FLEXIBLE PACKAGING
Modest growth for European market expected up to 2023 / German and Polish markets struggling / Wood Mackenzie report
Europe’s flexible packaging market expanded by 2% in 2018 to EUR 14.5 bn, with shrinking consumption of sugar and chocolate confectionery, cigarettes and tobacco in Western Europe offset by continued growth in Eastern Europe, according to a new report from data and analytics company Wood Mackenzie (Edinburgh / UK; www.woodmac.com). There were growth slowdowns in both Germany and Poland but higher growth in countries including Italy, Russia and Ukraine. Sales in Europe, comprising 28 countries across Western and Eastern Europe – including Russia and Turkey, accounted for 16% of global sales in 2018.

Average growth in the region is forecast to remain at 2% per year over the next five years, reaching more than EUR 16 bn in 2023. While the German and Polish markets are struggling, the outlook for Eastern Europe is positive. Paul Gaster, principal analyst at Wood Mackenzie Chemicals, says, “There are still a significant number of smaller markets, largely in Eastern Europe, showing dynamism in the region. The European region as a whole exports nearly 10% of total production to non-European destinations.”
Slowdown of German and Polish flexibles
Growth in Germany, Europe’s largest market for flexible packaging, slowed from 2% to 1.6% in 2018, mainly as a result of slight declines in the confectionary and struggling dairy sector. “Poland, for many years one of the strongest markets in Europe, has seen its growth rate drop from over 5% to 3.5% – although this is still above the regional average,” Wood Mackenzie says in its “Flexible packaging Europe supply demand report”.

In Russia, Wood Mackenzie says the flexible packaging industry is seeking to meet demand with domestic production rather than imports – supporting stronger growth last year. Recovery in the Italian and Ukrainian markets, growing at 3% and 4% respectively in 2018, illustrates a resurgence in both countries after several years of economic downturn.

As well as being hit by difficulties in some major end-use markets, such as confectionery and dairy, the flexible packaging sector has also been constrained by downward price pressures across the supply chain. “This is primarily due to challenging commitments aimed at phasing out non-recyclable packaging materials in favour of sustainable, but more expensive, alternatives by 2025,” says the report.
Plenty of M&A activity
The recent acquisition by Amcor (Hawthorn / Australia; www.amcor.com) of US-based film and packaging group Bemis – see Plasteurope.com of 13.02.2019 – is likely to have little impact on Europe’s top converter scene, notes Wood Mackenzie. This is because Bemis has a relatively small European footprint, plus a condition of European Commission approval of the deal was that Amcor divest Bemis’ European healthcare packaging plants – see Plasteurope.com of 13.08.2019.

However, Austrian packaging supplier Schur Flexibles (Wiener Neudorf; www.schurflexibles.com) has significantly strengthened its position in Europe with the acquisition of Sweden’s Scandiflex Pac, France’s Uni Packaging and a number of Clondalkin (Utrecht / The Netherlands; www.clondalkingroup.com) businesses – see Plasteurope.com of 02.04.2019.
13.08.2019 Plasteurope.com [243011-0]
Published on 13.08.2019

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Date of print: 11.11.2019 21:31:25   (Ref: 174123419)
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