Continuing Squeeze on Converter Profitability

PRESS RELEASE

"The European Flexible Packaging Market 2005" is the latest edition in PCI's series of annual studies on the European flexible packaging market. It updates historical data and provides market analysis and statistics for 2004 and forecasts to 2009. The 250 page study is based on original field research, conducted across Europe in early-2005.

The study forecasts European demand for converted flexible packaging growing at 1.7% per annum from €9.2 billion in 2004 to reach approaching €10.0 billion by 2009. PCI expects growth in Western Europe to remain around 1% per annum over the period, while for Central and Eastern Europe the picture is much brighter with average growth rates of nearly 7% per annum. In Turkey we expect growth to moderate from 8% in 2004 to an average of 5% per annum over the next five years.

The report also notes the problems of overcapacity and the effect of rising raw material costs in the second half of 2004, concluding that high substrate prices are likely to remain a feature for the rest of 2005. Another noted trend is that leading multinational brand owners are switching more of their production out of Western Europe to lower cost East European locations and have begun to source their flexible packaging from local suppliers. Leading multi-plant converter groups, such as Amcor Flexibles and Alcan Packaging, are establishing a much stronger manufacturing presence in the East through acquisition and green field investment. More are expected to follow as this trend continues.

See pcifilms.com. For further information about this study and the work of PCI contact study author Paul Gaster at p.gaster@pcifilms.com or PCI managing director Simon King at s.king@pcifilms.com.



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