European flexible packaging market grew just 1.7% last year

Last year was a very difficult one for the European flexible packaging industry with the market’s size growing by just 1.7% to E9.3bn, according to PCI Films Consulting.

The UK group forecasts in The European Flexible Packaging Market that the European market will be worth E10.4bn by 2008. This is an annual growth rate of just over 2%. PCI expects annual growth in western Europe to pick up marginally to 1.4% until 2008, but the region will continue to be the slowest growing in value terms of any region worldwide.

In contrast, central and eastern Europe will see average growth rates of 7% per annum over the period. PCI’s outlook for Turkey, which experienced 8% growth in 2003, is that the market will ease back to an average of 5% per annum over the period.

PCI said that for most of the industry, ongoing overcapacity, increasing raw material prices and downward price pressures from customers combined to squeeze margins further in 2003. Study author Paul Gaster said: “Over the next few years we see the leading multi-national food processors and their flexible packaging converter suppliers switching an increasing proportion of production to plants in central and eastern Europe, particularly in Poland and Czech Republic, to take advantage of the lower cost base to supply not only local markets but the whole of Europe.”