Global Demand to Grow for Corrugated Boxes

May 6, 2009 - World demand for corrugated boxes is forecast to increase 3.4 percent per year to 213 billion square meters in 2013, in line with real (inflation-adjusted) gains in GDP, according to a new study by The Freedonia Group.

The study, World Corrugated Boxes, says factors contributing to rising box demand include growth in industrial activities, particularly the manufacturing sector, which often requires corrugated packaging to protect and transport goods. In addition, ongoing developments in small flute and high-quality graphic board will allow corrugated boxes to penetrate traditional folding carton applications, especially in the developed world.

Greater interest in corrugated packaging as a point-of-sale display in retail applications will also boost demand for value-added corrugated boxes.

Additionally, corrugated boxes will benefit from their environmentally friendly image, as well as certain cost advantages compared to plastics crates, which typically involve cleaning and returning costs.

Recycled Board to Capture More Market Share

Global containerboard demand growth will trail box production as trends toward the use of higher-performance, lighter board continue. In addition, recycled board will continue to capture market share at the expense of virgin kraft linerboard and semichemical corrugated medium (fluting), accounting for over 70 percent of board by 2013. Advances for recycled board will be bolstered by consumer, industry and regulatory pressures for environmentally friendly products and practices, rising virgin board prices and rapid demand growth in Asia, which is heavily reliant on recycled liner and fluting.

Developing Regions to See Fastest Increases

The fastest increases will occur in the world’s developing regions, although growth rates will moderate from the 2003-2008 period.

The Asia/Pacific region, Eastern Europe and the Africa/Mideast region will all outpace the global average. Some of the best gains are expected in China, which will surpass the US as the world’s largest corrugated box market by 2013; and India, which will benefit from strong growth in industrial output and consumer product markets, as well as greater investment in state-of-the-art manufacturing equipment, resulting in improved product quality. China will account for about half of the increase in demand over the forecast period. Greater urbanization and industrialization, and expanding international trade will support advances in these regions’ generally underdeveloped packaging sectors. Rising consumer income levels and expanding middleclasses will also generate robust internal demand for packaged consumer goods like processed foods, beverages and personal care items, supporting increases in corrugated box consumption.

World Corrugated Boxes analyzes the 180 billion square meter world box industry. The study presents historical demand data for the years 1998, 2003 and 2008, and forecasts for 2013 and 2018 by raw material (e.g., containerboard, adhesives, inks, waxes), end-use market, world region (e.g., Asia/Pacific, North America, Western Europe) and for 24 major national markets.

The study also considers market environment factors, details industry structure, evaluates company market share and profiles 35 industry players, including International Paper, Smurfit-Stone Container and Smurfit Kappa.

For further details about the study, visit: www.freedoniagroup.com

SOURCE: The Freedonia Group

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