Europe's Corrugated Industry Expected to Soar

According to a report published by Pira International, Europe's corrugated board industry could add 4.25 billion m2 of capacity between the end of 1997 and the year 2001 and another 9 billion m2 in the following five years, creating a corrugated market of 46 billion m2 by 2006. A company with 10% share of this would be nearly twice the size of the current market leader and a mid-range player as big as today's leaders.

Nearly 60% of the new capacity will be in central and eastern Europe, favoring larger companies that can afford green field investment. The expansion is likely to be stepped up and aided by the EU's TENS (transnational networks) policy.

The market is currently very active. Of five leading players--SCA, Jefferson Smurfit, International Paper, AssiDoman and KNP BT--AssiDoman almost doubled its capacity by acquisition in 1997, while KNP BT Packaging, a powerful force in Germany, has recently been sold. Continuing growth is likely in the size of some groups and the disappearance or merging of other names further down the list, but the market is moving rapidly and there will be plenty of room for more small players.

The old image of a business producing mundane "brown boxes" is out of date. Driven by the proliferation in packaged products and its hypercompetitive multinational clients which are pursuing the new credo of efficient consumer response (ECR), the sector has been upgrading the quality of its raw materials and end-products and speeding up its design, manufacturing and delivery processes. Reduced weight paper and finer fluted corrugated boards with high-quality printing is enabling corrugated to make significant inroads in primary consumer packaging as a better performance material than cartonboard. CAD/CAM and faster machinery are helping firms to speed up their turnaround of large numbers of smaller orders.

There is a growing volume of shipments of corrugated board sheets by large plants to the smaller specialist sheet converters, as well as growth in small runs of highly finished, bespoke flexo die-cut packaging. Greenfield state-of-the-art, combined corrugating/converting plants are being built not only in the five major European markets (Germany, United Kingdom, France, Italy and Spain) but in most other countries, particularly emerging markets such as Poland, Hungary, Turkey, Latvia, Estonia and Russia, where the EU market leaders are highly active.

This report by Pira International gives a thorough evaluation of the processes and products and looks at 36 European countries and 19 of the leading company groups in the sector.