The story of GIZEH Verpackungen GmbH began with rolling paper, almost 100 years ago. At first glance, the path to becoming a technological leader for solid plastic packaging seemed a long one. However, one look at our company’s history will tell you that we had a magic touch for innovating and tapping into future markets right from the start.
GIZEH Verpackungen is a medium-sized family-run business from the Bergisches Land area and is now one of the go-to places for technically sophisticated plastic packaging in Europe and North America. Our client portfolio is a list of the who’s-who in the European food industry: Nestlé, Ferrero, FrieslandCampina, Müller and many more. Using top-notch production technology, GIZEH is an expert when it comes to all the standard manufacturing and decoration processes, producing over 3 billion plastic containers each year. However, the company’s history began with a different material altogether: paper.
Cigarettenpapier-Verarbeitungsgesellschaft (Rolling paper processing plant)
GIZEH’s story began in Cologne in 1920. Soldiers returning home after the First World War had brought the trend of cigarette rolling with them. Special paper manufacturer Schoeller & Hoesch recognised the potential and set up a company to produce rolling paper in Cologne. The name GIZEH was thought up by one of the partners during a trip to see the pyramids in Egypt. On the 2nd January 1920, “GIZEH Cigarettenpapier-Verarbeitungsgesellschaft” was entered into the commercial register.
Despite economic and political turbulence, the company initially experienced a positive development trend during the time between the two world wars and became a well-known brand. However, the end of the thirties was a bad time even for GIZEH, and especially for Jude, the CEO at that time. He succeeded in relocating to America before the Second World War broke out, but not without making sure that measures were taken to protect the machines at the base in Cologne. As a hiding place, he chose a pub in Bergneustadt - at that time, this was an isolated village with a population of just 5,000, located deep within the Bergisches Land, around 50 kilometers east of Cologne.
A new start in Bergneustadt
This proved to have been a wise decision. Whilst air strikes completely destroyed the GIZEH plant in Cologne in 1944, the war left hardly any traces in the Bergisch province and the machines were kept safe and sound. This meant that production could start again shortly after the end of the war - in the pub! During the week, rolling paper was produced on the dance floor, whilst at weekends, the machines were moved aside so people could boogie the night away.
A short while after, the company started to do well once again - cigarettes were treated almost like currency in the postwar years and rolling paper was a big business. In 1948, industrial production began at the K.S. Wahlefeld company and in 1954, the foundations were laid for our own production plant on Breiter Weg in Bergneustadt. Our company headquarters are still located there to this day.
First steps into the packaging industry
In the 1950s, turnover in the rolling paper business was constantly on the increase. However, after this initial boom, the potential for growth in this market soon reached its limits. At GIZEH, we got thinking about how we could expand our product portfolio and in 1957 we started to produce paper punch cards, among other things. At the same time, we were experimenting with paper packaging - and successfully so: in 1959, we started production. We initially manufactured butter wrappers from pergamino paper, with milk and whipping cream cartons made from paraffin paper following shortly after.
Plastic is the future
This new packaging business was growing fast: by 1964, 140 million products had already been produced. The sixties also saw the start of the “plastic era” and GIZEH recognized the trend early on. In 1964, we acquired the first injection molding machine to produce pots for dairy products and in 1966, series production of deep-drawn plastic packaging for the dairy industry began. In the following years, the company became one of the pioneers in producing plastic dairy packaging. Taking early action had paid off once again: at the end of the sixties, the paper packaging industry took a dramatic nosedive. The reason? The so-called “war on paraffin”. It was suspected that the paraffin paper used for food packaging contained carcinogenic substances. The drop in turnover was so colossal that the entire paper packaging branch had to be ultimately closed down. From then on, GIZEH’s packaging business focused solely on plastic packaging.
Expansion and stagnation
During the fifties and sixties, the market experienced changes which were much more fundamental than just in terms of material: when the European Economic Community was founded in 1957, the hub of the European Union was created and new opportunities arose in other European countries. GIZEH was one of the first medium-sized companies to make use of these possibilities by opening up the first foreign production plant in Bouxwiller, Alsace.
