Global Folding Carton Packaging Market - Segmented by End-User (Food and Beverage, House Hold, Personal Care, Ecommerce, Health Care, Tobacco, Hardware and Electrical), and Region - Growth, Trends, and Forecast (2018 - 2023)
The Global Folding Carton Packaging Market was valued at USD 85.74 billion in 2017 and is expected to reach a value of USD 115.15 billion by 2023 at a CAGR of 5.04% during the forecast period (2018 - 2023).
The folding carton packaging is one of the most famous ecofriendly packaging solution. The applications range from simple local store solutions to electrical equipment packaging solutions. The major users of the solutions include food & beverage sector, ecommerce industry tobacco, and house hold goods. The ability of the product to be produced in a large variety of sizes makes it feasible in almost all the end-user verticals.
The Asia Pacific region is growing at the fastest pace due to abundance in raw material supply and intense demand. Rising population and increasing urbanization stand to be the most significant factors driving the demand in the region. The recently diminished raw material prices are creating positive outlook for the North America and Europe. The increased recycling activity in the mature markets is expected to pay back in the form of cheaper raw material lead to increased profit margin for vendors in North America and Europe during the next five years.
Asia Pacific to Spearhead the Growth
Asia Pacific is the fastest growing market for packaging industry. The strengthening economy in the region is providing better spending power to the population. Countries, like China, India, Japan, South Korea, and Indonesia are increasingly becoming popular for growth in the retail and manufacturing sector. Due to high price of the raw material, paper board vendors are benefiting largely but the profit margins of the manufacturers are dropping rapidly. Even at such scenario, Asia Pacific companies are able to thrive reasonable profits due to high volume of consumption in the developing countries.
The skyrocketing prices of the raw material in the recent years has promoted the practice of recycling in the region, especially by the Ecommerce industry. Asia Pacific is the largest Ecommerce economy in the world. With increasing mobile and internet penetration in countries, like India, China, and Indonesia the Ecommerce industry is likely stay ahead of others in demand for folding carton packaging. Campaigns, like Make in India and the preparations for Tokyo Olympics have marginally increased the opportunities for folding carton packaging market in the region. With constant growth in the region forecasted by the World Bank in the near future, Asia Pacific is expected to emerge as a hot spot for folding carton packaging solutions.
Price of Raw Materials to Stand as Serious Threat to the Market
Since 2011 the folding carton packaging market has faced severe loss in profit margin due to the increasing cost of raw materials. According to Paperboard Packaging Council (PPC), the raw material prices of the folding carton packaging market rose annually at an average rate of 2.2% between 2011 and 2016. However, this increase in the raw material prices cannot be reflected to end user at a same rate. This is one of the major reasons why the average value of folding cartons has increased by on 1.3%, during the same period when the raw material prices grew by 2.2% annually.
The scenario has put downward pressure on the profitability of carton converter’s as their costs increase at a higher rate than what they can sell for. This scenario led to severe shutdown activities of folding carton plants globally, especially in mature markets, like US. However, recently there has been a break in board prices as 2016 saw a 1.3% decline. Increasing new boxboard capacity in Europe coupled with an oversupply of carton board in China has helped the folding carton packaging market by putting some downward pressure on raw material prices and is expected to remain the same during the forecast period.
North America to Stay on Top of the Charts Led by US
Although there is an increasing competitive rivalry from Asia Pacific countries, like China and India, North America stands to be the top market for folding carton packaging in terms of revenue. The recently dropped raw material prices led by oversupply in China and Europe are providing better profit margins to the US vendors leading to increased activity in the region. With promising outlook for the macroeconomic environment in the region folding carton producers are expected to benefit from their operations.
However, the competition for the overseas market is expected to continue challenging the domestic producers during the next five years. But the anticipated strength of the US dollar compared to most global currencies, the current situation is expected to retain during the forecast period. In addition, competition from alternative packaging methods and materials is expected to contract the market marginally while changing trends in the regional food & beverages industry provides hope to benefit from the product’s environmentally friendly profile.
Key Developments in the Market
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