cell-O Vice-PresidentGeorge Scott to confirm the agreement and elaborate oncertain points.

Tiedemanns swung behind the project. On the 11th ofFebruary 1957, A/S Elopak Limited was formally establis-hed. The name, an abbreviation forEuropean Licensee ofPure-Pak, did not however arouse great enthusiasm at Ex-

A vision becomes reality


A handshake in Detroit: In early 1957, Christian AugustJohansen (on the left) and Ex-Cell-Os George Scott agreed onthe final details of the license agreement.


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Cell-O, who thought the Norwegians were going too far.Elopak had manufacturing rights only in Scandinavia, alt-hough it did have the sales rights for blanks in the whole ofEurope, but not exclusively; there were already license-holders in Denmark, Belgium and England.

Nevertheless, the new company kept the nameElopak. Tiedemanns became the principal shareholder with75 percent of the capital; C. A. Johansen got the remaining25 percent as payment for concept, rights and contri-butions before establishment. He also became the newcompanys first CEO, and an agreement was entered intobetween Elopak and Johansens company regarding thesale of Pure-Pak filling machines.

It was quite a factory...At the time, Tiedemanns had an available balance of NOK1.5 million. With this money behind them, the work of build-ing a large, new production plant was set in motion before Elopak was even formally established. The factorywas located at Spikkestad in Southern Norway. The sitewas chosen because it was only a short distance from

Hurum Paper Factory which, according to the plan, wouldbe supplying the raw paperboard.The new building was erected in record time or, as an

enthusiastic Drammens Tidende reported in their issue of23rd of November 1957: Its incredible, but it was in Janu-ary this year that the groundwork began out at the Elopakfactory in Spikkestad. This was not a straight forwardhousing project. It was quite a factory worth over 1.5million kroner. Today it is completely finished. On the sameday, the newspaper Fremtiden stressed that a tour aroundthe bright and beautiful factory grounds gives a goodindication of just how far modern technology has come.

Both newspapers were impressed by the machines,from which ...paper milk bottles are virtually shot out. Andthey had reason to be. Elopak had decided to go for anadvanced, high-capacity, rotary machine ambitions wereriding high from the offset. The new company hadcommitted itself to becoming a major supplier of integratedpackages of machines and blanks in contrast to manyother players, among them Ex-Cell-O itself. The parent

company in Detroit sold only the machines and left allblanks production to others on payment of a license fee.

Fighting for a customerNow that Elopak had a factory the first personnel wererecruited. But there were still no customers, and theemployees were carrying out odd jobs, such as paintingthe walls.

As it turned out, the transition to paper-based materialswas extremely difficult for the Norwegian dairies. At thetime, they were in the middle of replacing long-necked andheavy, clear-glass bottles with a new type of bottle thatwas smaller, lighter and coloured brown, which provided adegree of protection against light and therefore against theunpleasant sun-struck taste that sometimes affected themilk in the summertime. This was already a major invest-ment for the dairies. And then along comes Elopak, urgingthem to commit to paper bottles that will require furtherinvestment andwill be more expensive! Thanks, but nothanksits just too inconvenient.


First-class equipment:

Right from the start, theconverter plant inSpikkestad had effectiverotary machines withpaperboard on rolls.

Military inspection: The first Elopak cartons were to be used tosupply milk to the American forces in Europe. The US Navy sentpeople to Spikkestad to ensure that everything went smoothly.


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It was the American forces, stationed in Germanyafter the Second World War that came to the rescue. Thesoldiers received their daily milk in practical cartons, justlike they were used to back home. The Dutch dairy com-pany, Sterovita, was responsible for supply, based onblanks from the American-owned Dairy Pak. Elopakdecided to take up competition.

However, closer investigation showed that Dairy Paksupplied blanks at way under the normal listed price, whichformed the basis of Elopaks calculations. This was a quitea let down. It called for a different way of thinking that wasrooted in economics of scale that is, where large vol-umes lead to low costs per unit. Moreover, the price of rawmaterials that had been used as the basis for negotiationswith Hurum Paper Factory, simply had to come down.

But Hurum had little faith in Elopak and, not least, insupplying liquid paperboard at the price the newly establis-hed factory would pay. The working relationship was ter-minated before it got off the ground, and Elopak chose touse liquid paperboard from International Paper in the USA.

The offer was sent to Sterovita. And early in 1958, itwas clear that Elopak had won its first customer a con-tract for the monthly supply of between 40 and 50 millionblanks over the course of one year.

Another part of the story is that Dairy Pak wasunhappy they had lost. The companys Director and Sales

Director made a personal appearance at Elopaks Head-quarters in Oslo, and threatened to drive the Norwegiansinto bankruptcy. It would later transpire that they hadissued the same threat to Jyllands Papirvrk (Schouw),who held the Pure-Pak license for Denmark, but withoutputting them into action. So Elopak chose to ignore thethreat, and heard nothing more about it.

Asker Dairy leads the chargeIn the meantime, the work to win customers from amongthe Norwegian dairies continued. It so happened that AskerDairy planned to extend their capacity significantly, but hada serious space problem. Elopak demonstrated to the dairy

management, headed by manager Lars Gjul, how thiscould be resolved by making the transition to cartons fromglass for certain stages of production. Both the manu-facturing equipment and the packaging occupied signifi-cantly less space, and the dairy would be able to extendcapacity without having to put up new buildings.

That clinched the deal: on the 5th of February1958,Asker Dairy became the very first in Norway to fill Pure-Pakcartons with milk, and the first to make milk in cartonsordinarily accessible to Norwegian consumers.

