Total demand for flexible packaging in Europe in 2012 was €13.5 billion, including both converted and unconverted materials, accounting for around one-quarter of world flexible packaging sales, says a new report by UK-based PCI Films Consulting. Of the European total, sales of value added converted materials amounted to €12.1 billion and unconverted materials €1.4 billion.
In the converted materials sector the European market grew by 2.1% overall last year, compared with nearly 5% in the previous year. In Western Europe, sales increased by 1.3% in 2012 and in Eastern Europe by 6%.
The slowdown reflects a far more benign input cost situation with lower inflationary pressures compared with 2011 when there was significant raw material cost/price volatility. It also reflects a broadly static demand situation in a number of West European countries and also real declines in southern Europe, notably Italy, Greece, Spain and Portugal, where the impact of the economic downturn has been most severe.
European production increased by 2.3% overall by value, with most of the growth being in Russia, Poland and Turkey. 54% of production is concentrated in the four leading producer countries of Germany, France, Italy and the UK. A further 10 countries account for just over one-third of production with the balance spread among other countries across Europe.
Exports to destinations outside the European region are estimated at €1.1 billion, accounting for around 8% of production. Imports from outside the region at just over €220 million accounted for around 2% of European demand.
Further consolidation of the European industry has included Mondi Packaging’s acquisition of Nordenia International with the combined business emerging as Europe’s third largest player. Also, private equity is playing an increasingly important role in the industry. Approaching 20% of the industry’s sales in Europe is generated by private equity portfolio companies.
Six end use categories: Confectionery, Fresh & Processed Meat and Poultry, Cheese & Dairy, Coffee, Dried Foods & Cereals, Baked Goods and Medical/Pharmaceuticals each had sales exceeding €1 billion in 2012, and together accounted for 60% of European flexible packaging demand.
For 2013 value growth is expected to be broadly similar to 2012 for the year as a whole. This reflects primarily continuing modest inflationary pressures and further real declines in southern Europe.
In area terms usage grew by around 1.3% in 2012 underpinned by continued growth in applications such as pet foods, pharmaceuticals and beverages as well as a number of human food sectors. Volume area growth is expected to continue at these levels over the next few years.
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