Page 25 - Packaging News Magazine Sep-Oct 2019

September-October 2019
www.packagingnews.com.au INDUSTRY INSIGHT
PAPER & BOARD
25
2017-18
2018-19
% Change
68.6 kt
70.7 kt
3%
217.4 kt
195.4 kt
-10%
31.8M
35.9M
13%
FIG. 1: Consumption of Folding Boxes/Cartonboard
FIG. 2: Consumption of Fibre-Based Bags & Sacks
• High-street retail is in serious trouble, reducing B2B shipments
• Major shippers like Amazon are right- sizing their boxes, and using alternatives After more than five years of solid
growth in consumption of corrugated packaging, it is likely that 2018-19 deliv- ered a breather on the back of the slowing economy. However, the economic funda- mentals of population growth, along with strong and expanding export markets, makes it likely the sector will soon be pant- ing to keep up again.
Local production of corrugated boxes is strong – above 90 per cent over all time pe- riods. Rising pre-converted corrugated box imports are important, but still only five per cent of that market.
STRONG OUTLOOK FOR FIBRE PACKAGING
Over the last two or three years, corrugated box demand growth raced up, under the combined influences of population expan- sion, stable economic growth, good export- ing conditions, and the rise of e-commerce. The softening of each of those factors over 2018-19 is a moment in time. Demand fun- damentals remain strong.
Similarly, for the other formats of fibre packaging, the outlook is strong.
Bans on single-use plastic bags and the motor-bike based meal-delivery phenom- enon, for instance, are increasing de- mand for bags and sacks as well as the coated cartonboard from which fast food boxes are made.
As the data for bags & sacks and folding boxes shows, not all of the supply of those materials is manufactured in Australia. Imports will continue, and for products like folding boxes, the entirety of supply will come from imports.
This is different to the situation with the corrugated box sector, where local manu- facture will retain its local dominance for decades to come.
In 2019-20, IndustryEdge expects Aus- tralia will experience low single-digit de- mand growth for corrugated boxes. High single-digit demand growth is more likely for bags & sacks, with folding boxes sitting somewhere in the middle of the two. ■
Tim Woods is managing director of IndustryEdge, Australia’s leading fibre packaging market analysis and consulting firm.
IndustryEdge provides subscription data, market intelligence and related business services. www.industryedge.com.au
CONSUMPTION OF FIBRE PACKAGING
Sacks & Bags (kt) Folding Boxes (kt) # Moulded Fibre ($) *
* Data only available by value, not volume
# Includes previously misclassified imports
Source: ABS & IndustryEdge research
Source: ABS & IndustryEdge research