Biopack - Corrugated cardboard packaging

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Industry Development Draws in 60 mil. Euros Investments

2014-08-16 11:11:23

Belgians from VPK entered the corrugated cardboard market by building a factory in Salonta, Austrians from Rondo Ganahl, who own Rondocarton Cluj, built a new factory in Tragoviste and the Swedish from SCA invested in the expansion of the Timisoara factory. All these factors raised investments on this market to over 60 mil. Euros this year.

"Unfortunately all investments finalized at the wrong time; that of the financial crisis, which affects all industries. If there were no crisis, the big investments made in such a short time on the corrugated cardboard market wouldn't be a problem." said Teofil Campean, general director at Rondocarton, corrugated cardboard producer.

Campean says that even though there were no significant investments in raising the capacity of corrugated cardboard production, next year it is estimated a fall in volume on this market, which is dependent on the other industries affected by the financial crisis.

"My opinion is that corrugated cardboard  market will see a drop in volume next year. Closing down factories and reducing the activity of companies which producers  provide packaging with, will affect the evolution of corrugated cardboard packaging market and will affect the market in its entirety, which is an indicator of the well-being of economy. "said Teofil Campean.

Rondocarton manager added that in all industries clients reduced volume production therefore the volume of packaging delivered by producers will also be reduced. Regarding the new factory in Targoviste, which received a 38mil. Euros investment, Campean says that even though the economic context is not the most favourable, such an investment was necessary for maintaining the position on the market. "  We will try to fight against the crisis by being competitive" he said.

Competitiveness on the corrugated cardboard market gradually intensified. Most market players achieved big investments in developing production capacities and they did that  considering that the market grew at a rather slow pace, dependent on the growth of automobile industry, food and chemical industry and other industries that use packaging.

A rise in investments will lead to a supply raise by 20% or ca. 25.000 tonnes more than the demand, which will accentuate competitiveness on the market, as Nicolae Toth, Dunapack Rambox sales director appreciated.

"As a consequence of these investments, we will witness a market better accommodated with corrugated cardboard packaging. Due to the raise in competitiveness, producers will specialize in certain industries in providing with packaging. To differentiate between each other, corrugated cardboard packaging producers will orient themselves towards a certain industry like the auto industry, food, chemical and the situation will be different from the current one: one producer makes packaging for all industries" declared Lorand Kasler, SCA Packaging sales director.

Investments will fortify the positions of big players and will eliminate certain processors ( those who buy corrugated cardboard sheets and turn them into packaging ). " Almost 50% of corrugated cardboard processors are small processors, or garage-processors.  Only the competitive ones will stay on the market, the ones who find a niche, on the condition that competitiveness intensifies" he said.

Lorand Kasler also said that there are very big imports on this market. " As consequence of investments into local market I hope we witness a drop in imports of corrugated cardboard packaging and also Romanian retailers turning to local producers" he said. He also added that the Romanian market of corrugated cardboard is very fragmented.

"Until this year, the corrugated cardboard market followed an upward trend, when a slight stagnation was registered or even a slight drop, due to the financial crisis. I can't speculate on a possible drop or raise of this market, considering that I foresee a drop of industrial goods and conservation for goods in the FMCG industry" he explained.

Last year, corrugated cardboard market was up to 420 mil sq m. which adds up to 135 mil Euros, considering a price of 320 euro/q m., according to data offered by players on the market and ZF calculations. Last year, paper and cardboard consumption amounted to 36 kilograms per inhabitant, compared to the European average of over 80 kilograms per inhabitant.

Other players on this corrugated cardboard market are Vrancart Adjud, Ecopack, Romcarton and  Dunapack

Who invested in corrugated cardboard

Belgian group VPK

  • Investment: 15 million Euros in a new factory in Salonta, Bihor county
  • Built area factory: 15.600 sq m
  • Total production capacity: 30.000 tonnes of corrugated cardboard annually
  • 70% of production will be cardboard sheets ( to corrugated cardboard processors) and 30% corrugated cardboard packaging to direct clients
  • Jobs in 2-3 years: 200 people

Austrians who own Rondocarton Cluj

  • Investment: 38 million Euros for building a corrugated cardboard production factory in Targoviste
  • Built area: 16.000 sq m
  • Total production capacity: 60.000 tonnes of corrugated cardboard annually but the factory won't operate at full capacity in its first year
  • The company also owns a unit in Cluj, which generated earnings of 30 mil Euros

The Swedish from SCA Packaging

  • Investment: 9 mil Euros in expanding the corrugated cardboard factory in Timisoara by 12.000 sq m
  • Built area: 17.000 sq m
  • The factory will begin producing, not just processing corrugated cardboard
  • Estimated turnover: 8 mil. Euros, a raise of 30% from last year
  • Total production capacity: 80 mil sq m per year
  • Corrugated cardboard processed this year: 7 mil sq m
  • Clients from the auto industry: Dacia and Valeo

Source: www.zf.ro



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