The event attracted wide press coverage as well as,according to the newspaper Nationen, several invited cele-brities. Housewives stood in a queue outside, bursting withanticipation, to secure their share of the new miracle andsoon enough, many of them began to make the twentymile trip from Oslo to Asker to buy milk.

Furthermore, Elopak and Asker Dairy combined forcesto make a smart marketing move: for the first month, theold bottles were not used. All products were filled incartons which were, however, sold at the same price asbottled milk. Consequently, whether they wanted to or not,consumers became accustomed to the new packaging.Then, when the bottles returned, the housewives could based on their own experiences decide whether or notthey wanted to pay the six re the pricing authoritieswould accept as the additional price for cartons and

thus only carry home 1.08 kilos per litre of milk, insteadof the heavier glass bottles; which in addition had tobe washed out and carried back to the shop.

There was no shortage of customers whothought that this was good value for money. Andthe numbers grew steadily until Asker Dairy wasable to wind-up bottle-filling for good in 1967.

The verdict of the consumers was clearand the success in Asker made a definiteimpression. Ten years after theestablishment of Elopak, 39Norwegian dairies were fillingPure-Pak cartons with milk.


Success: Asker Dairy was the first inNorway to go with Pure-Pak. Manycustomers gladly travelled the twentymiles from Oslo to get hold of milk inthe new packaging.


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The earlier the better ..


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Firmly established in Spikkestad, Elopak began to work

intensively to add more Norwegian dairies to their customer

list. After ten years, the number stood at 39; among them,

some of the biggest dairies in the country. Now it was time

to make the companys international ambitions a reality.

It would take an entire book to provide a reasonably sys-tematic presentation of Elopaks multifaceted developmentover the last fifty years from when the first blanks leftSpikkestad to todays multinational company. We will haveto content ourselves, over the following pages, with a rangeof themes and episodes; some important, others more of acharacterisation. Several others could and maybe should have been chosen, but hopefully, this chapter will never-theless provide some impression of Elopaks journey tobecoming a global company.

Norwegian growthAfter Elopaks successful debut in Asker, the marketbegan to loosen up. More and more dairies realised thatthey had to provide customers with an alternative to thebothersome bottle. However, the dairies showed little will-ingness to pay, and Elopak had to operate within narrowprice-margins and with low profitability. The organisationwas small and did not have the money to employ morepersonnel so the first years demanded a great deal ofpioneering spirit and dedication from its employees, andpatient far-sightedness from its owner.

Daily life was not made easier by the fact thatEx-Cell-O was mostly concerned with selling machines ina burgeoning domestic market. License-holders in Europeplayed second fiddle and technical support was so-so.However, C. A. Johansen had recruited diligent serviceengineers, and they managed to deal with most situationson their own. Many of them were ex-naval engineers,used to improvising and able to give their all when it reallymattered.

But, against all odds, Elopak managed to maintain alevel of service with which clients were satisfied, and overten years, 39 Norwegian dairies installed Pure-Pakmachines. Contracts were won despite tough competitionfrom alternative and cheaper solutions. A few dairies optedfor milk in plastic bags, but the main competitor wasSwedish Tetra Pak, with its tetrahedron shaped packagingthat gave the company its name. Today, it is sold under thename Tetra Classic; during this period it was usuallycalled the triangle.

Both the packaging and the filling machine cost lessthan the equivalent Pure-Pak, and the small dairies,especially those in sparsely populated areas where pro-duction volumes were small and transport of milk bottlesdisproportionately expensive quickly adopted the tri-angle. Elopak had, for its part, particular success in thebigger cities: it was unquestionably a major victory when,in 1960, the big Fellesmeieriet dairy plant in Oslo chose

the Pure-Pak system.The key to Elopaks success in the Norwegian marketwas Pure-Paks superior user-friendliness. Both thetriangle and the milk bags were thoroughly unpopularwith consumers. They were difficult to open and to pourfrom, and campaigns were launched in several places toreplace them with the gable top carton.

The bags quickly disappeared. The triangle alsowent on the defensive, and Tetra Pak realised that theyneeded to offer an alternative. Then, in 1964, the brick-shaped Tetra Brik was launched by locals it was imm-ediately christened the square. But the square lackedthe gable top cartons stability, and many years would goby before it was given an opening mechanism whichmade the use of tools unnecessary. Norwegian consum-ers still preferred the gable top carton, and in the end,Tetra Pak therefore had to resort to the Pure-Pakimitation Tetra Rex, launched in Norway in 1967.

Today the gable top carton is the dominant packagingform for milk and fresh juice in Norway, and Elopak

A global company takes shape


Practical in the refrigerated display

cabinet:

The light, disposable cartonscontributed to grocery shops in mostplaces taking over the sale of milk.


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has maintained a clear, leading market position, in thisanniversary year of 2007, with a market share of around60 percent.

Out in the world the hunt for paperboardElopak first established itself internationally in Finland due to the necessity of having to find a secure and compe-titive supplier of raw materials. Initially, American paper-board was used, but this was not a permanent solution. C.A. Johansen had contacts within Finlands biggest forestrygroup Enso-Gutzeit Oy, originally a Norwegian companyfounded by the Wilhelm Gutzeit from Drammen, which hadsince relocated to Finland. When Johansen contacted thecompany, they were right in the middle of constructing anew plant in Kaukop, which could be developed to meetthe Pure-Pak cartons specifications.

Parallel to this, Elopak saw great potential for cartonedmilk in Finland, where, due to the destruction wrought bythe Second World War and the Civil War, milk was mainlystill sold in buckets. In 1959, Elopak and Enso-Gutzeit, witha 50 percent share each, created the company Elopak Oy.

