Flexible packaging will return to growth in 2011

According to PCI’s report ‘The European Flexible Packaging Market 2009’, demand will begin to pick up again in 2011 after the recession led to a decline of 4-5% this year. PCI expects European demand for flexible packaging will stabilise in 2010 before returning to growth rates of up to 2% the following year.

“The flexible packaging industry has shown steady long term historic growth with its prospects only recently being significantly affected by the global recession,” says study author Paul Gaster.

However, the industry is currently suffering from the economic recession as a decline in raw material prices has led to lower converted flexible packaging prices to customers, says the report. Order sizes are also smaller as companies try to avoid buying excess film. Other fallout from the recession includes higher levels of debt and customer reliance on consignment stocks.

The report also warns that while the market is set to improve in 2011 the European region will see a growing volume of materials being imported from outside the region, which is likely to become a threat over the next few years.

In 2008, the European flexible packaging market grew 1.7% from 2007 levels to reach a value of just over €11.7bn, accounting for around 30% of the world’s flexible packaging sales. Exports of converted materials fell to €909m as the Euro increased in value, while imports rose to €200m – 2% of the market.

Most flexible packaging was used for food products, with packaging for confectionery, meat, cheese, dairy products and based goods accounting for 40% of total sales.

European Plastics News is holding a new one-day conference examining the latest developments in the flexible packaging sector - Flexible Packaging Innovations 2009 - in Brussels, Belgium, on the 2 December.