Europe’s demand for flexible packaging in €13 bln estimated at 25% of world flexible packaging sale

Total demand for flexible packaging in Europe in 2011 was €13 billion, including both converted and unconverted materials, accounting for around one-quarter of world flexible packaging sales, as per PCI Films Consulting. Of the European total, sales of value added converted materials amounted to €11.6 billion and unconverted materials €1.4 billion. In the converted materials sector the European market grew strongly in value terms in 2011, with sales increasing by 5.1% overall – Western Europe 4.8%, Eastern Europe 7%. Most of the value increase resulted from higher raw material costs, including substrates, inks, and adhesives as well as energy costs, which were reflected in higher selling out prices. European production increased by 5.4% overall, 55% of which 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 smaller markets in Western and Eastern Europe. Exports to destinations outside the European region are estimated at €980 million, accounting for around 8% of production. Imports from outside the region at €200 million accounted for around 2% of European demand. Amcor’s acquisition of Alcan’s European flexible packaging business in 2010 has seen the enlarged company now account for approaching a quarter of all flexible packaging sales in Europe. Further consolidation of the European industry continues apace. Mondi Packaging’s recently agreed acquisition of Nordenia International will see the combined business emerging as Europe’s third largest player. Also, converter groups acquired by private equity firm Sun Capital now account for around 3% European market share. Six end use categories: Confectionery, Fresh & Processed Meat, Cheese & Dairy, Coffee, Dried Foods & Cereals, Baked Goods and Medical/Pharmaceuticals each had sales exceeding €1 billion in 2011, and together accounted for 60% of European flexible packaging demand. For 2012 value growth is expected to moderate to around 4% for the year as a whole. This reflects primarily lower raw material price increases overall and real declines in Spain, Portugal and Greece. In area terms usage grew by around 2.0% in 2011 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 year.