The company would sell machines to and provide a servicefor Finnish dairies, while Enso-Gutzeit would supply thedomestic market with blanks, upon payment of a licensefee to Elopak and not least, supply the factory inSpikkestad with paperboard.

In 1998, Enso-Gutzeit merged with Swedish StoreKopparsberg to form Stora Enso, which continues to beone of Elopaks most important suppliers of raw materialsalong with Swedish Assi Domn Cartonboard andAmerican International Paper.

The great swedish milk warElopaks next international venture was in Sweden. Whathappened here says a lot about consumer power and

powerlessness, and not least about the fierce struggle forthe markets between Elopak and Tetra Pak.

The Swedish co-operative dairy giant, Mjlkcentralen(now Arla), as interested in disposable packaging for milk asfar back as the end of the 1940s. They had contactedEx-Cell-O, who responded that they did not have thecapacity to cater to civilian markets outside the USA.Mjlkcentralen therefore allied itself with Tetra Pak, whoneeded a partner to finance the work of developing theoriginal tetrahedron shaped packaging, the triangle. TheSwedish Dairies Association also contributed to the develop-ment work and later to the launch of the new packaging.

The alliance would prove to play a major role in thecompetitive situation in Sweden. Elopak came to realisethis after establishing its Swedish subsidiary in 1961, whenit experienced Mjlkcentralens active efforts to preventmember dairies from choosing Pure-Pak. At first, just onedairy in Dalarne dared to break rank, the result of pressurefrom consumers who did not want their milk bottles to bereplaced by the triangle.

But the situation in Malm was exceptional. Here, at

the beginning of the sixties, there was real competitionbetween three dairies, and a great deal of interest wasaroused when the privately-owned Phlssons Mejeri ABchose to invest in a Pure-Pak machine and in one year,doubled its market share from 20 to 40 percent. Milk inPure-Pak cartons was so popular that shops used them asloss-leaders, and when Phlsson eventually began toexport to Stockholm, the dairy had to buy in several Pure-Pak machines to cover demand. Whats more, the successin Malm spread to the local dairy in Lund, Tetra Pakshometown. It is said that the head-quarters canteen had toserve milk in Pure-Pak cartons.

Nevertheless, things got even worse when a marketsurvey revealed that 80 percent of consumers preferred


Four CEOs in fifty years

Throughout its 50 year history, all Elopaks CEOs (Chief Executive Officers) have held the top job for long periods. Thepicture on the far left shows the portrait of Christian August Johansen who started and led the company from it wasestablished in 1957 until 1967 unveiled in the presence of (from the left)Arne Sunde (CEO from 1968 until 1979), ownerJohan H. Andresen senior, his wife Marianne Andresen and Johansen himself. Today, the painting hangs in the companysoffices in Spikkestad. In the following pictures we see Eiulf Storm (CEO 1980-1996) and Bjrn Flatgrd(1996-2007).


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Pure-Pak, and were more than willing to pay a slightlyhigher price for it. More and more dairies chose to go overto the American-Norwegian carton, which from 1966 wasmanufactured at a dedicated plant in Sweden. At its peak,Pure-Paks market share was right up at 42 percent.

As more and more dairies chose Pure-Pak, theSwedish Dairies Association decided they had to takeaction. The nasty competitor had to be stopped, and theorganisation put pressure on member dairies to get themto replace Pure-Pak with Tetra Pak. But consumers werehaving none of it! And with that, the Swedish Milk Warbroke out, a war that raged on many fronts: as petitioncampaigns, in local councils, as boycott demonstrations insupport of Pure-Pak. The war enjoyed a great deal of cov-erage on radio and TV, (where Tetra Paks Hans Rausingspilled milk all over the table during a demonstration of thetriangles pouring properties); it took on a legal dimensionwhen Elopak took the competition authorities to court; atone stage, a smear campaign was launched involvingclaims that Pure-Paks wax-layer could be carcinogenic.The dairies divided into two camps, which after a whilewere hardly on speaking terms with one another. The dis-pute in Vsterbotten was especially intense it raged on,fuelled by large-scale public participation, over the entireperiod between 1977 and 1987 with a level of heat thathas become the subject of sociological studies.

Part of the story is that consumer power didnt cut it.Monopolies dont have to take the wishes of consumersinto account but despite this, in 2007, Elopak still holds a30 percent market share in Sweden.

European expansionTowards the end of the 1960s, Elopak began to expandbeyond the Nordic region. The company held the licensefor Europe, but no exclusive rights. There were local lice-nse-holders in Denmark, Belgium, Italy, France and theUnited Kingdom. But, aside from in Denmark, and to acertain degree, the United Kingdom, they had not achieveda great deal.

Elopak began cautiously with a small office inGermany, mostly in order to get a feel for the market. Thefirst subsidiary outside the Nordic region was, however,established in France in 1967, the reason for this beingthat a couple of major contracts had been won there as

well as an order for three Green Devil aseptic fillingmachines (see fact box), the first three that Ex-Cell-Osupplied in Europe.

The name would turn out to be an omen: bacteriaflourished in the presumably aseptic packaging, andElopaks technicians failed to make the machines work. Inactual fact, it is only in recent years that Elopak hasbecome an aseptic supplier of any real size: it is fresh pro-duct packaging that has been the companys main strengththroughout most of their history.

But the packaging of fresh milk requires high-qualityraw materials, something which in turn demands that boththe dairies and all distribution systems, from the farmer tothe consumer, meet very strict requirements. This is not aproblem if there is a tradition of adults drinking milk, like inNorth America, the Nordic region and a few other


Fresh or asepticThere are two main types of beverage carton, for fresh andaseptic products respectively. For fresh products the cartonand the contents are normally not sterilised. This protects thefresh products taste and nutritional content. However, it has ashorter shelf-life, and the packaged product must bedistributed in an unbroken refrigerated chain.

