Earlier this year, Polish canmaker Can-Pack bucked the trend for British firms moving east and opened a £40m beverage can plant in the UK - the first to be built here for nearly 20 years. Josh Brooks meets managing director Jerzy Laszcz

It's no longer a surprise for a British company to invest in Poland - in fact, it hasn't been for nearly 20 years. Yet, even two decades after the fall of the Berlin Wall, heads turn when that investment comes the other way.

Can-Pack has done exactly that. With this January's opening of a new £40m factory in Lincolnshire, the Polish company has set out its stall to take on the three established players in the UK canmaking market.

Sited in a cavernous former MFI warehouse in Scunthorpe, the factory is the first new beverage can making facility to be built in the UK since the late 1980s, when Rexam and Ball Packaging Europe built their plants in Wrexham and Rugby respectively.

So far, one line is operating inside the 36,000m2 building, producing 440ml and 500ml cans for the beer market both in the UK and elsewhere in western Europe. The start-up of a second line - for which foundations have already been laid - would push the factory's production to 1bn cans a year.

In a mature market where, until January, just three players operated - Ball, Crown and Rexam make up the dominant trio - you may be forgiven for seeing any newcomer's arrival on the UK canmaking scene as somewhat brave, foolhardy even.

Yet Can-Pack is no plucky upstart. Although new to the UK, the company is a formidable power in drinks packaging that has spent the past 20 years, since the opening of the former Eastern Bloc economies, building an international canmaking empire. Created in a buy-out of the state-owned Opakomet steel can business in 1989, the company, with foreign financial investment, established itself during the 1990s as a major player across central and eastern Europe.

In the past five years, that expansion has accelerated with a rapid succession of acquisitions and new factory openings across Europe and the Middle East. Just this year, on top of the Scunthorpe opening, Can-Pack has opened a new plant in India and set up a joint venture in Egypt. While sales figures are not made public, overall, the group's production capacity stands at more than 7.5 billion beverage cans, 23 billion bottle closures, almost 1 billion food and general-line cans and about 450 million glass bottles and jars.

Yet the company's investment in the UK is significant. As the group's first can production site in western Europe, it marks an end to the assumption that western companies necessarily have an upper hand in business terms.

Big-name contracts
Indeed, Jerzy Laszcz, the factory's managing director, describes the building of the factory as a "revolution" - although one that came about with some solid backing. The factory's biggest customers are Carlsberg and AB InBev, two names familiar to the UK market that have also worked with Can-Pack elsewhere in its production network.

"The first thing was to have contracts. First, customers, then a location, then build the factory," Laszcz says. "Before you invest you always need a customer."

Laszcz, a jolly packaging veteran who spent 15 years building Silgan White Cap's business in Poland before joining Can-Pack in 2007, says that the company looked at more than 25 possible locations across western Europe before plumping for Scunthorpe.

Although he hints that it's not a great place to spend weekends, Laszcz is adamant that Scunthorpe is the ideal location to set up a manufacturing business - he describes north Lincolnshire as a "region with a huge industrial past", making for an easier recruitment process into the manufacturing positions at the plant.

Press concern
But staffing has been a source of concern in some quarters, not least the local press, which has criticised the business for employing primarily Polish staff in the start-up phase. Laszcz responds, however, that it would have been impossible to start up the plant with an entirely local workforce. "We can't train them in a competitor's plant," he says.

And while a majority of the 150 or so staff are employed on fixed-term contracts from Poland, he is adamant the business will become predominantly British. "This transformation from mostly Polish to mostly British workers will take another couple of years. But we are a British company founded under British regulations."

He is equally bullish about the business's prospects. For a start, he is clear in his plans for Can-Pack's position compared to Rexam, Ball and Crown. "There's an ambition not to always be in fourth place," he says. "It's easy to be best among very weak companies or in markets where you can have an almost monopolistic position. But you can check your strengths only if you are competing with the strong companies or in the strong countries."

Yet despite being a good place to do business, the UK has its particularities compared to eastern Europe. One area of difference, Lazcz says, is in portion sizes; his factory is, after all, producing the 440ml can size that is growing in popularity in the beer market despite being just under four-fifths of a pint.

"Retailers are looking for smaller packaging and consumers may be happy to pay the same price for 440ml as for 500ml. It's a strange situation. In central and eastern European countries, people are not happy to pay a lot for small containers. Here it's the opposite."

As for current and future projects, the company is busy collecting manufacturing certifications and standards to set itself up as a world-class manufacturing site and to future-proof itself. Once that is done, Laszcz says, decisions can be made as to when the second line could be installed. But, of course, that decision will not be taken lightly.

"It's easy to talk about investment but there a big human aspect, too - installing a second line means not just machines but probably 140 people as well. Training takes time and money. It's so important to have the manning issues right," he says.

How and when the next phase of Can-Pack's development in the UK happens remains to be seen. But as long as sales of cans remain strong - the UK consumes around 8.5bn cans every year - and the economic power of central and eastern Europe continues to increase, expect Can-Pack to become a fixture in the UK canmaking market.

CAN-PACK: THE CREATION OF A DRINKS PACKAGING EMPIRE
1989 Creation of Pol-Am-Pack, the first unit of the Can-Pack Group, from the Polish state steel can maker Opakomet in Brzesko
1992 Can-Pack founded in Krakow to make 330ml two-piece cans
1993 Start-up of beverage can factory in Brzesko
1995-1997 First expansion outside Poland with founding of companies in Ukraine, Russia and Romania
1999 Establishes Arab Can Co to manage factory in Sharjah, United Arab Emirates
2001 Greenfield beverage can factory built in Bydgoszcz, northern Poland, making 1bn cans per year
2003 New beverage can factory opened in Vyshgorod, Ukraine
2005 New beverage can factory opened in Bucharest, Romania; Orzesze glass works near Krakow acquired and glass cullet processing and treatment plant established
2006 Subsidiaries acquired in Slovakia, Czech Republic and Turkey
2007 Factory start-up in Dubai; acquisition of crown cork maker Tapon France in southern France
2008 Start-up of logistics centre in Oswiecim, southern Poland
2009 Start-up of production of 44cl cans at plant in Scunthorpe, UK; joint-venture company established in Egypt; start-up of beverage can factory in Aurangabad, north-east India

JERZY LASZCZ ON...

Doing business in the UK "Business here is very competitive. It's good for us because we need to know where we are."

What he looks for in staff "To hire someone to a company like this, I like someone to be a factory animal. Not everybody is willing or comfortable to spend hours in the factory. It's a very specific ability."

The future for Can-Pack in the UK "We are aggressive and we are still thinking about development. It's difficult to talk about plans as we need to see what happens here; what the potential is. Then we decide the next steps."

Manufacturing in communist Poland "They [the state] organised nearly everything that was needed but not in the right proportions."

British consumer behaviour "People are very concerned with savings - on your supermarket receipt, it will say in very big letters how much you saved and in very small letters how much you spent."

Can-Pack's competitive advantage "I believe that we have a technological advantage because we are not starting in the 1940s, 1950s or 1960s but in the 1980s or 1990s."

Weekends in Scunthorpe "There are very nice, charming places in England. We are discovering the country. But we have a lot of work to do here at the factory."