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Packaging Industry Outlook in BRIC Countries

Packaging Industry Outlook in BRIC Countries

14-Feb-12
China is the second-largest packaging market in the world. Fueled by the rapid growth in domestic consumption and consistent growth in GDP, the Chinese packaging industry has grown steadily and achieved rapid growth in its key categories, as per Reportlinker.com. China has replaced Japan in terms of market size and is expected to surpass the US by 2020. The Chinese packaging industry�s key end-user markets, including pharmaceuticals, retail and food and beverages, are poised for impressive growth in the forecast period.
India was the sixth-largest packaging market in the world, with sales of US$24.6 bln in 2011. India is one of the fastest-growing packaging markets in the world and is expected to grow to the world�s fourth-largest packaging market by 2016 with revenues of US$43.7 bln in 2016. Food safety laws in India are still in their development stage, and will require further amendment to meet the rapidly-changing needs of the packaging industry. Flexible plastic packaging was the fastest-growing packaging category in India, achieving a CAGR of 16.6% during the review period. During the review period, the packaging industry benefitted from strong growth in the Indian retail market. Other end-user markets from packaging, including pharmaceutical and processed food, have been growing rapidly, both domestically and internationally. This demand from end-user markets is expected to remain high during the forecast period. India�s retail growth and increased consumption of consumer products is driving the demand for packaging in the country. The Indian food processing market is one of the largest in the world in terms of production, consumption and growth prospects. India�s per capita annual packaging expenditure was US$20 in 2011, which is significantly lower than the top 20 market average of US$347.6. The low per capita expenditure offers a huge business opportunity for packaging companies. Despite the Indian packaging industry undergoing some consolidation, it is still fragmented, especially following the introduction of new companies in the country

Brazil�s packaging industry is the seventh-largest in the world. Packaging industry growth will be driven by Brazil�s strong economic growth, appreciating currency, rising per capita disposable income and increasing life expectancy and key global events such as the 2014 FIFA World Cup and the 2016 Olympic Games. The Russian packaging industry is the tenth-largest packaging market in the world and will be driven by the country�s rising per capita disposable incomes and rapid urbanization. It was valued at US$17.4 bln in 2011, an increase of 7% over the previous year. Rigid plastic was the fastest-growing category, with a CAGR of 7.48% over the review period. The main reasons for this rapid growth were the substantial investments into the industry from both domestic and foreign packaging manufacturers and the country�s huge domestic raw material reserves. The key end users which generated demand for the Russian packaging industry during the review period were the food, alcoholic and non-alcoholic beverages, personal care and pharmaceutical markets. Russian paper and board packaging exports accounted for 40% of the total domestic production in 2010. The industry is now focusing on developing new capabilities to meet the export demand for specialty papers. There are currently no waste management laws in place to govern the Russian packaging industry. As such, the adherence to new waste management laws and subsequent establishment of systems to minimize packaging waste will provide new challenges for packaging manufacturers over the forecast period. The development of nanotechnology packaging for new, hi-tech, high-value drugs will fuel the growth of pharmaceutical packaging, as pharmaceutical companies will adopt advanced packaging technology to reduce the impact of counterfeit products. During the forecast period, several large international packaging machinery manufacturers are expected to enter Russia to take advantage of the improved returns on investment, increased sales and favorable taxation conditions gained from domestic operations.

In the global plastic packaging industry, the CAGR was roughly 7.2% between 2001 and 2010, featuring the fastest growth in packaging industry breakdown, as per Researchandmarkets. For China, the market scale of plastic packaging industry approximated US$66.4 bln in 2011, accounting for 31.2% of the total worldwide. Currently, the growth in the output of plastic packaging is in proportion to the growth of demand, with the overall industry presenting a balanced supply-demand situation. Operating features of China plastic packaging industry
• Low Industrial Concentration: The top five businesses in plastic flexible packaging industry accounted for 19.4% market share in 2010. In particular, Huangshan Novel Co., Ltd. was the champion, with the market share making up 7.2%. And the top five businesses in cosmetic plastic packaging industry stood at 26% market share. In particular, Shenzhen Beautystar Company Limited occupied a lion's share of 8.6%.
• Pharmaceutical packaging expected to become new contributor for the growth of plastic Packaging industry: in terms of downstream sectors, plastic packaging witnesses the widest application in consumer goods industries like foods & drinks, daily chemical articles and pharmaceutical industries. In 2010, the application of plastic packaging in downstream foodstuff industry, daily chemical articles, pharmaceutical industry and others made up around 70%, 13%, 9%, and 8%, respectively. In developed countries, pharmaceutical packaging occupies 30% of the value of the medicines, while the figure in China is less than 10%. Hence, China pharmaceutical packaging industry is expected to see skyrocketing development in upcoming years.
• Plastic wire, rope & knitting seeing rapid growth in output: Among all the plastic packaging materials, the output of plastic film is the highest, while the output of plastic wire, rope and woven products among the subdivided products has seen the fastest growth. For example, the average output growth of plastic wire, rope and woven products in 2005-2010 reached 24.8%, compared with 13.1% and 13.5% for plastic film and plastic packaging container respectively. It is noteworthy that plastic packaging downstream consumer goods enterprises are very optimistic about the long-and medium-term development of China's consumer goods market and have increased their investment in China. For instance, Unilever lavished over RMB12 billion to set up a base in Hefei; PepsiCo is set to invest additional US$2.5 bln in China and to set up 10-12 new plants. Overall, the continuous expansion of downstream consumer goods enterprises is bound to further fuel the demand for plastic packaging.

 
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