Aseptic filling of milk takes place under sterile conditions andafter ultra-pasteurisation, (UHT Ultra High Temperature),which involves heating the content to around 140 degrees fora couple of seconds. Cartons for fresh products must beimpervious to liquid; aseptic cartons must also be imperviousto oxygen and other gases.


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countries. But in many parts of Europe and the world,packaged fresh milk is relatively rare, a premium product,

with smaller volumes than of aseptically packaged milk.The Dutch are however a milk-drinking people. More-over, Elopak had excellent contacts in the country; thedairy company, Sterovita, had of course been Elopaksvery first customer. From an early stage therefore, theNetherlands became an area of commitment and has alsoacted as a bridgehead for further expansion into Europe.The first converter plant for blanks outside the Nordicregion was constructed in the Dutch town of Terneuzen which today also houses the factory that laminatesElopaks barrier materials onto the raw paperboard. Elopakhas maintained a solid position in the Dutch market forsome time, a position that was further strengthened both

locally, and in a range of other European countries when,in 2003, Elopak took over beverage carton operations ofthe Dutch packaging group Variopak.

Ex-Cell-Os declineBut while Elopak expanded in Europe, things got worse formother Ex-Cell-O in the USA. When Elopak got its Pure-Pak license in 1957, the Ex-Cell-O Corporation was a giantin the American market for milk packaging. Between 50and 60 percent of all the milk in the USA was sold incartons, and of those cartons, between 60 and 70 percentwere Pure-Pak cartons.

But Ex-Cell-Os primary business was machineconstruction. The company made manufacturing equipmentand precision parts for a wide range of industries, and thePure-Pak machines came into being in the same way asthe machine factorys other products for the most part,using the same production lines. A lot suggests thatEx-Cell-O never saw itself as a part of the packagingindustry; they thought in terms of machines not in termsof packaging, and had no discernible strategies for hold-

ing onto their fantastic position in the American milk market.After a while, patents began to expire resulting indeclining license income and new competitors. Neverthe-less, Ex-Cell-O did not commit to developing into a full-system supplier in order to secure new income streams, asboth Elopak and Tetra Pak had done; neither did they formalliances with the big paper factories that manufacturedblanks. A lack of proximity to the customer probably contri-buted to the fact that they did not manage to carry outproduct development, which would perhaps have securedthe loyalty of the dairies.

All these factors contributed to leaving the Americanmarket wide open to a new and aggressive competitor the plastic bottle. It began to assert itself in the USAs milkmarket at the beginning of the seventies. At the time, Pure-Pak still held over 70 percent of the carton market. By1979, plastic had taken over 45 percent of the total market,and this share rose rapidly into the eighties. Pure-Pak wasin the process of turning into a marginalised phenomenon.

Elopak takes overAt the beginning of the 1980s, Elopak was expandinginternationally and thoroughly frustrated by the fact thatEx-Cell-O had not managed to develop the new types ofmachines that clients were demanding. We have alreadymentioned that Ex-Cell-O had experimented with asepticmachines, but without success. Elopak chose therefore to

instigate a joint venture with Liquipakin St. Paul,Minnesota. The goal was to develop an aseptic machinefor Pure-Pak cartons the project appeared extremelypromising. In 1986, the first machine was ready to bepublically presented at a trade fair in Paris, and wasstrategically placed in the exhibition hall the day beforethe opening of the trade fair.

Then the bombshell was dropped: arch-rival Tetra Pakhad bought out Liquipak probably for the sole purpose ofkeeping Elopak out of the aseptic market. There theSwedish company held a near total monopoly, somethingthey much preferred to hold onto.

The Liquipak buy-out sent shockwaves through


Growth around the world1957 Norway1959 Finland1961 Sweden1967 France1968 The Netherlands1968 Germany

1969 Italy1974 Switzerland1981 Spain1982 Great Britain1983 Bahrain1983 The Netherlands, Elocoat1984 Switzerland, Elopak Systems1987 Ireland1987 USA1988 Portugal1988 Denmark1991 Austria1991 Czech Republic1992 Switzerland, Elopak Trading1992 Poland

1992 Russia1992 Malaysia1995 France, Norester1996 Ukraine1997 Italy, Unifill1997 Saudi-Arabia, Joint Venture1998 Mexico, Joint Venture1998 Israel1999 USA, Scott Group1999 Finland, Elofin1999 Israel, Elocap1999 South Africa, Joint Venture2000 Canada2000 Switzerland, Plastic Systems2000 Germany, Elofill2000 China2001 Sweden, EDC2003 Great Britain, Plastic2003 Greece, Joint Venture2004 China, Souzhou2005 Serbia2006 Hungary2006 Luxembourg2006 Croatia


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Elopaks management. What if Tetra Pak buys the rights toPure-Pak too? Ex-Cell-O was obviously weary of thecarton adventure and had intimated that they were thinkingabout selling up.

Elopak could not sit passively and watch something likethis happen. Management was convinced that there had tobe a way to exploit Pure-Paks international potential betterthan Ex-Cell-O had managed to do. In 1987, with the sup-port of owner, Johan H. Andresen senior, Elopak steppedin and bought out Ex-Cell-Os entire packaging division,including all rights to the Pure-Pak system worldwide. Herebegan Elopaks journey to becoming a global player.

And Ex-Cell-O? They still exist and make machine toolsand automated manufacturing equipment for industry justlike they started doing in 1919. Today, the company is apart of German-American MAG Powertrain, itself a part ofMAG Industrial Automation Systems.

