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For the year 2000, we estimate the value of the total packaging market at around $7.3 billion.
Paper and board packaging
For 2000, we estimate that the market increased by $91 million reaching a level of $2,747 million for the year. We forecast that this market will increase by a further $93 million in 2001 to be worth $2,840 million.
Market overview
The market for folding cartons can be divided into two major segments-.
- The short-run market that produces higher quality packaging for consumer products such as cosmetics, pharmaceuticals, computer software, etc. and smaller food items.
- The high volume segment - mostly for fast moving consumer goods such as cereal boxes, washing powders, etc.
Collectively, these segments are estimated at $510 million in 2000/01, with forecasts estimating the value in 2001/02 to be worth $535 million. This represents an annual increase of 3.S% from 2000 to 2001. The share of the folding carton segment to the paper and board packaging market remained unchanged at 18.0%.
The most significant developments in the Australian Folding Carton industry over the past 12 months is the rationalisation of the market. Two significant acquisitions took place, both towards the end of the 2001 financial year where Wadepack acquired Hollow Brothers and Bourke and the acquisition of Pernara Packaging by Colorpak.
This has seen the number of significant competitors in the market decrease from ten to eight, with further, albeit limited, acquisitions forecast for the 2002 financial year.
These acquisitions will see Wadepack's turnover increase by approximately $12 million and Colorpak's turnover increase by $9 million per year. These acquisitions are significant in that they are both strategic acquisitions that widen the customer base and the market segments served by Wadepack and Colorpak.
Globalisation over recent years has threatened the market for folding cartons in Australla. One result from globalisation is the centralisation of manufacturing processes to low cost bases, which may result in manufacturing processes being moved off shore from Australia, thereby eroding the demand for folding cartons.
Market size
In value terms, we estimate that the folding carton market increased from $493 million in 2000 to $510 million in 2001 and is expected to increase to $535 million in 2002. In volume terms, local supply to the Australian market increased by 8Kt from 1998/1999 to 1999/2000 with local supply forecast to increase by 2.5Kt from 1999/2000 to 2000/2001.
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