The BRIC economies of Brazil, Russia, China and India will offer highest growth opportunities for folding cartons at almost 8 per cent annually until 2016, according to new industry research.
The report - The Future of Folding Cartons: Market Forecasts to 2016 by Pira International - forecasts that converter sales will climb by an average of 4.4 per cent between 2010 and 2016, with Asia leading growth at 6.5 per cent.
More than half of the $12m tonnes increase is expected to come from China.
Global cartonboard production has increased 2.5 per cent year-on-year since 2005, to reach 43m tonnes in 2010 to be worth in excess of US$35bn. Asia accounted for 45 per cent of total volume, followed by America on 28 per cent and 24 per cent for Europe.
The 20 largest producers by volume account for almost half the total market – with the top five (International Paper, Stora Enso, MeadWestVaco, Graphic Packaging and APP) claiming a 22 per cent market share.
Folding cartonboard conversion is more fragmented wit the top 20 players holding less than a fifth of total market share – with Graphic Packaging by far the biggest converter at 2.2m tonnes. Global consumption of 40m tonnes in 2010 – worth US$78bn – was made up of 85 per cent folding carton and 15 per cent microflute.
In folding cartons, food packaging held its market share of 55 per cent from 2008 to date - although the report predicts this will decline to 52 per cent by 2012 on gains from non-food applications.
Within food, top end use segments are baked products (4 per cent); dairy (5 per cent); ready meals (5 per cent); frozen food (6 per cent) and dry food (7 per cent).
In frozen food, folding carton growth is likely to be curbed by limited retail structure in developing nations, while growth in demand from developed countries will be eroded by the trend towards chilled products, said Pira.
Rising incomes in developing regions is stimulating growth of white goods such as refrigerators and freezers – in turn triggering greater demand for frozen food and therefore folding cartons.
Extra demand for folding cartons for frozen food will lead to an additional 500,000 tonnes of material in 2016 compared with 2010, worth over $1bn at 2010 prices, said the report.
Many of these factors apply to chilled food, said the report as it predicts annual demand growth of more than 5 per cent – with total demand climbing by more than 33 per cent from just over 500,000 tonnes in 2010 to almost 700,000 tonnes in 2016, worth almost $1.5bn at 2010 prices.
Ready meals and bakery
Demand for folding board for ready meals – which includes frozen, chilled and ambient products - will rise by 3.6 per cent over the period - to reach a total of 2.6 million tonnes in 2016 worth $5.3bn at 2010 prices.
While developing nations will see impressive annual growth – India (12 per cent) and Asia (5.5 per cent), demand in developed countries will experience “relative stagnation”.
For baked products total demand for folding cartons in 2010 reached about 1.6 million tonnes valued at $3.3bn.
Folding cartons will face “continued competition from flexible packaging in this sector, although the ‘bagless box’ may offer development opportunities,” said Pira.
Average annual growth of just 1.5 per cent is forecast between 2010-16 - with Asia growing by 2.2 per cent and the BRIC countries by 3.8 per cent.
Significant scope for growth exists for folding cartons exist in developing nations as currently Asia accounts for just 30 per cent and BRIC nations less that 16 per cent in this sector.
The Future of Folding Cartons: Market Forecasts to 2016 is available from Pira International