US demand to reach $6.9 billion in 2017
Demand for rigid bulk packaging is expected to reach $6.9 billion in 2017. Growth will accelerate from the performance of the recession-impacted 2007- 2012 period, and will reflect rebounds in manufacturing output and construction activity. Gains will also be driven by expanded use of larger, higher-value containers that offer enhanced performance and are more cost-effective than smaller types with shorter service lives.
RIBCs to be fastest growing bulk packaging product
RIBCs will be the fastest growing rigid bulk packaging product type through 2017, benefiting from a rebound in chemical production as well as cost and performance advantages over smaller, single-use, or shorter-lived packaging. Although RIBCs have a higher initial cost than other rigid bulk containers, these products offer increased storage space efficiency and longer service lives, allowing large-scale customers to realize significant long-term cost savings. Moderating growth to some degree will be competition from flexible intermediate bulk containers (FIBCs), which are substantially less expensive than RIBCs (although not as long-lasting) and capable of accommodating liquids if used in conjunction with a liner.
Material handling containers will also experience above average gains through 2017, aided by a rebound in durable goods production following declines during the 2007-2012 period. In addition, demand will be supported by increased emphasis on sustainability, which will lead to heightened usage of returnable and reusable containers in the production of durable goods as well as in the food and agriculture industries.
Healthy prospects for plastic drums will be based on advantages of lighter weight and lower cost than steel drums, along with continuing material enhancements, corrosion and impact resistance, and compatibility with most substances other than solvents and other chemicals that can degrade polyethylene. Despite the maturity of steel and fibre drums, drum demand will benefit from an upswing in manufacturing, especially in the chemical industry. Drums will remain a mainstay of the industry as a result of their relatively low cost, reusability, effectiveness in the safe transport of hazardous materials, and appeal to users not seeking to transition to IBCs.
Nondurable goods markets key to overall demand gains
Nondurable goods markets comprised over 80 percent of demand in 2012. Among these markets, chemicals and pharmaceuticals, and plastic, rubber, and fiber will experience the fastest gains through 2017. Advances will be driven by heightened manufacturing activity, especially in significant end markets for chemicals, plastic, rubber, and fiber products, such as motor vehicles and construction products. Increased requirements for these basic materials will result in greater demand for packaging used with bulk quantities.
Opportunities in the food and beverage market will benefit from consumer trends such as growing interest in convenient food preparation, which will support demand for a range of bulk ingredients employed in the manufacturing of such foods. The continued economic expansion will stimulate growth in consumer spending, including spending for food eaten or prepared away from home, boosting demand for drums and pails to ship food manufactured and/or distributed to foodservice venues.
US Demand for Rigid Bulk Packaging to Reach $7 Billion in 2017
Demand for rigid bulk packaging is forecast to advance 3.9 percent per year to$7.0 billion in 2017, accelerating from the performance of the 2007-2012 period.The improved outlook is based on a recovery in the overall economy, particularly in themotor vehicle and construction markets -- which were the hardest-hit segments duringthe 2007-2009 recession. This recovery will also spur turnarounds in output of chemicalproducts, fabricated metal products, and plastic materials, which will boost demand forrelated bulk packaging. Additionally, gains will be driven by expanded use of larger,higher value containers that offer enhanced performance and are more cost effectivethan smaller containers with shorter term service capability. Moreover, while the longterm trend of outsourcing manufacturing to lower cost regions has lessened the share ofthe US manufacturing sector in the overall economy, the development of abundantnatural gas supplies is expected to fuel increased investment in US chemical productionas well as that of related downstream goods, which will have a positive impact on rigidbulk packaging demand. Plastic accounts for the largest share of material use in rigidbulk packaging, with steel and paperboard also significant. These and other trends arepresented in Rigid Bulk Packaging, a new study from The Freedonia Group, Inc., aCleveland-based industry market research firm.
Rigid intermediate bulk containers (RIBCs) and material handling containers areexpected to experience the fastest growth through 2017. Opportunities for RIBCswill be supported by a rebound in chemical production as well as advantages of costeffectiveness and reusability. Material handling container growth will be driven by anupswing in production of durable goods such as motor vehicles and fabricated metalproducts following declines during the 2007-2012 period. In addition, plastic drums areforecast to log above average gains as a result of advantages over steel drums in terms of cost, weight, and corrosion resistance. However, competition from RIBCs as well asthe entrenched position of steel and fibre drums in certain applications will moderateadvances. Despite the maturity of steel and fibre drums, drums will remain a widelyused rigid bulk packaging type as a result of their relatively low cost, reusability,effectiveness in the safe transport of hazardous materials, and appeal to users notwishing to transition to intermediate bulk containers.
Learn how to effectively navigate the market research process to help guide your organization on the journey to success.Download eBook