NAFTA’s
flexible packaging converting industry is dominated by Bemis Inc. with a 20
percent share, according to PCI Films Consulting Ltd’s latest review of the
market. This position was consolidated with the purchase of Alcan Packaging
Food Americas in 2010. Bemis is now twice as large as the next biggest player,
Sealed Air Corporation, and triple the size of the number three supplier,
Printpack. Another important recent development has been the emergence of
Prolamina Corporation via acquisition and green field investment as a major new
force in the converting industry. With current annual turnover of around $300
million in North America, Prolamina has ambitions to top US$2 billion in
converted flexible packaging sales within the next few years, mostly through
acquisitions.
The
North American converted flexible packaging market is vast, accounting for
approaching 30 percent of global consumption and an annual spend of US$18.3
billion in 2010, reveals a new report from PCI Films Consulting Limited. Just
under 90 percent of sales in the region are concentrated in the US, with Canada
and Mexico accounting for 6 percent and 5 percent respectively. ‘The North
American Flexible Packaging Market to 2015’ explains the recent history, the
current situation and predicts how converted flexible packaging will grow in
the US, Canada and Mexico over the next few years.
In
value terms the North American Flexible Packaging Market grew by over 4 percent
per annum between 2005 and 2008 but with the onset of the global financial
crisis fell back by 6 - 7 percent in 2009. However, 2010 saw a strong recovery
in the value of flexible packaging sales as the supply chain re-stocked and raw
material prices were passed on through the supply chain. While the market has
been volatile in value terms over the past few years flexible packaging demand
in area / unit volume has shown continuing growth. Nevertheless, converter
margins have been squeezed, which has resulted in a significant amount of rationalization
and plant closures.
The
Region’s flexible packaging market is relatively self-contained, although
imports, particularly from India and China, have now reached nearly 2 percent
of demand and continue to grow. Exports outside the Region run at less than 1
percent of regional production mostly destined for customers in Central and
South America and Europe.
For the future, converted flexible packaging growth in North America is
forecast to average around 3.5 percent per annum reaching nearly US$22 billion
by 2015, with Mexico set to grow by 5 percent per annum. Per capita consumption
of flexible packaging in Mexico is only around a fifth of the US figure,
underlining its ‘emergent market’ status. The North American Free Trade
Agreement also continues to provide extra impetus behind growth in Mexico, with
many US packaged food companies manufacturing in Mexico to take advantage of
lower labor rates.
Commenting on the report, PCI consultant Paul Gaster says, “The resilience of flexible
packaging demand is to a great extent underpinned by the recession-resistant
nature of its end use markets, especially food, pharmaceuticals and pet food,
which between them account for approaching 85 percent of total North American
flexible packaging demand. Moreover, strong population growth in the region of
nearly 1 percent per annum has helped to maintain volume growth and will
continue to do so over the coming years.”
PCI’s report ‘The North American Flexible Packaging Market to 2015’ gives all
the detail behind the headlines, with statistics and in depth commentary on
industry trends, converter profiles and descriptions of trends in individual
end use markets in each country; providing essential reading for suppliers,
converters, buyers and investors in this huge market.
