After flat demand in 2005, German producers of packaging in expanded polystyrene (EPS), accounting for processing of 25,000tpa to a value of around ˆ90m, have benefited from growth of just one percent in sales in the first half 2006, the IK plastics packaging association said.
Despite the growth and improvement in capacity utilisation, IK’s president Dr Georg Greiss said there has been a decline in sales in some areas such as domestic entertainment electronics and large household appliances (“brown” and “white” consumer goods). Here, a number of companies have followed their customers abroad and established subsidiaries in the neighbouring countries in Eastern Europe.
IK says that “dramatically changed cost structures are causing concern”. Unexpectedly strong demand, also for EPS in building insulation, has led to shortage of materials availability. There have been delays in the delivery of certain EPS grades and part deliveries have had to be made event with standard grades.
Against this background and that of increased energy costs, prices for EPS raw materials have risen by more than 20% since the beginning of the year and continue to eat away at the traditionally slim margins of the EPS packaging producers.
