Goglio (Tianjin) Packaging Co. Ltd is the Tianjin-based subsidiary of Goglio Group. Established in 1850 in Milan, Italy, Goglio is a world leader in providing flexible packaging solutions, especially – but not only – for the food & beverage industry. The Group started its internationalisation strategy in the 1970s, which has led to the establishment of several production plans in Europe, Americas and Asia. For more information, visit the official website of Goglio Group.
Goglio (Tianjin) Packaging Co. Ltd was incorporated in 2004 and began operations in 2006. Tianjin was chosen as its location because it is a major port in China, and specifically the one with the highest volume for bulk agricultural and processed food for import and export. At the same time, there were no other manufacturing facilities in Tianjin of special packaging: Goglio was the first.
Furthermore, since the very beginning, the company received full support from the local authorities, mainly through the provision of infrastructure as well as administrative and financial support. Supply chain considerations also played a fundamental role: one of Goglio’s main business partners is a company that sterilises the packaging after its production, based directly in front of Goglio’s factory and thus reducing significantly the costs.
Evolving Market, Demand and Clients
Initially, the company focused on providing flexible packaging solutions for tomato paste for the Chinese market. Over the years, it expanded to juice concentrates, and regularly introduces new packaging applications in line with clients’ needs, for instance for goji, blueberry, aloe vera, onion concentrate, carrot purée, etc. The plant is also active in nylon packaging for the automotive industry, but the segment is relatively marginal; other flagship products abroad directed e.g. to the pharmaceutical industry are not produced in China, as the company does not have the license to do so. From its base in Tianjin, the company also manages all the logistics and sales operations for the Southeast Asian market, which sees a strong demand of packaging solutions for coconut and pineapple juices. From Tianjin, the company also exported some of its products to the Italian headquarters and other plants across Europe.
Globally, Goglio Group’s biggest business segment is packaging for coffee. Until recently, however, this was not the case in China as domestic demand was relatively low. Things started to change around three years ago: many large companies are investing heavily in coffee in China, contributing to a steady growth of the market. For this reason, Goglio HQs decided to expand the plant in Tianjin, by fully localising the production of coffee packaging solutions directed to the Chinese and Southeast Asian markets – not only the packaging materials, but also the machines to package coffee bags, the laminates and the valves. This led to an increasing preponderance of Chinese and Southeast Asian exports at the expenses of those to HQs and Europe (traditionally accounting for around one-third of the Tianjin plant’s total exports). Coffee packaging is now Goglio Tianjin’s key focus. Among key accounts, there are both domestic enterprises (mostly state-owned) as well as foreign-invested enterprises (such as Lavazza and Starbucks).
Goglio Group offers a comprehensive range of packaging solutions for coffee.
It is noteworthy that, in addition to product quality, one of the main reasons Chinese clients choose Goglio’s products is to increase brand awareness: Goglio is a global leader in the sector; by working with Goglio, clients gain in reputation and are bridged to foreign markets.
Staying Ahead of the Competition by Pursuing Excellence, Acting Locally and Working Closely with Consumers
When Goglio’s plant was established in Tianjin, it was the city’s first ever manufacturer of special packaging, specifically high oxygen barrier flexible packaging. Now, however, the product has become very mature and there are several competitors active in the industry. Overall, competition is welcome and seen as a positive aspect as it accelerates the healthy development and quality growth of the entire market. There are, however, cases of a few competitors which do not appear to compete in a fairly manner, by using chemicals or other techniques that severely affect the quality of the product and the safety of the food, taking advance of overall less comprehensive rules in China on food packaging, at least compared to the EU (for instance, test reporting requirements on chemical migration from packaging into food are very light). This kind of competition is negative and not healthy, albeit not illegal.
To compete with a growing and increasingly strong number of domestic competitors, it is essential to:
- Act locally, in a quick and effective manner, as Chinese companies do. Initially, HQs overseas might resist such approaches; but if results are regularly delivered and trust gained, while being deeply committed to the company’s long-term growth in the market, more leeway for the local subsidiary will increase.
