Corrugated board packaging market to hit $269bn in 2021

Richard Stuart-Turner
Tuesday, November 29, 2016

One of the print industry’s fastest growing sectors is set to experience slower growth over the next five years but is nevertheless expected to be worth more than $269bn (£216bn) by 2021.

For 2009 to 2015, volume consumption of corrugated board grew on average by 4.3% annually but this is expected to decrease to 3.6% annually in 2016 to 2021, according to Smithers Pira, which said the sector will suffer from a combination of factors in the next five years.

The organisation’s latest report, The Future of Global Corrugated Packaging to 2021, states the actual consumption of corrugated board packaging by end-users totalled 128.6m tonnes in 2015, worth more than $222bn to converters. In 2021, consumption will stand at 180m tonnes.

The study said growth rates dropped from 7.4% between 2009 and 2010, as the industry came out of the global recession, to 3.6% from 2014 to 2015.

Regionally, the sector has reportedly seen a distinct shift eastward, with Asia’s market share growing from just over 40% in 2009 to over 46% in 2015. Smithers Pira said this is likely to continue over the medium term with the region accounting for more than half of the global market by 2021.

This regional growth was attributed to the Chinese government embarking on a programme of mill closures to rid the market of outdated and inefficient paper machines and instead focusing on linerboard and fluting machines less than two metres wide and slower than 80m/min.

“Volume growth is still positive but there is some slowing down due to reduced consumption growth in important Asian markets and probably some reduction in overall world trade growth as some markets – like North America – become more protective,” said Smithers Pira packaging consultant Dominic Cakebread.

“The rapid growth between 2009 and 2015 was basically driven by the expansion of food, beverage and consumer goods and per capita consumption in some Asian markets; China, India, and South East Asia, growth in world trade and internet sales growth.”

He added: “Asia – especially China – is the world’s largest producer of consumer goods, many of which are exported to countries around the world in corrugated cases. This accounts for the region’s large market share. Of this, China has risen from a 22% share of global volume in 2009 to 29% in 2015 and will be 36% in 2021.

“By contrast, Western Europe’s share of the world market was 14.8% in 2015, down from 16.5% in 2009. The UK’s consumption was 1.8m tonnes in 2015 – the sixteenth largest national market worldwide – and worth just over £2bn.”

The report also said the ongoing growth of internet shopping is leading to a spate of innovation in the corrugated market, with companies taking on the challenge of what Smithers Pira calls ‘frustration-free’ packaging.

“The continued growth of internet shopping is very important. Firstly because of the continued and relative strong growth rate in internet sales vs traditional retail, which is driven by sustained expansion in global internet access by a widening variety of smart devices,” said Cakebread.

“Secondly because internet sales tend to be item specific – i.e. one individual corrugated box per primary pack/customer and not one large corrugated box for several primary packs/customers as in traditional retail channels. This results in an exponential increase in corrugated boxes, especially when measured in individual units rather than weight.”

Cost will remain the core motivator for changes in the corrugated packaging industry, the report said, and this is expected to be related to both raw material production and a new emphasis on the impact electricity prices can have on production facilities.

The highest percentage growth in demand for corrugated board between 2016 and 2021 is expected to occur in the electrical goods industry, while the largest net incremental demand will be in the processed food market, with this market also expected to see the most significant gain in market share over the forecast period.

“Corrugated is clearly found in ubiquitous use across a wide range of end-uses and sectors, so it is the expansion in production in those end markets that will dictate corrugated demand increases,” said Cakebread.

“In the consumer sphere this means, for example, more rapid expansion in stronger growth areas such as consumer electronics and less growth in areas where there is more competition from alternative formats, like returnable plastic containers.”

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