Trends in Global Markets for Corrugated Packaging€¦ · Corrugated’s share of packaging should...

PSSMA…Multiwall, The Natural Packaging Choice 1

Trends in Global Markets for Corrugated Packaging

FPPA 16th Annual Convention

March 4, 2013

Dick Storat, President, PSSMA& President, RSA, Inc.

PSSMA…Multiwall, The Natural Packaging Choice

Paper Shipping Sack Manufacturers’ Association (PSSMA)

National trade association of multiwall sack and bag producers.

Members represent over 90% of US production Industry sales of $1.2 BillionComprehensive statistical programStrong Associate & International Member ProgramVisit www.pssma.org

2

PSSMA…Multiwall, The Natural Packaging Choice

Richard Storat & Associates, Inc.Economic consulting services for the paper packaging

and allied industries• Focus on industry level analysis of

– Containerboard and corrugated– Kraft paper and multiwall sacks

• Support Trade Associations in statistical programs and analysis

Publish Scoring BoxesTM, a monthly analysis of containerboard markets

• Timely delivery of key industry statistics• Extensive graphs highlight current industry trends• Quick-read incisive analysis of market conditions• Tools to make informed decisions

3

PSSMA…Multiwall, The Natural Packaging Choice

Scoring BoxesTM

4

PSSMA…Multiwall, The Natural Packaging Choice

Agenda

Global Corrugated Market Profile and Growth Projections

US Corrugated Market Trends

PSSMA…Multiwall, The Natural Packaging Choice

PSSMA…Multiwall, The Natural Packaging ChoiceSource: ICCA

9% of World Total or 18 billion square meters

PSSMA…Multiwall, The Natural Packaging Choice

Top 15 Country Ranking by Corrugated Output 2010

2 2 2 2 2 2 3 3 3 3 3

5 7

19 24

- 5 10 15 20 25 30

CanadaPoland

ThailandUK

IndonesiaSpain

South KoreaBrazil

FranceIndiaItaly

GermanyJapan

USAChina

% Share

Top 1 = 25% of Global ProductionTop 3 = 50% of Global ProductionTop 15 = 80% of Global Production

Source: ICCA

PSSMA…Multiwall, The Natural Packaging Choice

Factors Affecting Global Corrugated Demand

Economic Growth Industrial ProductionPopulation GrowthPer Capita Income and GrowthPer Capita Corrugated ConsumptionCorrugated Construction (Basis Weight)

9

PSSMA…Multiwall, The Natural Packaging Choice 10

PSSMA…Multiwall, The Natural Packaging Choice 11Source: RSA, Inc.

PSSMA…Multiwall, The Natural Packaging Choice

Industrial Production vs. Corrugated Production(2005-2010)

-100

102030405060708090

NorthAmerica

Europe PacificRim

China Rest ofAsia

C & SAmerica

World

Perc

ent

Ind. Prod.Corr'd Prod.

Source: ICCA

PSSMA…Multiwall, The Natural Packaging Choice 13Source: RSA, Inc.

PSSMA…Multiwall, The Natural Packaging ChoiceSource: RSA, Inc.

PSSMA…Multiwall, The Natural Packaging Choice

Source: World Bank, RSA, Inc.

PSSMA…Multiwall, The Natural Packaging ChoiceSource: World Bank, RSA, Inc.

PSSMA…Multiwall, The Natural Packaging ChoiceSource: RSA, Inc.

PSSMA…Multiwall, The Natural Packaging ChoiceSource: ICCA, RSA Inc.

Africa = 2)

PSSMA…Multiwall, The Natural Packaging Choice 19

Source: ICCA

*(21%)

*(5%)

*(6%)

*(9%)

*(25%)

*(10%)

*(24%)

*2011 shares

PSSMA…Multiwall, The Natural Packaging Choice 20Source: ICCA

PSSMA…Multiwall, The Natural Packaging ChoiceSource: ICCA

PSSMA…Multiwall, The Natural Packaging ChoiceSource: ICCA

Source: ICCA

PSSMA…Multiwall, The Natural Packaging Choice 23Source: ICCA

PSSMA…Multiwall, The Natural Packaging Choice 24Source: ICCA

PSSMA…Multiwall, The Natural Packaging Choice 25Source: ICCA

PSSMA…Multiwall, The Natural Packaging Choice 26Source: ICCA

PSSMA…Multiwall, The Natural Packaging Choice

Global Corrugated Trends Summary

Per capita corrugated output will grow by 30-35% in Asia, but marginally elsewhere

Better packaging productivity and environmental awareness will drive more packaging reduction

Corrugated’s share of packaging should not change significantly Global corrugated demand will grow at an average annual rate of 3-

4%, compared to 2.8% average growth over the past 5 years. China holds a 25% share of global corrugated output and will

contribute half of global corrugated growth. Retail Ready Packaging will grow share of corrugated packaging Microflute continues to offer above average growth potential Decorative print will grow faster than the overall rate of corrugatedSource: RSA, Inc., ICCA

27

PSSMA…Multiwall, The Natural Packaging Choice

Factors Affecting US Corrugated Markets

Economic ActivityConsumption of Nondurable GoodsManufacturing ActivityContainerboard Consumption Inventory Changes

28

PSSMA…Multiwall, The Natural Packaging Choice 29

PSSMA…Multiwall, The Natural Packaging Choice 30Source: BEA

PSSMA…Multiwall, The Natural Packaging Choice 31Source: BEA

PSSMA…Multiwall, The Natural Packaging Choice 32

PSSMA…Multiwall, The Natural Packaging Choice 33

PSSMA…Multiwall, The Natural Packaging Choice 34Source: US Federal Reserve

PSSMA…Multiwall, The Natural Packaging Choice 35

PSSMA…Multiwall, The Natural Packaging Choice 36

PSSMA…Multiwall, The Natural Packaging Choice 37

PSSMA…Multiwall, The Natural Packaging Choice 38

PSSMA…Multiwall, The Natural Packaging Choice 39

PSSMA…Multiwall, The Natural Packaging Choice

Unmade: 89

Containerboard Flows – January 2013(000 Tons)

Capacity: 3,067

Production: 2,979@97.1% Op. Rate

Consumption:2,533

Corrugators

Made for Export: 365

Other Sources(Imputed): 66

Mills

2013 Richard Storat & Associates, Inc.

Liner: 2,122Medium: 857

Made ExportedJan Dec

Liner 323 371Medium 43 49

PSSMA…Multiwall, The Natural Packaging Choice 41

PSSMA…Multiwall, The Natural Packaging Choice 42

PSSMA…Multiwall, The Natural Packaging Choice

+

Monthly Change in Containerboard FlowsDecember 2012 January 2013

(000 Short Tons)

37581

= ++Change inUS Mill

Shipments

Change inExports

Change inImputed

Other Uses

Change inBox Plant

Domestic Receipts1

1 Box Plant Domestic Receipts = Corrugator Consumption + Inventory Accumulation - Imports

= +158 385

Source: RSA, Inc.

PSSMA…Multiwall, The Natural Packaging Choice

THANK YOU

Thank you for the opportunity to participate!What are your questions and feedback?

44

Dick StoratDick.Storat@pssma.org

847-867-1521www.pssma.org