European and Global Markets for Flexible Packaging. John Durston, FPE Vice-Chairman. with kind support of Paul Gaster, PCI FILMS (

Transcription

1 European and Global Markets for Flexible Packaging John Durston, FPE Vice-Chairman with kind support of Paul Gaster, PCI FILMS (

2 World Flexible Packaging Market 2004 North America 36% Asia Pacific 26% Middle East & Africa Central & South America 8% Europe 27% World Flexible Packaging Market = $40 billion

3 World Flexible Packaging Market 2004 COUNTRY / REGION Flexible Packaging Consumption $bn. % Share Growth Rate % change Europe % N America C & S America % Asia Pacific % Africa / Middle East % TOTAL %

4 Global Flexible Packaging Market: The Leading Players Alcan 7% Bemis 5% Amcor 5% Cryovac 4% Printpack Others 76% Total Market = $40 billion

5 European Converted Flexible Packaging Market Overview 2004 Exports ( 691m) Imports ( 82m) European Production ( 9,797m) European Consumption ( 9,188m)

6 European Flexible Packaging Market 2004 COUNTRY / REGION Flexible Packaging Consumption m % Share Western Europe C & E Europe Turkey 8, % 9.5% TOTAL 9, %

7 Sub-regional Trends in European Flexible Packaging Markets 2004 West European demand mature at around +1%pa New EU entrants +4-5%pa growth Turkey +8% growth Romania / Bulgaria / Balkans 7-8%pa growth Russia and Ukraine 10%pa+

8 European Flexible Packaging Market by Country 2004 Russia Turkey Poland 2% Others 1 Germany 22% Nordic countries 4% Benelux 6% Spain 6% UK 16% Italy 9% France 16% Total Market = 9.2 billion

9 European Flexible Packaging Market: The Leading Players Others 40% Alcan 16% United Flexibles Amcor 15% Mondi Packaging Bemis Huhtamaki Wipak Clondalkin 4% Constantia 6% Sealed Air Cryovac 4% Total Market = 9.2 billion

10 Flexible Packaging Market in Western Europe 2004 Nordic countries 5% Switzerland 2% Austria 2% Greece 1% Portugal 1% Benelux 7% Ireland 1% Spain 7% Germany 25% Italy 11% UK 19% France 19% Total Market = 8,040 million

11 Flexible Packaging Market in Eastern & Central Europe 2004 Romania 5% Slovakia 5% Baltic States 4% Balkan States Bulgaria 2% Belarus & Moldova 2% Ukraine 6% Russia 3 Czech Rep. 9% Hungary 9% Total Market = 876 million Poland 22%

12 Central & East European Flexible Packaging per capita Consumption by Country Av. W. Europe Czech Republic Hungary Slovakia Poland Baltic States Russia Romania Bulgaria Ukraine Balkan States Moldova Average Per Capita Consumption (Euros)

13 Western Converters C&E European Plants Russia Poland Czech Rep. Hungary Alcan Packaging 2006 Amcor Cryovac Emsur / Coexpan Mondi Packaging Nordenia International Reuther Schur Flexible Suominen Teich

14 Drivers for Change in Eastern Europe Growing national economies, rising affluence and changing lifestyles Inward investment by Western food and non-food manufacturers and flexible packaging converters Major investments in food processing and associated transport, distribution, agricultural and other supply chain infrastructural developments Rapid expansion of West European multiple retailers in Central European markets Enlargement of the EU Increasing integration of West and Central European economies

15 The Future for Flexible Packaging in Central & Eastern Europe Flexible packaging growth in Central & Eastern Europe will be maintained by internal demand and W European food producers increasingly supplying all European markets from their East European plants Huge long term potential in Russia and Ukraine will see double digit flexible packaging growth for some time to come Longer term threat from non-european producers in supplying converted flexible packaging to Central & East European markets More Western converters will set up or acquire plants in Russia Growing import substitution as new BOPP film lines in Russia come on stream

16 The Future (cont d.) Eastward shift of manufacturing, including food processing from West to Eastern Europe to reduce costs More Western converters establishing a manufacturing presence in Central & Eastern Europe The creation of a more integrated European flexible packaging industry Intensified competition both within Europe and offshore Sales value growth will continue to lag volume growth Further flexible packaging rationalisation and consolidation A continuing shift in GROWTH OPPORTUNITIES from the more mature West European market to Central & Eastern Europe

17 European Flexible Packaging Market the next five years 1.7% average annual growth overall to reach 10 bn. in 2009 Sub-regional average annual growth Western Europe 1%pa Central & Eastern Europe 7%pa Turkey 5%pa Continued overcapacity, especially in Western Europe, despite consolidation and rationalisation Competition will intensify

18 European Demand for Flexible Packaging Materials 2004 Papers 15% PA 2% Cello 1% Alufoil 14% PE 34% BOPA 1% EVOH Coex 2% PET PVC CPP 4% BOPP 22% Total Market = 3.2 Million tonnes

19 European Substrate Supplies Feedstock costs on the increase up by 50% in some cases Rising imports of commodity BOPP, BOPET and BOPA films from Turkey and the Far East Container loads and spot deals, mainly Suppliers getting established, European sources facing tougher competition No significant European investment in the last two years Little profit so no incentive to invest low prices Massive increases in capacity in the Far East

20 European Substrate Pricing future? HIGHER PRICES? Raw material costs likely to continue to increase: Higher oil prices Consolidation in raw material supply base High energy prices Further industry consolidation in Western Europe and closures of obsolete capacity likely LOWER PRICES? Global (Far East mainly) sources of substrates becoming more cost-effective: Price offers becoming more attractive. However, raw material costs currently on par with Europe => no real cost advantage Quality levels improving New BOPET and BOPP film capacity planned for Turkey and Russia to absorb some of the export volume from West European producers => more supplies available for Western Europe

21 The Future for Flexible Packaging Converters in Western Europe More plant closures Further consolidation Focus on near to market packaging plants for perishable and seasonal foods e.g. produce, bread, yoghurt. Also higher added value products e.g. medical, pharmaceutical, industrial solutions. Accent on sophisticated technologies and innovation. Sustainable packaging solutions e.g. PLA films biodegradability, compostability. The New Wave.