The American renaissanceTen years passed from Elopaks take-over of all the rights toPure-Pak until any serious attempt was made to win a posi-

tion in the homeland of the carton. The region ElopakAmericas with head-quarters in New Hudson, Michigan has overall responsibility for all operations on the Americancontinent and in the Caribbean. Here is also the factory thatmakes Pure-Pak filling machines, co-located with some rese-arch and development staff. The manufacturing of blankstakes place at plants in Montreal, Canada and Torren,Mexico. The Mexican plant is one of Elopaks biggest.

Both the Mexican and the Canadian plants export signifi-cantly. Mexico supplies several South-American countries andthe southern states of the USA, while Canada is strategicallyplaced to supply Chicago, New York, Washington and therest of eastern America south to Virginia. Additionally, severalCaribbean countries are important export markets.

Many Americans prefer plastic packaging for milk,which is now used for 80 percent of milk. The remaining20 percent nevertheless comprises large volumes, andtherefore represents significant potential for Pure-Pakcartons. Elopaks American personnel have moreovershown creativity and willingness to blaze new paths with

unconventional products in relation to the gable top carton such as sugar, syrup, bathing salts, plant fertiliser,chewing gum... and cartoned liquid eggs have been a bigsuccess with people who want to avoid breaking eggs tomake an omelette.

A global playerWhen the first converter factory was built in Spikkestad, itwas envisaged that in time, the plant could be extended tocover the whole of Europes demand for blanks. However,the dairy sector would turn out to be concerned withsecurity of supply and would want blanks production totake place as close to the dairy as possible. Therefore,converter plants were constructed in several countries until European integration, relaxation of tension betweenEast and West, and not least safe, inexpensive transportoptions rendered the issue less pertinent. In the last fewyears, the tendency has been towards fewer and largerplants for production of blanks. Among those who havedisappeared is the very first plant in Spikkestad.

Despite Elopaks international development, staff levels

at the head-quarters in Norway have always been low. Thedairy sector is characteristically local, and marked bytradition, politics and culture. For this reason, Elopak haschosen to opt for personnel native to the markets in whichthey have operated. Proximity to the customerhas beenthe motto, so headquarters will just have to live with a fewcommunication challenges.

Elopak has chosen to expand some markets throughjoint ventures with local players today, Saudi-ArabianElopak Obeikan, Envases Elopakin Mexico and ElopakSouth Africa are successful examples of this. In othermarkets such as Japan, Korea and Australia, Elopak hasbuilt a foundation of license agreements with local partners.

Regardless of the form the work takes, there is onecondition for Elopaks continued growth within a sectordominated by much bigger players: one must have addedvalue to offer, and this must be based on attentiveness tothe consumers needs and desires. This is why ElopaksResearch and Development holds the key to the future.More about this in the next chapter.


Effective machines:

A modern production line forblanks is a large machine. Thisone is from Elopaks plant inSpeyer, Germany.


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Prescription for hygiene.


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The ability to create new products is the key to the future

for Elopak. This is why the company has one of

Norwegian industrys really intensive research and

development departments, employing almost ninety

people. And the range of skills spans far and wide:materials technology, food technology, microbiology,

chemistry, physics, sensorics, industry design, logistics...

Elopaks strategic decision to focus on the premiumsegment for beverage packaging posed a challenge forthe companys research and development resources.Packaging that should stand out on the shelves andprovide added value for the product, must itself be ofpremium quality, in terms of both functionality and design.The R&D department quickly took up the challenge andover recent years the pace of Elopaks innovation has

attracted attention, both from customers and otherplayers in the sector.

The Technology Centre with its own dairyThe foundation for the innovation of recent years waslaid in 2000, with the opening of the Elopak TechnologyCentre in Spikkestad. Here is where the bulk of thecompanys R&D resources are concentrated, with well-equipped laboratories for microbiology, chemistry, mate-rials technology and analysis, quality control and sens-orics i.e. taste-testing. Moreover, the centre deals withmarket research and industrial design, and coordinatesactivities with the department in Detroit, other researchinstitutes and specialist laboratories with which Elopakcollaborates.

Elopaks Technology Centre distinguishes itself in thatit houses an entire dairy with equipment that receivesmilk straight from the cow and large enough to servethe whole of the city of Drammen and half the county ofBuskerud. The plant has government approval to processall food types. From time to time, it undertakes assign-ments for clients in emergency situations; however it isnormally only used for testing packaging, machine parts,shelf-life and limited manufacturing for market testing.

The Technology Centre also has a complete pro-duction line for testing blanks, and enough space to testtwelve entire filling machines simultaneously. In the

course of a year, between 20 and 30 machines comethrough the big hall in Spikkestad, some of which arebuilt at Elopaks own production unit in New Hudson inMichigan, USA; others by Elopaks partner of manyyears, Shikoku Kakoki Co., Ltd. in Japan.

Flexible and effectiveElopaks commitment to innovation has resulted insteadily increasing numbers of personnel within the R&Ddivision. All are highly skilled in their fields, many holdingPhDs.

But even with one of Norwegian industrys larger R&Ddepartments, Elopak is a small player by international

standards. In terms of resources, this is naturally a dis-advantage. On the other hand, it provides a flexibility thatthe really big competitors cannot match, with skilled andhighly motivated personnel, who are ready and willing togive their all. And the department is well organised tomake maximum use of its resources. There are severalsuccessful examples of products Elopak has developedin the space of six months, while the big, heavyweightplayers in the sector can easily spend three years onequivalent projects.

