Season 5, Post 44: Clockwork innovation
Say Switzerland to most people and the image first formed is a bucolic one of majestic mountains and cows grazing in Alpine pastures. If not, then you might think of clocks, chocolate or cheese. All clichés for sure, yet this land of fewer than 9m citizens has also been ranked as the most innovative country in the world for the 13th consecutive year. Results were released last week, with 132 countries assessed.
The World Intellectual Property Organisation (WIPO) uses seven criteria to compile its rankings. These span patent applications, researchers as a percentage of the population, the financing environment for start-ups and the regulatory landscape, among others. WIPO cited Switzerland’s world-class research institutions and skilled workforce as key ingredients in fostering innovation. The country was closely followed by Sweden, with the US, the UK and Singapore completing the top-five rankings.
Against this background, it was timely that your author recently spent a day in the company of SIG Combibloc, a leading Swiss business. He was privileged to have the opportunity to visit the company’s European ‘innovation hub.’ This 5000 square metre facility is brand new and will formally open for employees before the end of this month. It is billed as being “quite unique”, according to our host – a space for co-creation, where both start-ups and suppliers will be welcome. For those unaware, the business was founded in 1853 and was responsible for inventing Europe’s first beverage cartonin 1930. Fast-forward to today: SIG is the number-two player in the aseptic carton packaging market globally, behind only Tetra Pak.
When asked to quantify the importance of innovation, SIG’s Chief Executive described it as being “integral for superior value creation.” The focus at SIG is on how to make its packaging solutions more sustainable, by reducing their aluminium and plastic content to as great an extent as possible. The material science being undertaken by the company continues to push boundaries. SIG is targeting cartons with 85% paper content by 2025 and 90% by 2030. It is at c75% currently. According to its Chief Technology Officer, the “science can’t go fast enough”, but “every step in the right direction is one worth taking.”
23 November 2023
The above does not constitute investment advice and is the sole opinion of the author at the time of publication. Heptagon Capital is an investor in SIG Combibloc. The author of this piece has no personal direct investment in the business. Past performance is no guide to future performance and the value of investments and income from them can fall as well as rise.
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Alex Gunz, Fund Manager
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