Growth in demand for corrugated board packaging is showing signs of a slowdown. For 2009–15, volume consumption of corrugated board grew on average by 4.3% annually but this is expected to decrease to 3.6% annually in 2016–2021, according to Smithers Pira.
In Smithers Pira’s latest report The Future of Global Corrugated Packaging to 2021 it states the actual consumption of corrugated board packaging by end users totalled 128.6 million tonnes in 2015, worth over $222 billion to converters. Growth rates having dropped from 7.4% between 2009 and 2010, as the industry came out of the global recession, to just 3.6% from 2014 to 2015.
Regionally, the market has seen a distinct shift eastwards, with Asia’s market share blooming from just over 40% in 2009 to over 46% in 2015, and this is likely to continue over the medium term with the region accounting for more than half of the global market by 2021. This may be a result of the Chinese government embarking on a programme of mill closures to rid the market of out-dated, inefficient paper machines, targeting over 8 million tonnes of capacity across all paper and board products, and focussing on linerboard and fluting machines less than two metres wide and slower than 80 metres/minute.
The ongoing penetration of internet shopping into consumer behaviour is seeding a spate of innovation in the corrugated market, with companies taking on the challenge of what they term ‘frustration-free’ packaging; as well as corrugated producers designing clever ways of ensuring the safe transportation of goods via the postal service to reduce the cost of delivery by courier and enable easy returns.
Cost will remain the core motivator for changes in the corrugated packaging industry – and this will not be restricted to raw material production alone – with a new emphasis on the impact electricity prices can have on production facilities. There are also positive developments for the corrugated industry, such as a recent study of the use of rigid plastic containers (RPCs) in tomato delivery in Mexico, which shows that corrugated board can be far more cost-effective, despite the re-usability of RPCs.2015, (‘000 tonnes)
Trends within these markets clearly have relevance to corrugated board consumption. These range from the high growth in demand for electrical goods – especially consumer electronics – packed more and more in lightweight micro- and fine-flute corrugated configurations; to the slowdown in demand for paper products coupled, with a trend to lighter weight boards that will see an erosion of growth in this market sector. Growth prospects are measurable by anticipated percentage growth in demand for board, net incremental requirement for board to satisfy market needs, and changes in market share of the various applications.
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 as this has the highest base, and this segment will also see the most significant gain in market share over the forecast period.