Some of the explanation for the fast pace ofinnovation is also provided by the fact that Elopak enjoysexcellent technical collaborative relationships with bothclients, suppliers and research institutes such as NTNU inTrondheim, the Norwegian University of Life Sciences ins, as well as a range of international counterparts.

20 years of independent research

The history of the R&D department at Elopak covers thelast 20 of the 50 years the company has been inexistence. True enough, in the second half of the sixties,Elopak was responsible for the development of new distri-bution equipment in the form of roll containers sosuccessful they are still in use today. But as long asElopak was a licensee of Ex-Cell-O, it was principally the

Research for the breakfast table



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American company that was responsible for developmentwork. In Detroit, at that time, there were several fully-staffed units which dealt with both machine and cartontechnology.

Even though it was mechanics that attracted the mostattention at Ex-Cell-O, they suffered a run of bad luckwith their aseptic machines perhaps because thedomestic market was geared so exclusively towards freshmilk. For Elopak, this led to extremely unpleasant experi-ences in France and Germany towards the end of theseventies. After concerted efforts, they had managedto sell three of the new Green Devil machines fromEx-Cell-O, the first in Europe. And then the filled productsturned out to be anything but bacteria-free

The blunder resulted in Elopak embarking on a colla-borative relationship with Liquipakin St. Paul, Minnesota,in order to produce a new, improved aseptic machine acollaborative relationship which Ex-Cell-O somewhatreluctantly accepted. The reason the project was nevercompleted is another story, which is told in the previouschapter. The previous chapter also describes how thisbecame a major contributing factor to Elopaks decision,in1987, to take over all the rights to the Pure-Pak systemworldwide.

This take-over would have significant repercussionson the research side of things: now Elopak held soleresponsibility for all further development, so they neededto build up their own R&D division. In terms of machines,


Filling technology:

Top left the mandrelsection which shapes theblanks into cartons; on theright the cap-applicatorfor cartons with screwcaps and at the bottom,a large, modern Pure-Pakfilling machine,photographed at Elopakstest centre in Spikkestad.


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Elopak had a good starting point in the form of thesections of Ex-Cell-Os development division in Detroit,which had been included in the buy-out. Managementdecided to build up a new unit initially in Lier and laterin Spikkestad for the remaining research areas.

New aseptic challengesIt would turn out to be far from easy to get to grips withaseptic development, even when the work was runin-house. Design of the companys first own aseptic fillerwas started in the late 80s with Elopaks Japanesepartner Shikoku Kakoki, but wasnt launched until 1992.Despite the skill of the Japanese, it proved to lack therobustness required for milk.

On the other hand, the new construction provedextremely suitable for juice. Some of the complexityinherent to development work is illustrated by what isknown in the profession as the pineapple problem: themachine was tested using orange juice and found to workwell. Then a client came along who wanted to package aclosely related product pineapple juice. But a minor

difference in the surface membrane resulted in theformation of additional foam during the filling process.Small quantities of foam could splash on to the sealingarea, making it impossible to seal the carton gas-tight

The pineapple problem is one of the problems thedevelopment department resolved long ago. Today,Elopak is totally committed to its aseptic machines for thejuice market, safe in the knowledge that the productsdeliver what they promise. In addition, the market sharefor aseptic juice has developed nicely over the last fewyears.

New millennium, changing timesThe powerful process of re-organisation in relation to theestablishment of the Elopak Technology Centre in 2000heralded changing times for the product developmentprocess at Elopak. Its true to say that, hitherto, it hadbeen both unstructured and overly optimistic, and just asmuch driven by technical pride as by any potentialusefulness to customers and consumers.

This is simply not permissible in todays tough compe-titive climate. Therefore, all projects are now evaluatedby a group put together from different parts of the organi-sation; such that technical, financial, production andmarket based considerations are taken into account. Withlimited resources in comparison with their competitors, itsessential to ensure that the ideas with the greatest pot-

ential are the ones that are further developed withregular, ongoing evaluation to ensure that the projectcontinues to have the right to life.

Experience tells us that out of fifty apparently goodideas, there are only 2 or 3 that stand any chance ofsuccess on the shop shelves. And it is Elopaks ability tocherry-pick precisely these ideas that has given thecompany its position as the sectors most innovativeplayer.


A window on the worldOne of the advantages ofthe plastic bottle has beenthat you can see itscontents. This can make theproduct more appealing, aswell as make it easy to seehow much is left. Now this

is possible with thebeverage carton too: one ofthe innovations to comefrom Elopaks laboratories isthe Pure-Pak windowedcarton. The window can bemade large or small, usuallywith a creative and eye-catching design thatprovides a good impressionof the contents.

Transparency is also oneof the disadvantages of plastic bottles, in that light canaffect and reduce the shelf-life of the contents. Thisunfortunate side-effect is avoided with a carton whose

window is made relatively small for example, shaped likean hour-glass and which indicates exactly how much isleft in the carton.

Windowed cartons are being tested in individualmarkets and will be fully launched during 2008.

Tall, lean, stylishSlim is the name of the most recent version of Pure-Pak

an elegant designer model intended for products that

deserve environmentally-friendly packagingwith a modern and exclusive edge.

The tall, slim shape is eye-catching,and the exclusive look

strengthened by thedistinguishing Curve down theside and the Diamondarchedtop with its large screw cap. Aswell as this, the gable top hasalso been given a specialshape, unique to this carton.

Slim is launched inconnection with Elopaksfifty-year anniversary a forward-lookinginnovation that willsafeguard Elopaksleading position inthe premiummarket fordecades tocome.


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Two tough guys


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Many people regard packaging as an environmental pro-

blem. But packaging that protects food against spoiling is, in

reality, quite the opposite. Especially if the packaging like

the beverage carton has a minimal influence on the gre-

enhouse effect and is made from sustainable resources.

