EPS moulded parts are in demand for a large number of packaging applications, particularly when impact resistance, weatherproof properties and insulation are all called for. Apart from a decline in 2000, the European market for EPS packaging recorded steady growth for many years, albeit at a much lower level compared with other standard thermoplastics. Production in western Europe totalled 195,000 t last year, after 199,000 t in 2002 and 201,000 t in 2001. This downward trend does not reflect a shrinking EPS market, however, but rather the steady relocation of production capacity for both packaging and insulating materials to central and eastern Europe.

Demand patterns have evolved in very different ways in Wwstern and eastern Europe over the past few years, Francesco Anfuso of Polimeri Europa (I-20124 Milano; www.polimerieuropa.com) told the 150 participants in the 7th International Expanded Polystyrene Packaging Conference held by the European Manufacturers of Expanded Polystyrene (Eumeps, B-1200 Brussels; www.eumeps.org) in Rome in June. While the west saw growth of only 1.7% in EPS packaging in 2003 compared with 2002, demand in the new EU member states rose 21.4% accelerating the sharp upward momentum already experienced in this region since 2000. Even within western Europe, however, the picture is far from uniform, as Anfuso explained.

Fish industry pushes dynamic development While the Scandinavian and southern European markets, and also The Netherlands and Ireland, continuously increased their per capita consumption of foamed PS packaging over the past few years (with Denmark and Finland topping the list at 5.6 kg/y), the market is said to have collapsed in Belgium, Germany and the UK, and to some extent in France, said Anfuso. In Germany, for instance, per capita demand for foamed PS was only 2.4 kg/y last year (against 3.1 kg/y in 1998), with Belgium recording only 1.8 kg/y (2.6 kg/y). As delegates to the Rome conference heard from several sources, EPS crates for storage and transport of fish are one of the largest applications for this type of packaging in many countries. Converters in this segment obviously operate within a very restricted territory without much opportunity to widen their customer base.

Eastern Europe has experienced a boom in EPS packaging over the past few years, although starting from a very low level in some cases. During the past ten years, Poland has grown into Europe´s second most important market, due, especially to EPS converters following their customers (in particular, manufacturers of consumer electronics and white goods). The Polimeri Europa executive pointed to especially good opportunities in the Russia/Ukraine/ Byelorussia region. Here, and elsewhere in the east, growth is often twice as high as the individual country´s economic growth.

On the whole, the European EPS market is certainly dynamic. Following 5.6% growth in 2003, players in this plastics industry segment are optimistic, even though the weak German market is providing cause for concern. Experts at the Eumeps conference were divided on whether the downslide had bottomed out or had only just begun. While the German packaging market collapsed at the start of the 1990s with the introduction of the country´s packaging ordinance and recovery took several years, EPS players now see the decline in demand for insulating material, brought about by the low level of building activity, as a stumbling block.

Electronics industry´s move east causes headachesIn Rome, Gerd Voss of Storopack (D-72555 Metzingen; www.storopack.com) made it clear that survival of the mainly small and medium-sized EPS processors is threatened by the relocation of electronic equipment and household appliance manufacturers to eastern Europe. Confronted with the move east of production facilities and distribution centres at big companies like Merloni (www.merloni.com), Philips (www.philips.com) and IBM (www.ibm.de), foam packaging suppliers have only two options. Either they follow the big customers who need shipping crates for their electrical and electronic appliances or they reorient themselves towards their own domestic markets.

According to Voss, relocation is feasible only for a number of large companies, as packaging is a sector which traditionally has been locally oriented. In any case, he said, companies considering a move eastward should first conduct extensive market analyses, whereby the decisive criteria must be existing and potential customers, competition in the new market, the economic and political situation and the labour market. Storopack itself has successfully made the move over the border several times. Using the company´s Czech site as an example, Voss said the key issues included local management and employees, transfer of support and know-how from Germany, flexible production and consistent quality standards worldwide.

Remaining a local player is still the more viable alternative for many EPS processors at present, Voss believes. However, he said they will have to figure out how to secure for themselves a bigger slice of the shrinking pie. Potential opportunities for manufacturers of EPS moulded parts could lie in local applications involving new products for niche sectors and offering key competitive advantages. Whether bicycle helmets, plant boxes or fish crates – it is innovations that are essentially required, he remarked.

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