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News March 27, 2012

China's packaging presence growing

Report says the country aims to be the world's top packaging producer by the end of this year.

President Obama's late-March trip to the Far East put China in the media spotlight as a potential partner in pressuring North Korea on matters of international security. But for those of us in the packaging community, China was, is, and will continue to be a major factor.

Case in point: "China is aiming to become the world's largest packaging producer by the end of 2012, according to research by financial advisory firm Catalyst Corporate Finance," said a Sept. 11, 2011 Packaging News article.

Catalyst Corporate Finance, an international corporate finance advisor, issued an Autumn 2011 report, "Paper and Packaging Sector; M&A update." In that downloadable report, Catalyst noted, "Chinese producers have made plans to increase their capacity aggressively in the next three years. Their stated aim is to become the world's largest packaging producers by the end of 2012, which will further intensify competition and will alter the global market dynamic."
In the executive summary of its April 2011 report, "Packaging Industry in China," Euromonitor Intl. said, "Regulations point to a greater focus on environmental concerns. Relentless reform within packaging continues unabated, suggesting that packagers will need to ensure that packaging is reusable, recyclable, or compostable, or risk being excluded from opportunities in packaging in China. The Chinese government considers the packaging industry a periphery industry; indeed, most telling is the requirement that packaging costs should not exceed 12 percent of the product sales price, or exceed three layers. It is expected that the burden will lie in the hands of the packagers to ensure that packaging meets the requirements of the Packaging Recycling Master Plan."

Other highlights from Euromonitor's summary included the following:
- An increasing use of flexible packaging for foods, beverages, beauty, and personal care products
- "Sweet spot" pack sizes for on-the-go, and single-serve offerings are expected to be highly successfyl
- The rapid conversion of unpackaged products to packaged foods, beverages, and tobacco will "fuel growth across packaging formats to the benefit of international and domestic packagers alike."

More information on Chinese manufacturing and packaging markets is available at MarketResearch.com (http://www.marketresearch.com/Freedonia-Focus-v3334/Freedonia-Focus-Phar...)

The U.S. Census Bureau reported that in January 2012, there was a $26,022.6 (in millions of US$) negative balance in U.S. trade of goods with China.

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