There has been little talk of beverage packaging intodays global warming debate, despite the fact that it isone of the worlds most widespread product groups. Upto a billion units are sold on a daily basis, and the figureis rising, keeping pace with the market for portion packsand an ever-larger proportion of the global populationderiving the benefits of economic development.

Therefore, ensuring that as much of the beveragemarket as possible is packed in cartons becomes a signi-ficant environmental issue. The alternative is first andforemost plastic bottles. These are made with oil as a raw

material, introducing CO2 into the environment. This is incontrast to the carton: it is based on wood pulp, whichbecomes part of the natural CO2 cycle.

Environmental awarenessWith the increasing environmental awareness of con-sumers, environmental friendliness is now becoming veryimportant for competition. Grocers and supermarketsexperience consumer reactions more directly than thedairies and juice producers. Both consumers and retailtrade are therefore vital target groups for informationabout the beverage cartons green qualities.

The packaging industry has at times been a target forenvironmental activists and politicians, and criticism hassometimes been levelled at the beverage carton. How-ever, that was in the past. Today, the environmental move-ment is a strong ally. This is due to four significantfactors: the beverage carton is made from sustainableresources; the materials can be recycled or used forenergy production without adding to total CO2 emissions;the carton is light and therefore not very energy-intensiveto transport and last but not least, it protects vulnerablefoods that it takes a lot of energy to produce.

Criticism in the past has partly resulted from ignoranceof the beverage cartons actual properties, so that it hasbeen attacked together with other types of disposablepackaging which perhaps are more deserving of suchcriticism.

On the other hand, it should be admitted that theactivists had a point when they protested against dis-

posable packaging adding to refuse quantities. BothElopak and other carton producers have addressed thisby, amongst other things, co-operating to establishrecycling schemes, so that used beverage cartons areused to make new products.

Common interestsThe beverage carton was also in the firing line when new,improved methods of measurement, towards the end ofthe 1980s, made it possible to establish the existence ofminute amounts of dioxin in cellulose, which is the rawmaterial for cardboard and paper. The carcinogenicchemical came from the paper factories use of chlorinegas for bleaching, and for the removal of the chemicals inwood pulp that could produce an undesirable taste.

The amount of dioxin was so small that there wasuncertainty as to whether it actually posed a risk tohealth. But in June 1989 the issue prompted Elopak,Tetra Pak and SIG Combibloc, along with raw cartonmanufacturers in Europe and the USA, to come togetherfor the first time. There was a realisation that the dioxinproblem had to be tackled. One result of the co-operationwas that after a year, a new production process wasdeveloped that did not involve the use of chlorine gas; thesector was taking no chances either with its ownreputation or the health of consumers.

This new co-operation also led to the creation of the

organisation called theAlliance for Beverage Cartonsand the Environment(ACE), which plays a key role indescribing the factual basis that documents theenvironmental properties of the beverage carton inrelation to other types of packaging. ACE alsoprovides an information service for politicians,environmental organisations and the generalpublic, and contributes to the beverage cartonbeing taken into consideration in workingwith EU laws and directives. Elopak hasalways been a key and activeparticipant in both ACE and thesectors other organisations.

A focus on environmental responsibility


Green values: Beverage cartons from Elopak are carbonefficient, having only a minimal effect on global warming. Rawmaterials come from evergreen forests that are replanted.


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Elopak goes into its next fifty years with a clear strategy

of focusing on packaging premium products. Future

development will be two-dimensional: geographic growth

and a stronger organisational alignment and

co-ordination.

The first fifty years of Elopaks history have been markedby ups as well as downs. Now the company enters itsnext fifty years in the continuation of a period of solidgrowth, in an atmosphere of confidence, knowing whatthe company will become, and how it will develop. Elopakhas made a strategic decision to concentrate activitieswhere it already leads the way packaging for premiumproducts. That is, fresh products, aseptic products thatmake extraordinary demands on quality, and highlyprofiled, specialised products where packaging is vitalto a overall impression and the ability to attract the

consumers attention.

A well thought-out choiceThe choice is most definitely a consequence of thetendency for the market to split in two one segmentwhere low price is decisive, and one premium segment,where price is less important than quality. At the sametime the mid-range segment loses significance.

With such a dominant player as Tetra Pak as a com-petitor, there is little point in competing on price in themarket for standard aseptic products. Neither has it beenpossible in the plastic bottle segment, where Elopak builtup a modest business over 10 years, to provide somet-hing that others couldnt do better. Activities in this areawere therefore recently wound-up; in addition, plasticbottles are environmentally unsustainable in contrastwith the beverage carton, which will gain new marketshares in pace with increasing awareness of consumersthat greenhouse gas emissions have to be reduced.

Successful innovationIn line with this strategy Elopak has launched a series ofdesign-protected cartons over the last few years that con-tribute to differentiating the products they contain. This ispackaging that contributes to positioning quality products,with designs that make them stand out, combined withproperties that fur ther strengthen Pure-Paks usual user-

friendliness. The pace of innovation has attractedattention and the innovations themselves are well receivedby both beverage product manufacturers and consumersfrom different corners of the earth. Moreover, it is a realfeather in the cap for Elopaks product developers that thenew packaging is regarded as major news in terms of themarket, but nonetheless does not demand major invest-ments from either the customers or Elopak itself.

Principal areas of expansionIn addition to concentration on the premium segment anda strengthened commitment to innovation, there are twoother dimensions to Elopaks plans for further develop-

ment. One is geographic expansion; the other is astrengthening of the Elopak organisation in order tocreate a more integrated company.