- Continuously improve and provide an excellent service. Goglio’s products are generally priced higher than its competitors. This is because Goglio offers a comprehensive solution, not just a product: it acts as a bridge between China and overseas market and provides excellent services. Furthermore, it is a company with strong ethics, commitment and history: these elements cannot be easily copied and offered by competitors.
While Goglio’s core R&D continues to take place in Italy, the Tianjin plant carries further development and applications to meet the needs of local clients, coming in the form e.g. of different materials, glue, connectors, etc. This also leads to the company filing some patents in China. Strong, quick and effective cooperation with the consumer is fundamental to remain competitive. At the same time, since very recently it is becoming noticeable a trend by which local clients actively seek and propose deeper forms of cooperation and partnership. This is why it is not excluded that, in the future, Goglio Tianjin may invest in a local R&D centre, either alone or with a university.
Minimising HR turnover by empowering staff
Goglio Tianjin currently employs around 180 staff. The turnover rate in Tianjin is relatively low – perhaps also in part due to the broader economic situation in China after the end of pandemic-related restrictions. We have quite a number of cases of employees who have been working with us for several years.
What does Goglio do to retain its staff? According to Mr Turrina, companies need to keep pushing, granting sufficient space and autonomy to employees and enabling them to perform and grow. Goglio Tianjin’s organisational structure is relatively flat, everyone is involved to share feedback and contributing to decisions. Sharing and involvement are key, as they keep all employees aligned towards the same direction and targets.
A team building day for the Goglio Tianjin Packaging team
To give an example of how this approach is implemented in practice, Goglio Tianjin has implemented an internal programme through which any employee can create cross-cutting, independent teams to work on a certain idea, improvement or solution; they choose their own team leaders and execute the project not under the direct supervision of their respective managers. At the end, they might receive an award directly from the company management for their project. This initiative has, so far, been extremely successful and led to several interesting results.
Growing Interest and Commitment in ESG Issues: Launch of a 25-Year PV Project
The growing attention towards ESG issues is a noticeable trend, among both foreign and especially domestic companies – which are facing increasing pressure to deal with new requirements such as those resulting from the EU Carbon Border Adjustment Mechanism. However, so far, it seems that such trend is largely limited to large-scale companies, rather than small and medium-sized ones.
In parallel with the plant expansion initiated in 2020 to enter into the coffee packaging segment, and the skyrocketing increase of energy consumption that would result from the expansion, Goglio Tianjin initiated a new project to increase power generation in the plant and thus reduce energy costs.
An aerial view of the photovoltaic panels covering the roof of the Goglio Tianjin Packaging plant
The main challenge was that Goglio did not have the extensive financial resources required to initiate such a project, but only a large amount of physical space. Therefore, an external partner was needed to finance the project. Through its network of contacts, and in particular through the facilitation of another Italian company actively operating in China in the sector, Goglio Tianjin identified a large domestic manufacturer of PV panels willing to invest in the project: the manufacturer would install photovoltaic panels within the plant, using for free the large yet not utilised physical space; Goglio Tianjin would gain from being able to purchase the power generated by the partner at significantly discounted prices. The project became fully operational in December 2022, and now covers 25% of the plant’s power demand.
There were quite a number of challenges during the project, most of which resulted from the fact that nothing similar had ever been done in that area. The local administration was fully supportive of the project: it only requested that the domestic manufacturer registered a business entity within the Tianjin FTZ (i.e., where Goglio Tianjin is based). At the same time, it provided support and flexibility in completing the extensive paperwork required for getting the necessary permissions and going through several rounds of inspections. Had the project not been implemented at that time, i.e. in parallel with the plant expansion and during a period of economic slowdown as result of the pandemic, probably it would not have received the same level of support. In China, a large part of the business is about finding the right timing.
 Chemical migration refers to the transfer of chemical compounds from or to the packaging film that occurs upon contact with the food. Packaging materials “are like sandwiches”, featuring different materials bounded together by glue and inks, so migrations of chemicals could happen from the middle layers with glue and inks towards the surface in contact with foods.