Published: October 2015
Report Code: CM10389
Category : Packaging
Corrugated Packaging Market Overview
The global corrugated packaging market is expected to grow at a CAGR of 4.6% during the forecast period, to reach $195.9 billion by 2020. The increase in demand for corrugated packaging is anticipated due to rapid industrialization in developing economies, environmental sustainability and cost benefit associated with corrugated packaging.
Corrugated packaging market includes secondary shipping corrugated boxes, primary corrugated boxes, and corrugated retail display stands. These packaging are used for packing non-durable goods, durable goods, food and beverages, non-food and non-manufacturing (wholesale trade, and retail trade services). Processed food is expected to be the largest end-user industry for corrugated packaging, during the forecast period. However, beverages segment is expected to be the most lucrative industry for the corrugated packaging market. The upsurge in demand from beverages segment during 2011 – 2015 is expected to be higher than the overall corrugated packaging industry’s growth. The market share of the applications is likely to remain the same in 2020, as it was in 2014. Only corrugated beverage packaging segment is expected to witness a growth of around 1% to occupy about 13% of the global corrugated packaging market in 2020, as compared to 12% in 2014. The processed food segment is expected to maintain its leadership position in terms of market share, during the forecast period. The high demand of processed food from Asia-Pacific region is the leading driver of the corrugated packaging for processed food.
GLOBAL CORRUGATED PACKAGING MARKET SHARE, BY GEOGRAPHY (2014 AND 2020)
Asia-Pacific is expected to account for more than half share of the total corrugated market, by the end of 2020. The increasing industrial production, along with the extensive use of printed corrugated material for the non-durable and durable consumer goods are propelling the growth of the corrugated packaging market in Asia–Pacific.
Corrugated Packaging Market Dynamics
The emerging markets in Latin America and Asia-Pacific offer significant growth opportunity for the market. The increasing population, along with growing consumer awareness towards health and environment has increased the market penetration of corrugated packaging in non-durable products. The growth of E-commerce in China, India, and Brazil has boosted the demand of corrugated packaging materials in the recent years. With various new international e-commerce players entering the developing markets, the demand from e-commerce sector is expected to increase further.
The e-commerce industry has grown at a significant rate, over the past few years. The corrugated packaging in one of the most convenient and affordable mode of packaging for e-commerce industry, as the packaging is light weight and available at low cost, which makes delivery of the product easy and convenient. However, limitation of corrugated materials, such as low strength, low durability, and very low water resistance properties, is hindering their growth. The global market is undergoing a series of mergers and acquisitions.
Rapid industrialization in developing economies, and environmental sustainability and cost benefit associated with corrugated packaging, and growth of e-commerce and courier & delivery services industry are the factors responsible for driving the growth of the global market. Corrugated packing is one of the most cost-effective packaging solutions for many industries, as corrugated materials are natural, having the highest recycling rate among all packaging materials. In the recent years, both consumer and the regulatory bodies have raised their concern towards environment and sustainability. The increasing landfill is becoming more challenging for the governments in developed countries, and hence the demand for environment friendly and easily recyclable packaging material is growing, especially in the non-durable consumer goods. Europe has highest paper recycling rate (78%), while the developing countries are also aiming towards lowering carbon footprints. China is expected to increase its paper recycling rate up to more than 72% by the end of 2015. The government of developing countries are also encouraging the corrugated packaging material suppliers for sustainable development of packaging industry.
Rapid industrialization in developing nations has resulted in the increased international trade activities, expansion of infrastructure facilities, upsurge in per capita income and growth in several industries, such as chemicals, oil & gas, and energy. All this has boosted up the demand of corrugated packaging material in the recent years. The developing economies, mainly BRICS (Brazil, Russia, China, India and South Africa), are witnessing rapid industrialization in the current scenario, where China is a global leader with largest industrial output. As per Central Intelligence Agency’s (CIA) World Factbook, China’s industrial production was valued at $3.7 trillion, as compared to that of U.S. with $2.9 trillion in 2012. Thus, the demand for corrugated packaging is expected to increase from the developing countries, during the forecast period.
The current trend witnessed in the global market is increasing acquisitions in the corrugated packaging market. The small and region-specific corrugated packing suppliers are finding it hard to manoeuvre profitably in the corrugated packaging market, owing to the increasing prices of raw materials, such as paper pulp. The market has witnessed large number of acquisitions in the recent years. The falling profit margin particularly for small players has led to market consolidation, particularly in the developed markets such as North America and Europe. Rock-Tenn Company, Smurfit Kappa Group, Georgia-Pacific, Packaging Corporation of America, Mondi PLC, DS Smith PLC, International Paper Company, and Oji Holdings Corporation have been the key acquirers in the corrugated packaging market.
Corrugated packaging is among the most cost-effective packaging solutions for various industries. However, certain limitation such as low strength and poor barrier properties of corrugated material is limiting its acceptance in many applications. Corrugated packaging is best suited for bulky solid materials, such as industrial products. The corrugated packaging is not a preferred packaging material for liquid products, due to their poor barrier properties. Moreover, moist and humid weather decreases the firmness and strength of corrugated boxes. Corrugate packaging also has poor fire resistibility.
Corrugated Packaging Market Competitive Landscape
Some of the major players operating in the corrugated packaging market include Nine Dragons Paper (Holdings) Limited, RockWest Company, International Paper Company, Lee & Man Paper Manufacturing Ltd., Georgia-Pacific Equity Holdings LLC, Smurfit Kappa Group, Mondi Group, Packaging Corporation of America, Oji Holdings Corporation, and DS Smith PLC.