Innovation

This innovation consists of a full production process based on a circular economy approach. Bio Pappel has three different types of factories:

1. Paper production
2. Paper transformation
3. Paper recycling

In the paper production factories (1st type), they have developed an energy co-generation system that allows them to recycle water and energy through the vapors generated by the production process, and use that energy to generate all the electricity utilized in the "1st type" factories, plus hub it to "2nd and 3rd type factories." This process allows them to recycle 70% of all the water consumed and to operate on a self-sufficient scheme in terms of energy consumption.

Besides water and energy recycling, Bio Pappel has also developed a reverse logistics system with its main customers, which allows them to recollect most of the carton boxes sold, recycling and transforming them into raw materials again. This process expands the life cycle of the paper by seven times and avoids the purchase of expensive (most of the times imported) cellulose required to produce paper.

Inspiration

More than 15 years ago, Bio Pappel's president, board and family member Ing. Miguel Rincón, had the vision of changing the paper derivatives industry in Mexico by applying a full innovation program to their production process, which was based on the premise of producing paper without cutting a single tree. This sustainable approach has become one of the main competitive advantages for the company, both in their B2B business unit selling carton packaging to important FMCG companies, as well as in their B2C unit selling finished products to retailers (e.g., notebooks, printing paper). The execution of Mr. Rincón's vision was originally challenged by the shareholders/family members, as it included an important investment in new equipment. Mr. Rincón was intelligent enough to "sell" the idea to the committee by highlighting the positive impact this new approach would have both to society and the company. Time eventually proved Mr. Ricón right, as Bio Pappel is now the leading paper producer in Mexico and Latin America, which is a very profitable business.

Overall impact

Since Bio Pappel started its transformation process into a sustainable company 15 years ago, several milestones have been achieved, which have impacted in a positive way the company, the environment, and the society. The paper and derivatives industry is well known for having a considerable impact due to the amount of water required and the usage of a limited raw material (cellulose) extracted from trees. Although this last issue has been partially addressed by utilizing certified sustainable cellulose in most of the paper-producing companies, Bio Pappel's production model has positively challenged the status quo by taking it a step forward and creating an almost self-sufficient operation.

Through the employment of 27,000 direct and indirect workers and business relationships with 2,800 small companies, Bio Pappel has been able to succeed as the main paper manufacturer in Mexico and Latin America. It has increased its net sales by 46% in the last 2 years, and it has been able to save the equivalent of 73 Central Parks in the same period of time.

Business benefit

This innovation has given the company a competitive advantage that has materialized in 41% net sales growth from 2015 to 2017, and a profit per share growth from 0.40 USD to 3.60 USD in the same period of time. The benefit has been mainly generated through cost reduction and production differentiation, based on three main cornerstones:

1. Raw materials. Bio Pappel recycles 1.52 million tons of paper every year, which is the main raw material used in the production of their products. Even though there are important logistic costs involved in the recycling process, the recycled raw material is less expensive than the virgin cellulose used to produce regular paper.
2. Production costs. By having energy co-generator factories, Bio Pappel is able to recycle 70% of the water used, as well as to operate under almost fully self-sufficient energy scheme, which has a positive impact on the production costs.
3. Product differentiation. Having a sustainable approach and an eco-friendly system has allowed Bio Pappel to develop new product lines for the consumer (e.g., scribe ecologic), as well as to become a strategic supplier partner to major FMCG companies (e.g., Pepsico) and to enter new markets (e.g., Colombia and the United States).

Watch video on YouTube

Social and environmental benefit

By applying a circular economy production approach, Bio Pappel has been able to save 1,350 trees per day, which is equivalent to saving the whole Chapultepec National Park (almost twice the size of Central Park) every 20 days. They capture 5.7 million tons of carbon dioxide, which is eight times more than what they issue and is the equivalent to taking 1 million mid-size cars out of circulation every year.

In regard to society, Bio Pappel generates close to 11,000 direct jobs and 16,000 indirect jobs, having a very tight policy on labor equity and "no discrimination." They have provided 6,500 hours of community work through their three main social groups—Enrollarse, Escuelas Verdes, and Fundacion Bio Pappel—and created business (direct or indirect) for 2,800 small companies nationwide.

Interview

Daniela Rodriguez, Corporate Social Responsibility Manager

Watch video on YouTube