Survey signals dearth of upcoming packaging talent
U.S. packaging machinery shipments decreased in 2008
Growth in world flexible packaging to decline slightly
SOURCES FOR CURRENT RESIN PRICES


Survey signals dearth of upcoming packaging talent

In spite of decreases in demand and global competition, one report suggests the packaging industry may be ill-prepared for lack of future talent.

A recent survey by Heidrick & Struggles Int’l. shows that talent tops the list of concerns for executives in the North American packaging and paper industry. Only 4% of respondents strongly believe that their talent management is prepared for current challenges facing the industry.

The survey of more than 75 executives revealed that talent and costs share the top spot as primary concerns. While material costs have attracted significant coverage for their well-known drag on industry profits, the survey found that executives shared as great a concern about talent, ranging from hiring and firing practices to succession planning.

Heidrick & Struggles’ report also found a significant gap between the perceived importance of talent and the ability of companies to address it. While 73% of respondents strongly agreed on the importance of better talent management, only 4% were confident that their company’s talent can meet challenges sufficiently.

“The industry knows it can no longer afford to keep ignoring talent development, but it must be more creative about where to look for the next generation of leadership,” says Jonathan Graham, leader of Heidrick & Struggles’ Paper and Packaging Practice. “Instead of trying to compete for talent with consumer products companies, for example, the sector should be looking to find up-and-comers from areas such as the specialty chemical and other business-to-business industries-places where innovation and technology are thriving.”

U.S. packaging machinery shipments decreased in 2008

Exports in 2008 increased 8.6%, but growth was offset slightly by 2.5% decline in domestic shipments.

Total U.S.-originated shipments of packaging machinery declined 0.4%, totaling $5.885 billion in machines sold in 2008, according a recent PMMI Shipments & Outlooks Study. The annual state-of-the-industry report is based on data supplied by PMMI member companies and other industry sources.

The first decrease in seven years, domestic sales of packaging machinery slowed 2.5% to $4.680 billion, while exports expanded 8.6% to $1.2 billion. Imports to the U.S. likewise saw increases, up 1.2% to $1.7 billion.

PMMI’s study showed growth in 2008 in seven of 18 categories, including:

• Pre-made bag hanging, opening, weighing, filling and closing machinery (+7.9%)
• Filling – Dry Products (+3.8%)
• Palletizing, Depalletizing and Checkweighing Machinery (+3.3%)
• Case and Tray Forming, Packaging/Unpacking, Closing and Sealing (+2.8%)
• Inspecting, Detecting and Checkweighing (+2.6%)
• Cartoning, multi-packing and Leaflet/Coupon Placing (+1.4%)
• Conveying, Feeding, Orienting and Placing (+0.2%)

The PMMI report reflected a variety of factors that influenced the U.S. market in 2008, including: 

• Economic conditions creating a negative environment for capital projects, 
• Soaring commodity prices (ingredients, feed, oil, etc.) increased production costs, leading to reduced capital investment, 
• The demand for alcoholic and non-alcoholic beverages was lower, leading to reduced demand for related machinery, 
• Plant consolidations and closings reduced demand as they shrunk the pool of potential packaging machinery customers, 
• Manufacturing plants’ capacity utilization rates stood at roughly 68%, and 
• Financial conditions caused banks to significantly tighten lending practices.

PMMI officials recognized that 2008 was a tough year for many, but the group suggests that good news is on the horizon. The economy seems to be showing signs of stabilizing and improvement, while market trends including sustainability, the increase in private label packaging, and a considerable focus on safety are providing new opportunities growth.

Growth in world flexible packaging to decline slightly

One study indicates that the recession may reduce growth in world flexible packaging demand to 3.2% annually.

A new report from PCI Films Consulting Ltd. has concluded that the recent recession will drag on flexible packaging's growth around the globe, but current economic conditions will have only a minor influence on future markets. PCI forecasts that the $58 billion world flexible packaging market, which has grown 5.9% annually on average, will grow more slowly in value terms at a rate of 3.2% annually through 2013.

PCI's report recognizes that the world recession has had an effect on consumer flexible packaging demand in 2008 and 2009. But as food packaging remains a primary application for flexible packaging, the industry has fared better than as others. Cost-reduction efforts by major end-users; the down-gauging of substrates; the reduction in the number of flexible packaging layers used; packaging waste reduction initiatives at local and government levels; and a slowdown in consumption due to ‘healthy eating’ campaigns have contributed-and will continue to contribute-to the moderating growth.

In contrast, the report points out several global trends which will continue to drive up volumes and values of flexible packaging in use. Of these, efforts to convert rigid packaging to flexible packaging will continue as packaging companies seek to reduce costs and carbon footprints alike. Further, the on-going development of food processing and retailing industries in countries with currently light packaging use will result in increased flexible packaging use to meet the needs of consumers with higher levels of disposable income.

Overall, however, the downward pressures are expected to outweigh the positives over the next five years, hence a small slow down in the average per annum growth rate.

SOURCES FOR CURRENT RESIN PRICES
Chemical Market Associates Inc.
DeWitt & Co. Inc.
ICIS
IDES Inc.
Plastics News