|
|
 |
|
Viewing report
|
|
|
|
Packaging (Paper and Board) Market Report 2002
Key Note Publications Ltd, Oct 2002
Towards the end of 2002, the UK paper and board packaging industry was in recession, with the real possibility that it would remain there until mid-2003. In 2001, consumption of paper and board packaging fell by around 2.3%, to 4.3 million tonnes.
Although paper and board packaging remains one of the largest packaging sectors, and a significant employer, it is being adversely affected by the relative strength of the pound compared with the euro. The high-cost UK manufacturing industry has also been hit by waste packaging regulations, such as the EU Packaging and Packaging Waste Directive and the UK Climate Change Levy (CCL). This has led to a wave of consolidation in the industry and, as a result, a number of foreign players now own UK manufacturing capacity.
Nevertheless, there is a positive side to the downsizing of the UK industry. Paper and board remains the favourite packaging material and is valued as a popular medium in the fast-growing print-for-packaging sector. Despite competition from plastic, corrugated packaging is beginning to play to its strengths for dual-purpose transit packs, i.e. as a means of protecting goods in transit and for open display at the point of sale.
Supply-chain efficiencies are being developed, which is helping to cut the industry's costs, and a recycling infrastructure is well established. The industry has also shown - through the PapiNet and other initiatives - that it is willing to embrace the Internet and e-logistics.
That said, the UK paper and board packaging market will continue to be at the mercy of increased raw material costs and, as long as the industry's manufacturers are competitively disadvantaged in terms of the sterling/euro exchange rate, more producers will fall by the wayside in the period to 2006. However, it is possible that by 2006, a UK referendum on joining the euro currency would have propelled the UK into the 'eurozone', thereby negating some of the exchange rate advantages currently enjoyed by continental European producers. It is also expected that UK paper and board packaging manufacturers will continue to play an important role in satisfying demand in the UK - the third-largest paper and board manufacturing market in Europe.
A large amount of UK paper and board manufacturing capacity has now been brought under the control of foreign companies and these are likely to continue to play a role in satisfying UK domestic demand.
UK demand for paper and board packaging is forecast to increase between 2002 and 2006. Consumption is expected to rise only marginally in 2002, with growth picking up in 2003 and remaining modest thereafter.
|
|
|
|