The years which followed were characterized by reconstruction, growth and expansion, however a period of stagnation hit during the eighties and nineties.
The management at the time neglected the very things that had previously characterized GIZEH: research and development, investment in production technology and tapping into new fields of business. Even our customers were treated poorly. Turnover dropped in all three of our branches (smoking accessories, plastic packaging and tableware) and by the mid-nineties, GIZEH was in need of major restructuring. During this crisis period, a young reorganization manager joined the company in 1996: mechanical engineer Ralf Jung. His task was to clean up the product portfolio, focus business on products with a promising future and better orientate the group to the needs of the market. Jung got to work. However, just one year later, he experienced a huge setback.
Sale and divestiture
A partner in the group became bankrupt due to other investments and to appease his creditors, he was forced to sell the GIZEH group. As such, in 1997 it was sold to “Deutsche Beteiligungs AG”, who did not have any long-term projects for GIZEH. Rather, the plan was to quickly divide the group into units based on the market and then to resell them for a profit, and so the company was broken down into its individual parts. In 1998, the smoking branch was sold to the Dutch group Mignot & De Block and the drinking container branch went to RPC Tedeco a short while later. Only the packaging branch was left, which had made losses in the previous years. Investors were not interested. However, there was one individual who knew the exact potential of the business and believed in it: manager Ralf Jung.
A risky new beginning
At forty years of age, he made the decision to take over the company. The risk was high. GIZEH employed 400 members of staff and had a turnover of 30 million euros with an operational loss of 3 million. However, Jung had substantial knowledge of the plastic industry thanks to his previous work and he recognized that the company possessed both excellent expertise and fantastic employees. He had always wanted to be an entrepreneur, and now here was his chance to get involved at a high level. In 1998, he took over the business and became the sole shareholder and managing director of GIZEH Verpackungen GmbH.
After he had secured financing for current operations, he drew up a restructuring concept. The key features of this concept were: significantly increase turnover with existing customers, increase productivity and no drastic staff layoffs where possible.
However, the following year, his nerves were put to the test. A huge increase in the prices for raw material ruined all his financial planning. As such, GIZEH Verpackungen registered a hefty loss in 1999. However, the strategy began to take effect from 2000. By 2001, turnover had increased by 50 percent and the company finally made a profit again.
From a business in need of restructuring to a leader in innovation
By 2003, GIZEH was stable enough to set about with the second step in business development. The company needed to get back to what it excelled at in the first place. “Our strong points were, and are, our innovation, process expertise and excellent production skills,” explains Ralf Jung. “And so it was the next logical step to position GIZEH as the specialist in technically sophisticated and customized packaging solutions.”
As such, he invested in innovative technology, such as the IML process, which was new at that time and GIZEH made significant contributions to its gain in popularity. In 2004, GIZEH erected the most modern facility for pots in Europe, located in Elsterwerda, Brandenburg, and in 2005, GIZEH enhanced its position on the French dairy packaging market with the acquisition of competitor Coembal in Angers, France. The company invested a total of 50 million euros in new systems and technology between 2004 and 2007. In this timeframe, turnover increased from approx. 45 to 90 million euros.
The future: carefully-judged growth
Today the company is healthy and the growth trend has been constant since 2007. Most recently, GIZEH took the leap across the pond and opened its first overseas plant Brantfort (Ontario, Canada). With highly innovative products, such as highly transparent EVOH containers with a barrier layer, unusual container geometries and, most recently, the world’s first digital printing process, GIZEH stands out from the crowd time and again. Thanks to the team of 18 employees who work in the development department, as well as our own tool construction subsidiary, we can develop our very own innovative processes and then implement them for the benefit of our customers.
And GIZEH wants to keep on expanding in the future, but carefully and in their own right. “Our beliefs are those of a family business,” stresses Jung. “This requires a certain corporate culture and means long-term partnerships are important to us - to our customers and our employees. That is the basis of our success and it should stay that way.” As such, GIZEH want to consolidate and enhance their position on the market as an independent family business whilst remaining one of the main drivers of innovation in the sector. The company has demonstrated that it is capable of doing so many times throughout its history.