MARKET TRENDS AND DEVELOPMENTS IN PACKAGING, EMAP, BRUSSELS 2001

Françoise Pardos, Pardos Marketing, February 2006

The supply chain, mergers and acquisitions

In spite of the many huge mergers that happened in the last four years, the packaging industry is not yet very concentrated, but this is fast changing, as the mergers continue. The supply of plastics packaging is still very fragmented, with 250 important groups in Europe and 300 groups in the US.

The fifteen largest packaging producers amount to only 30 %, or less, of the world packaging market, and they consider to be increasingly squeezed between the huge material producers, their suppliers,  and their direct customers, food industries and distribution, also getting bigger and bigger. Another worrying trend for plastics packaging converters is the growing interest taken by the raw material producers for the final users of their products, trying to negotiate directly with the food industry, and/or to integrate downstream. This is a major trend in the metallizing industry, for instance. 

The still large number of packaging suppliers is due to history, and to the very country-oriented food demand until recently, that justified local packaging suppliers. The picture is entirely changed with the new food products, the internationalization of the large distribution chains of supermarkets, and globalization in general.

For instance, the flexible film converters, by laminating, co-extruding, coating, printing, pouch making, were more than 1 000 in 1980, in Western Europe, down to 200 in 1990, and the large groups are merging again, like the last two year mergers of such large suppliers as VAW Europack, Lawson Mardon Alusuisse, Péchiney/Soplaril, Constantia, Danisco/Sidlaw, then Huhtamaki/Van Leer.

Moreover, these large groups are world oriented now, as non Europeans are also entering, such as Toray, Nichimen, Amcor. In 2001, Amcor Flexible Europe was created, with Amcor, Danisco Flexible (with Sidlaw and Akerlund & Rausing), now number one in flexible packaging in Europe, ahead of Alcan, Viag VAW, etc.

The same merger & acquisition fever happened in rigid packaging, in PET preforms, RPC, Alpla, Nampack/Plysu, Schmalbach Lubeca, Tetra Pak/Graham, and just acquiring Sidel,

This is also true in non plastics packaging, like the recent rumor about the merging of StoraEnso that took over Consolidated Papers and may be purchased by International Paper, this will be number one and number two together. There has been active restructuring in the corrugated cardboard industry, in Europe. The three largest players are the result of M &A over the years, Smurfit/Stone, SCA, and Kappa packaging.

The same concentration has occurred in kraft paper, with few major players now, Frantschach, the European leader, Billerud, Korsnas, UPM-Kymmene.

There also was last year the announcement of the merger of the three aluminium giants, Alcan, Algroup and Péchiney, which did not come through though.

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