Flexible Packaging Outlook

Global Demand 2013

World flexible packaging markets have been growing at different rates with the mature regional markets of Western Europe, North America and Japan experiencing a slowdown in growth while Asian flexible packaging markets have grown significantly  average of 4.6% per annum reach US$58,3 billion (or 18,1 million tons by 2011 with growth in the Asia Pacific region accounting for more than 50% of world growth in demand over the forecast period. And will reach $71.3 billion by 2016 (or 22.5 million tons).

Alcan, Bemis, Amcor and Sealed Air Cryovac now control 23% of global flexible packaging sales.

Barrier flexible packaging will continue to grow in importance as the major retail chains demand greater product protection and longer shelf life. Smithers Pira expects higher-barrier plastics such as BOPET, EVOH and PA, to show the highest growth rates over the forecast period.

According to Adam Page, Head of Reports and Consultancy at Smithers Pira: “Brand owners value flexible packaging for its versatility, comparative low cost and potential for innovation. It is also a lighter-weight pack format, a key attribute given the growing importance being attached to carbon footprint analysis and the environmental impact of packaging.”

Food accounts for almost three-quarters of global consumer flexible packaging markets and consumption in 2011. Meat, fish and poultry is the largest food sector for flexible forecasts.

Emerging markets to reach $21 billion in 2016

Total demand for flexible packaging in the world’s emerging markets is valued at US$14 billion in 2011, representing around 20% of the global total of around of around US$70.6 billion, says a new report by PCI Films Consulting. Increasing use of flexible packaging and subsequent investment in converting capacity in many markets will expand the size of the emerging markets by at least 50% by 2016.

Over the last five years, average flexible-packaging growth has been 11% in the emerging markets; twice that of the world average. India accounts for around 27% of total emerging market flexible-packaging production, although Indonesia, Brazil, and Russia are also significant production centers.

While concentrating on supplying the flexible packaging needs of a growing domestic food-processing industries amid rapidly growing economies and increasing levels of disposable income, exports from many emerging markets are also rising. Although imports are expected to continue to increase in value over the coming five years, the proportion of domestic consumption they fulfill has, and will continue to, decrease.

Asia Market

Asia is the largest regional market with 29.1% of global market volume in 2011, followed by western Europe and North America. Asia is also the fastest-growing market for consumer flexible packaging, with a forecast CAGR for 2011-16 of 7.9%. The region is forecast to represent 55.0% of total world flexible packaging consumption growth during the period 2011-16. India and China are the fastest-growing national markets for consumer flexible packaging according to Smithers Pira, together accounting for 44.0% of world flexible packaging consumption growth during the forecast period.

The Indonesian Packaging Industry

The Indonesian packaging industry annual growth 4.4% during 2007-2011  and valued US$7.5 billion in 2011. The food and beverage end-user market accounted for 67% of the total Indonesian packaging industry value in 2011, making it the largest end user of packaging in Indonesia. While Jakarta has a large demand for Indonesian food products, the country’s main food processing activity is concentrated around Java. The Indonesian packaging industry is expected to grow annually 5.1% during  2012-2016  to reach a value of US$9.6 billion in 2016.

In 2010 Indonesian paper and board packaging valued US$1.85 billion, and accounted for 25% of the total Indonesian packaging industry while Rigid plastic is currently the largest packaging category in the country, with a value of US$1.88 billion in 2011.