headline press information

Date 27th May 2009 / www.procarton.com
Title Carton is here to stay!
Text Franz Rappold, Board Member at Mayr-Melnhof Karton and President of CEPI Cartonboard (European Association of Cartonboard Manufacterers), and Per Lundeen, President and CEO at A&R Carton and President of ECMA (European Cartonmakers Association), both looked confidently into the future in our interview. Dynamic innovations in both the supply chain and the products, as well as superior sustainability, will continue to give carton and cartons competitive market advantages in the future.

1. The financial turmoil is affecting every sector of business. What impact is it having on the cartonboard / carton market in Europe?

FR: The financial crises, which ended in a severe economic downturn all over the globe is also affecting the business of the cartonboard and carton industry in Europe to a certain extent . Consequently the demand for cartonboard and boxes is declining, but it is different by region and the particular “end use”. A close cooperation between the cartonboard and the carton industry is needed to better reflect the real demand of the supply chain in short and medium turn future.

2. With over 50% of carton usage in the food sector, is this area holding up better than some of the other end use areas?

PL: Food and non-food, covering basic needs, seems to be less affected than other non-food sectors which probably makes the folding carton sector less sensitive to the current situation than other packaging materials. However, there is a slower demand for most goods, but it is still difficult to judge due to a lot of emptying of stocks in the supply chain.

3. How are export markets holding up?

FR: A small number of European cartonboard producers are traditionally serving markets outside of Europe. Parallel to Europe, these suppliers are seeing a decline for both virgin and recycled fibre cartonboard in these markets. The long tradition and the higher qualities supplied from Europe help to stay in business in this area, at prices which are in most cases better than local ones. It seems to be that “the bottom has been reached” and the more regular purchasing pattern can be expected as of now.

4. Innovation has always been a key to break into new markets. What new markets do you think can be accessed?

PL: Our customers are still looking for a lot of innovation in the packaging. This continues to be a good driver for them to differentiate and to grow sales. We can see that the interest is even increasing for innovation at the moment. This is valid for many sectors of the market.

5. Raw material markets have been volatile. Do you see this continuing and do you think some stability will return in due course?

FR: The development of raw materials for the cartonboard production – be it virgin fibre or recovered fibre – is volatile. Particularly, the last months have shown significant changes, for example energy. Whilst fibre prices came down towards the end of the year, stabilized at the begin of the year and are now on the move up again, we see energy costs on a relatively stable high level, particularly natural gas.
The cartonboard industry has been able to respond to the converters and to the supply chain with more attractive prices complying with the request of lower packaging costs from the entire supply chain. We cannot predict the cost development beyond mid year. It is obvious that we will stay in a close contact with our customers to respond quickly.

6. Have you noticed any individual end use areas that are holding up well in comparison with previous years?

PL: Several areas are holding up well compared to previous years, such as pharma. Many food sectors are also keeping up well, especially in areas where convenience is important across most sectors. However, the supply chain seems to be thinner and quick reactivity is needed to serve the markets.

7. Are you optimistic about the future of cartonboard/carton sales in the next 12 – 24 months?

FR: We would be “bad managers” if we would not see opportunities in these difficult times, but in the same way we do not ignore the threats.
Clever marketing based on a close dialogue with the entire supply chain is the name of the game. Cartonboard producers and cartonboard converters who can offer clever packaging and transport logistic solutions on a Pan-European basis are definitely in a better position. Consistent supply, consistent quality, competent marketing and sales teams will guarantee a competitive edge and offer a “USP” versus other packaging sectors. Indeed, we feel positive for the period following the present stagnation, and after consolidation, the market will grow. We are prepared for now and for the future.

8. In packaging the market seems to be moving towards efficiency and sustainability. Do you see cartonboard and folding cartons well prepared for growth after the crisis?

PL: Carton is made from wood – a renewable material – and has a low environmental impact compared to other materials. Carbon is stored in the wood when trees grow and remains in the material until it is eventually incinerated and recovered as energy. The material can also be recycled and reused up to seven times before the fibres wear out. As long as forests are managed in a sustainable manner, carton is a premium sustainable packaging choice.
Current lifecycle analyses show that carton is superior to other packaging solutions when it comes to CO2. Future analyses will show carton in an even more favourable light if they include biogenic carbon sequestration in the material – a project that the industry organisation, ECMA, is currently working on.

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Franz Rappold, Board Member at Mayr-Melnhof Karton and President of CEPI Cartonboard (European Association of Cartonboard Manufacterers)

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Per Lundeen, President and CEO at A&R Carton and President of ECMA (European Cartonmakers Association)



Richard Dalgleish +44 777 613 8510 dalgleish@procarton.com
Suzanne McEwen +43 1 218 6918 mcewen@procarton.com
Background Pro Carton is the European Association of Carton and Cartonboard manufacturers. Its main purpose is to promote the use of cartons and cartonboard to brand owners, the trade as well as designers, the media and politicians as an economically and ecologically balanced packaging medium.