The global cardboard box and container market is expected to grow at a steady rate over the forecast period on account of progressing food and beverage industry. Global industry observed a total revenue of approximately USD 500 billion in 2014. Increase in online sales is also expected to drive overall cardboard packaging industry in near future.
Cardboard boxes and containers are fabricated boxes majorly used for packaging goods. Key end use industries which use packaging include food & beverages, household electronic appliances, cigarette and medical instruments manufacturing.
Marketers make smart use of cartons by using attractive graphics on the packaging. Cardboards have good printing and graphic holding capability. Therefore, enterprises in order to attract consumer groups embed their logo, company name and other promotional details on their packaging.
Cardboard containers are cheapest form of packaging which helps in reducing the final product price on account of bundling with packaging which in turn is expected to increase its demand for packaging purposes in medical instruments, food & beverages and household electronic appliances.
The product is bio degradable and recyclable and poses least impact on environment. Their environment friendly nature is expected to increase their preference over their alternatives which include plastics and polymers.
Cardboards can be easily folded and stacked when not in use, thus occupying less space. Moreover, they do not undergo any chemical reaction with food and beverages as compared to metal containers. Corrugated cardboard boxes are light in weight and are very convenient to handle during loading and unloading. All these positive factors are also expected to significantly contribute towards overall industry growth.
Companies benefits on account of reduction in transportation cost because of their low weight. Rise of substitutes are the major threats faced by the cardboard packaging industry. Buyers have an option of vast variety of alternatives which include containers made up of plastic, metal and glass. There has been a considerable increase in usage of tin packaging in US resulting in decline of product applications.
Conglomerates tend to go for a backward integration to negate the power of suppliers and ensure continuous flow. One such example is Indian tobacco goods commonly known as ITC which established its own packaging unit.
Non durability is another threat which is pulling down the global market. Cardboard containers are easily prone to wear and tear. They have a low product life when compared to rugged containers made up of metal or plastics. Beverages face problems due to container leakage.
Over the decades, cardboard box manufacturing has been labor intensive. There has been significant progress in automating the manufacturing process. However, labor is still a vital for designing, machine operations, sales and management. Investment in technology is expected to increase, thus driving it towards being a capital intensive industry.
The global cardboard box and container market is segmented on the basis of container dimension and usage which further include paperboard and corrugated cardboard. The small size boxes generally used for food and beverages packaging are termed as paper boards. Within the food and beverage industry, paper boards are widely used in confectionaries, cereals and ready to consume fruit drink packaging.
Paper boards finds application in cigarette packaging and stationary. Corrugated cardboard finds applications in electronic products and shipping containers packaging. Electronic goods form the single largest non-food packaging application.
Asia Pacific accounted for maximum demand share in the global market. China was the leading country on account of high concentration of manufacturing sector. South Korea and Taiwan are expected to show an increase in regional cardboard packaging demand on account of developments in electronic appliances industry. The regional market demand was followed by North America owing to extremely high demand in US. Europe was adversely affected with decreased demand from manufacturing sector on account of economy downturn.
South America and Africa are expected to witness a slow growth on account of lack of manufacturing sector development. Asia Pacific was also the largest market for global cardboard manufacturing with China amounting for approximately 30% of global production. U.S. also contributed approximately 15% of world production.
Key vendors include TetraPak, International Paper Co., Koch Industries Inc. and RockTenn Co. Other vendors include Graphic Packaging Holding Co. and Smurfit Kappa Group plc. TetraPak provides packaging solutions for food and beverage industry. They are currently one of the largest food packaging company with their main product being tetrahedron-shaped plastic coated paperboard carton.
It is important for the cardboard manufacturing units to invest on technology so as to automate the production process. As the industry is slowly moving towards capital intensive, there is a need to achieve economies of scale. It can be achieved by diversification in various forms of packaging.
Container manufacturing is highly unstructured in nature. The concentration of major firms is very low and contributes to approximately one-fifth of global production. Most of the needs are catered by local players located in close proximity with the buyers.
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