Growth Forecast for Carton Makers5 September 2003
Faster and more accurate cutting machines and an environmentally friendly profile should secure a solid future for carton makers.
Current market trends for makers of cartons mirror those found in manufacturing industries worldwide. Just-in-time ordering and delivery, reduced inventory and custom manufacturing are affecting the rigid and folding carton business as much as any other sector. Equipment manufacturers are just as aware as packaging companies of the stringencies of the marketplace, and the design, development and marketing of equipment are focused on ensuring that the machinery is flexible enough.
Carton makers are turning to new cutting machines that show an increase in the flexibility and automation of their materials handling capability. Recently introduced die-cutting machinery can be expected to cut almost any material from 14mm triple wallboard to 16-point carton board and even single-faced corrugated board.
In terms of throughput, industry-leading figures of 150,000m² of cut board from a single machine are being achieved, with automatic removal of all waste board as standard. Modern machines provide highly accurate registration (cut-to-print as close as 4µ), and sophisticated operator control systems and diagnostics to ensure quality levels are maintained.
The newest machines have been developed to handle complex point-of-sale profiles, and at least one manufacturer claims that a single operator on its latest die cutter can handle six million m2 of board a year, with all waste board automatically stripped. The competitive edge provided by new-generation technology has to be obtained in a market that has been at best flat and in some segments declining. UK reports suggest that the case materials sector declined overall between 1998 and 2002 by more than 7 per cent. In 2002 alone the market declined by 3 per cent.
Carton board consumption
Carton board consumption has seen more variable demand with a similar 7 per cent fall from 1999 to 2001, but with a rise in 2002 when demand totalled 1,192,000 tonnes. The largest part of the total demand is for board for folding cartons, with graphics and display materials taking up the remainder. In the UK, as elsewhere in Europe, demand is on the increase because of consumer perceptions of cartons as environmentally friendly packaging and the background set by the EU Packaging and Packaging Waste Directive.
Interestingly, despite the EU Directive favouring wrapping paper over plastics, demand for paper wrappings has fallen dramatically. The sector declined by almost 27 per cent in the same period, with demand falling to 327,000 tonnes last year.
Commentators expect demand for case materials to see moderate annual growth of around 1 per cent a year to 2007, but they say that will depend on suppliers, manufacturers and packagers promoting the environmental benefits of board in comparison with plastics in particular.
In contrast, carton board is expected to see growing demand in the region of 4 per cent a year over the next four years, with an estimated total demand in the UK of 1,235,000 tonnes by 2007. Given similar growth forecasts in the rest of Europe, this represents a solid future for carton makers, but again much will depend on promoting the virtues of carton board as an environmentally sound packaging material.
Eastern European markets
A new market report on the CIS countries suggests that in the next four years the consumption of carton board in Russia will rise from 445,000 tonnes in 2002 to 715,000 tonnes in 2007. Carton producers are responding to rapid market growth, and four major new carton plants are currently in the planning stage and others are seeing investment in expansion as makers plan to meet rising demand, especially in cigarettes, confectionery, fruit juice, prepared foods, pharmaceuticals and cosmetics over the next two to three years.
In parallel, it is of interest to note that production of corrugating materials in Russia has more than doubled since 1998 to nearly 1.8 million tonnes. In 1997, presentation lines were almost non-existent in Russia. but in 2002 production totalled close to 250,000 tonnes. New markets are emerging and both carton makers and machinery suppliers will be looking for growth in the years to 2007.