With a history spanning over a century, Filtrona knows a thing or two about business adaptation and success. The specialty filter manufacturer has seen remarkable change and growth over many years and evolved into a global leader in its industry.
“Over the years, we’ve predominantly been a global business working with tobacco companies, with core competency in making specialty filters,” Filtrona CEO Robert William Pye tells The CEO Magazine.
“This business wouldn’t have survived a hundred years without innovating and changing.”
Serving 120 countries through nine production sites, two innovation centers and an accredited lab, Filtrona provides the design, testing and manufacturing of specialty filter solutions and related scientific services.
A winning strategy
Filtrona’s origins trace back to 1854 when Moritz Bunzl founded a haberdashery in Bratislava, Austria. By the late 1920s, the company ventured into filter production and in 1948 developed its first dedicated filter manufacturing plant in Jarrow, England.
The company name, Filtrona, was adopted in 1979 and in 2013, it rebranded as Essentra to reflect its diversification into industrial components.
“We identified a lot of opportunities in this market and our expansion has been based on that growth strategy.”
In 2022, the filters division became an independent entity when it was sold to new owner Centaury Management. It was rebranded to Filtrona again in 2023 in honor of the company’s legacy.
“Through the recent ownership transition, we’ve had a strong strategy for business growth, which involves making new specialty filters in more geographical locations around the world,” Pye says.
“It’s also producing more sustainable materials and product lines, such as heated tobacco products, which have a very good growth span and are developing well in the market.”
And this strategy is working, with the company achieving significant success. Over the last two years alone, Pye says the company has achieved 25 percent growth.
“We’re a US$600 million business now, and we’ve also been experiencing good volume growth as well,” he says.
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But this growth isn’t just down to the products Filtrona is selling; it’s also impacted by the locations into which it’s now selling into.
“We identified a lot of opportunities in this market, and our expansion has been based on that growth strategy,” he says.
“People often hear the tobacco market is somewhat of a sunset industry, but that really hasn’t been our experience. Ours is very much in the specialty area, and if you look at that you’ll see that cigarettes are about 10 percent of the overall market.
“New growth is emerging strongly for heated tobacco products, of which we have a 50 percent specialty market share.”
A sustainable approach
Pye took on the CEO role at Filtrona two years ago, and the Australian citizen has been living and working in Asia for the past 15 years. His career journey to this point has been impressive, with experience in various leadership roles at Amcor, Avery Dennison and Essentra.
Despite the company’s success, he says manufacturing specialty filters does come with its challenges, however.
“The filter business is dynamic, but we’re affected and comply with regulations in the various parts of the world in which we operate,” he says.
“We stand by the claims of what we can deliver in the product, which is really important to us, our customers and, of course, our industry.”
“Specialty filters are quite technical to produce and precision is essential, which is why we have our own R&D facilities in China and Indonesia and also a scientific lab for tobacco, nicotine and flavor testing. All of our products are rigorously tested.
“We stand by the claims of what we can deliver in the product, which is really important to us, our customers and, of course, our industry.”
Sustainability has become an important driver for Filtrona, which is taking great strides toward achieving net zero by 2050.
“We recently released our first sustainability report and are very much committed to science-based targets,” he says. “Between 2022 and 2023, we reduced our CO2 emissions by 30 percent and received a Bronze Award from EcoVadis for our sustainability efforts.”
On leadership
When it comes to leadership, Pye says ensuring transparent communication across the board is an essential element, alongside empathy, aligning the team and suppliers with the company’s vision and encouraging calculated risk-taking.
“As a leader, it’s important to encourage strategic risk-taking to ensure people feel safe,” Pye says. “When someone has success in that, it’s to be celebrated, but even for the risks that don’t pan out, encouragement is important because it helps us get to another point or to make another decision.”
“We want to continue developing products that we think have really good growth both now and in the future.
The future looks bright for Filtrona as it continues on its strategic growth plan while at the same time adapting its operations to meet net zero targets by 2050.
“Innovation is definitely in our DNA,” Pye says. “We want to continue developing products that we think have really good growth both now and in the future. And we know we can achieve this because of our experience, capability and know-how.”
