Folding Cartons: A Strong Message
The folding carton industry has some substantial positive qualities, which, in the long run, should bode well for its future. Two noteworthy aspects are its strength in the food and beverage markets and its position as a renewable resource. However, in light of the global economic meltdown, no industry escaped unscathed—2008 was a very challenging year all around.
"Obviously, 2008 was one of the most difficult years in recent folding carton history," notes Tony Petrelli, president of CardPak (www.cardpak.com). "At no time in my 25 years in the industry have I seen double-digit declines in sales such as the ones that occurred during particular periods this past year."
According to Petrelli, who is also chairman of Paperboard Packaging Council's (PPC, www.ppcnet.org) board of directors, PPC's data indicated that the industry was down almost 1.5 percent in 2008 in the dollar value of product shipped and more than 3.0 percent in volume (tons) produced.
"Last October, the industry took a dive," said Ben Markens, PPC president. "Volumes went down in a hurry." This trend is continuing into 2009 as Markens reports that shipment tonnage is down just less than 5 percent and inventories are down 10 percent year-over-year through June. In addition, he said preliminary indications show a slight margin compression in 1Q09.
The American Forest & Paper Association (AF&PA, www.afandpa.org) reports similar data for folding cartons in its most recent June 2009 industry report. It compared the first half of 2008 production with that of 2009. The 3,481 tons produced in 2009 was 10.1 percent lower than the 3,873 tons produced in 2008. This large percentage drop can be attributed to the first part of 2008 being relatively more robust than later in the year.
AF&PA further reported that capacity utilization for solid bleached packaging was at 85.4 percent in June 2009, down 11.2 points from June of 2008. However, this was up 6.1 points versus May 2009, while overall paperboard production increased 3.8 percent from May to June 2009.
- People:
- Ben Markens
- Tony Petrelli