Geographically, Eastern Europe, Russia and theAmerican continent will form the primary areas of focus.These are areas that Elopak is already familiar with, and

where growing markets are opening up with real purchas-ing power. There is a greater chance of successfulexpansion in these areas, where the company is alreadyestablished, than in those parts of the world where onehas to start from scratch.

Eastern Asia, not least China, are of course areas ofextreme interest. Elopak already has local licenseesworking with the markets in Japan and South-Korea and has had its own representative office in Beijing since2000.

Here however, experience has shown that it isextremely demanding to penetrate the market in theworlds most populous country. For a relatively small

The way ahead


Leading Elopak into the future: Niels Petter Wright took overas Chief Executive Officer of Elopak in May of this anniversaryyear.


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player such as Elopak, this could easily become tooresource-demanding. The building of the plannedconverter plant for Pure-Pak blanks in Shanghai hastherefore been called off, and management is working ondefining a new strategy for China and Eastern Asia.

Future independent growthThe other major dimension for Elopaks further develop-ment, the organisational dimension, must be seen in thelight of the fact that an aggressive and determinedElopak should grow independently without the marketweight that acquisition of the twice-as-large, Swissbeverage carton manufacturer SIG would have given but with nonetheless, a greater opportunity to develop onits own terms from the position of third-largest player inthe market.

Third place is a good attack position for those with asharp competitive instinct, and Elopak is well equipped togo on the offensive, with short chains of command andthe ability to re-organise quickly.

Moreover, a great many clients have little desire to

see the dominant Tetra Pak and heavyweight Rank Group whose acquisitions include SIG and a couple of med-ium-sized American players gain more market powerthan necessary. They see the value in Elopak behavinglike an aggressive, innovative player who bring balance tothe competitive picture.

United and visibleAnd although the buy-outattempt was not successful, itdid provide a wealth of newexperience and knowledge.Amongst other things, the com-prehensive processes andreports that had to be made,and which involved a greatmany personnel, contributed toproviding Elopak with a deeperinsight into its own strengthsand weaknesses. This givesthe company a stronger plat-form from which to plot acourse for the future.

The implementation ofstrategies and plans will how-ever be challenging. Elopak isvery international: only 7.5 per-

cent of its employees are inNorway. Many of its unitsaround the world are, further-more, the result of acquisitions,with significant differences incompany culture on top ofnational differences. Elopakhas a tradition of employinglocal managers: exportingNorwegian personnel to tellGermans or Saudi-Arabianshow to run their businesseshas never been an aim.

All these factors combine to make managing thecompany a real challenge, particularly in the light of thefact that it is now vital to make Elopak more united andvisible in the market, due to globalisation and theimportance of putting Elopaks collective resources toever better use. Sub-cultures can quickly becomeobstructive. Its important to find effective structures thatensure integration and unity, irrespective of alldifferences. Amongst other things, Elopak must have oneintegrated commercial management team at the top,whilst at the same time ensuring that there is littledistance between customer service and decision-makers,locally as well as at group level. This is a vital quality tosafeguard. Elopak is close to its customers and theirissues determine how Elopak acts.

All this puts great demands on the individualemployees drive and enthusiasm. These are attributesthat have never been difficult to mobilise: Elopak isliterally bursting with people who are passionate aboutboth the company and its products. Along with theknowledge and skills of its people, this passionate

participation is the companys most important asset.



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Thank you!The Editorial Board would like to thank the many Elopak employees who

contributed to this booklet in the form of conversations, contributions,facts and opinions on the text. We also would like to thank two retirees,

ex-Sales Director Harald Riiber and Sales Manager Tron Bye, for their

valuable contributions.

Hardcopy sourcesThe presentation of Elopaks establishment and early years is, to a great extent, based on source material fromElopaks archives, among them a memo by Edgar J. Johannesen in J. L. Tiedemanns Tobaksfabrikk; company

magazine Elopak Inside from February 1997; the lecture Ngra minnen frn den svenska mejeri- ochfrpakningsmarknaden fre och efter introduktionen av Pure-Pakwritten by Arne Stllberg, ex-Manager of Elopakin Sweden. The presentation of Ex-Cell-Os role in the development of the Pure-Pak system is based partly onunpublished notes and lectures by Ex-Cell-O Corporations management, partly on the 1955 study Ex-Cell-OCorporation under the auspices of Harvard Business School, and on articles taken from various, more recent tradejournals. Among the sources for the sections on the development of the milk carton, Ansgar Welle in particularshould be mentioned here: Om pappflasker for K-melk, dissertation from Norges Landbrukshgskole [now theNorwegian University of Life Sciences], 1951. Information on the introduction to Norway of disposable packagingfor milk was taken from the following books: Sigve Erland, Meieribrukets tekniske utvikling, Trondheim 1981; KarlNilsen, Meieriet i Asker 50 r 1938-1988, Asker 1987; Kre J. Monsen, Historien om meieriemballasjen, NorskeMeierier 1987. Certain information in the booklet is also taken from or confirmed in a range of trade publications,journals and Internet sites, the details of which it is beyond the capacity of this publication to reproduce.

Elopak 50 years and ready for morePublished by Elopak AS, Norway, September 2007. Reproduction only if sources are credited.Editorial Board: Richard Taylor, Jutta Pinnerd, Erik Akre, Hans Gudmund TvedtText: Hans Gudmund Tvedt, Wittenland kommunikasjon Ltd., OsloGraphic design and production: Kampen Grafisk a.s, Oslo

Copyright: Elopak AS, 2007. Pure-Pak is a registered trademark of Elopak AS

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50 Year Anniversary Book

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