High Maintenance Cost of Corrugated Packaging Machinery Expected to Hamper Profitability Margins of Manufacturers
The global market for corrugated boxes was valued at US$ 107.8 Bn in 2017. The market is forecast to expand at a CAGR of 4.3% during the forecast period, 2018-2028.
The corrugated boxes market is expected to witness continuous growth in demand during the forecast period
With the growing demand for packaging in the key end-use sectors such as food & beverages, electrical & electronics, and e-commerce industries, the demand for corrugated boxes is expected to witness significant growth during the forecast period. The crucial growth factor in the global corrugated boxes market is the low-cost and optimum protection characteristics of corrugated boxes. These are widely used as a secondary packaging solution to pack a variety of products in different end-use industries.
The demand for corrugated boxes is expected to witness substantial growth in the next 4-5 years owing to the growing popularity of online shopping in the developed, as well as in developing countries, such as Germany, the U.S., India, and China. With the rise in online shopping platforms, the demand for packaging products, such as corrugated boxes, that offer optimum protection during shipping and handling will also gain a strong foothold in the global market.
Corrugated boxes could be easily recycled and do not pose any threat to the environment. Governments in both, developed as well as developing economies, are launching new initiatives to recycle more and more paper packaging products to reduce the use of virgin material which requires enormous resources to produce an end product.
The global push for recyclability in the corrugated boxes market will create enormous opportunities for the recycling companies globally. It is also witnessed that recycled fibre offers distinct cost advantage for the production of corrugated boxes. It requires less energy and resources to manufacture corrugated boxes as compared to virgin fibre.
High cost of machinery and maintenance costs negatively affecting profit margins
High installation costs of machinery and equipment create a backlash factor on revenue margins in the long run, restraining the global corrugated boxes market. Corrugated box manufacturing process involves multiple stages which range from designing, layout, die cutting, waste recovery, etc. and require machinery and equipment for applications such as emission control, cooking, pulp storage, etc.
The installation costs incurred by the manufacturers are quite large and the machinery turns to be invariably very expensive. Also, the maintenance cost of cartoning machine is too high which, in turn, hampers profitability margins of the manufacturers. Corrugated boxes have a low strength threshold which makes them less suitable for primary packaging of goods.
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Golden period for the European corrugated boxes market owing to high demand for corrugated packaging, low OCC cost, increasing paper prices, and high profitability margins
The North American corrugated boxes market includes a country-level analysis for the U.S. and Canada. The U.S corrugated boxes market is expected to grow at a CAGR of 2.4% over the forecast period. The recent acquisition of Kapstone Paper and Packaging Corporation by Westrock Company proves the fact that the U.S. corrugated boxes market is expected to witness consolidation in the coming years.
Manufacturers of corrugated boxes are planning to increase their production capacities due to the increasing demand for corrugated boxes from the retail e-commerce packaging industry. The Latin American corrugated boxes market includes a country-level analysis for Brazil, Mexico, and Rest of Latin America. The Brazil corrugated boxes market is expected to expand at a CAGR of 3.5% during the forecast period.
The Western Europe corrugated boxes market includes a country-level analysis for Germany, Italy, the U.K., France, Spain, Benelux, and Rest of Western Europe. Germany, followed by the U.K., represents the largest market share in the Western Europe corrugated boxes market. European corrugated boxes market is experiencing its golden time because of the high demand for corrugated packaging, low OCC cost, increasing paper prices, and high profits which make it a lucrative industry in the European region.
Also, the European corrugated industry has witnessed more than 100 mergers and acquisitions in the period of last ten years. Market leaders such as Mondi Group, Smurfit Kappa Group, and DS Smith are the most active acquirers in the European corrugated industry. These companies are now planning to expand their footprint in the developing countries of the Asia Pacific and Latin America.
The APEJ corrugated boxes market includes a country-level analysis for China, India, ASEAN, Australia & New Zealand, and Rest of APEJ. The APEJ corrugated boxes market represents the most lucrative geographic region in the global corrugated boxes market. China and India are expected to be two promising regions in the APEJ corrugated boxes market.
The APEJ corrugated boxes market is expected to expand at a CAGR of 3.5% over the forecast period. The Middle East and Africa (MEA) corrugated boxes market includes a country-level analysis for North Africa, GCC, South Africa, Turkey, and Rest of MEA. The MEA corrugated boxes market is expected to expand at a CAGR of 5.0% over the forecast period.
Key players in the global corrugated boxes market
Key players operating in the global corrugated boxes market include Smurfit Kappa Group Plc, International Paper Company, WestRock Company, Georgia Pacific LLC, Pratt Industries, Inc., Oji Holdings Corporation, DS Smith Packaging Limited, Stora Enso Oyj, Mondi Group Plc, Tat Seng Packaging Group Ltd., VPK Packaging Group nv, Nelson Container Corporation, Great Little Box Company Ltd., Action Box Inc., Acme Corrugated Box Co. Inc., Wertheimer Box Corporation, Shillington Box Co., LLC, Bee Packaging, A.D. Incorporated of Milwaukee, and Shanghai DE Printed Box.
Global Corrugated Boxes Market Segmentation: By Board Type
- Single-Face Board
- Single-Wall Board
- Double-Wall Board
- Triple-Wall Board
Global Corrugated Boxes Market Segmentation: By Material Type
- Virgin Containerboard
- Recycled Containerboard
Global Corrugated Boxes Market Segmentation: By Grade Type
- Fluting Medium
- Semi-Chemical Fluting
- Recycled Fluting
Global Corrugated Boxes Market Segmentation: By Product Type
- Slotted Box
- Folder Box
- Telescope Box
- Die Cut Box
Global Corrugated Boxes Market Segmentation: By End Use
- Processed Food
- Fresh Produce
- Dairy Products
- Food Grains
- Confectionery and Bakery Items
- Other Foods
- Electrical & Electronics
- Textiles & Apparels
- Building & Construction
- Automotive & Allied Industries
- Medical Devices
- Personal Care & Cosmetics
- Chemicals & Fertilizers
Global Corrugated Boxes Market Segmentation: By Region
- North America
- Latin America
- Western Europe
- Eastern Europe
- Asia Pacific excluding Japan (APEJ)
- Middle east and Africa (MEA)