Review of the 9th Cartonnage Meetings
As a supplier partner of CAP FEDE, Packitoo was able to attend the 9th Cartonnage Meetings in Paris on Friday, June 16, 2023, with and for you.
The program included informal discussion periods between company directors, suppliers, and facilitators.
As well as a program of several very informative conferences:
- "Economic and financial situation of companies in the paperboard and stationery industry", by two speakers from the Banque de France.
- "Paper-cardboard: 2022 Review and 2023-2024 Perspectives", by Yves Jégourel, Chair Professor, Economics of Raw Materials and Sustainable Transitions at the Conservatoire National des Arts et Métiers.
- "Paperboard manufacturers torn between regulations, decrees and laws", by Kareen Desbouis of COFEPAC.
Here's what we've taken away from it and want to share with you in our report.
1 - Economic and financial situation of companies in the paperboard and stationery industry
The first presentation was given by the Banque de France, which conducted a dedicated study of the economic and financial situation of companies manufacturing stationery (NAF code: 1723Z), folding cardboard packaging (NAF code: 1712B) and corrugated cardboard packaging (NAF code: 1721A) from 2017 to 2021.
The sector is mainly made up of micro, small and medium-sized enterprises, since – for folding and corrugated cardboard alone – over half of the companies have 30 employees or fewer.
The Banque de France notes that our industry is fortunate to have a number of experienced managers at the head of mature companies, but for how much longer? Indeed, many transfers are expected in the years ahead.
The speakers began by discussing 2020, a year marked by a health crisis, an economic crisis and a general fall in activity, which saw a rebound in activity in the following two years.
In 2021, the net income rate more than recovered its pre-crisis level in terms of the profitability of companies in our sector.
In 2022, the positive momentum of activity continued for all segments of the sector, driven in particular by rising product prices. Overall company performance improved over the year.
2023 will be a more mixed year. Firstly, regarding the issue of consumption, which is decreasing, mechanically leading to a decrease in packaging consumption. The decrease in volumes observed in the first half of 2023 is still accompanied by a good level of margin because the decrease in raw material prices is not systematically passed on. On the other hand, the outlook seems less good for the second half of the year. Overall, 2023 should be a rather good year, even if it is down compared to the two previous years.
2 - Paper and cardboard: 2022 review and 2023-2024 outlook
The second conference was led by Yves Jégourel, Chair Professor of "Raw Materials Economics and Sustainable Transitions" at the Conservatoire National des Arts et Métiers.
The professor begins by presenting the macroeconomic uncertainties of recent years, which are persistent and represent obstacles to the packaging sector: high US inflation, European inflation dependent on energy prices, a disappointing recovery of the Chinese economy following the reopening of its post-COVID borders a few months ago, and stagnant global growth. This current volatility is undermining many companies.
Let's move on to the costs of raw materials. Recently, the industry has been experiencing a decline in gas, electricity and oil prices, due in particular to inflation, the appreciation of the dollar and the economic situation in the United States, leading in particular to an increase in international cardboard prices, where the cost of pulp has reached record levels in France and Europe.
What are the future prospects?
- Firstly, Chinese demand will be decisive for global growth, given that Asia will contribute more than 70% to it. However, the latest figures are not necessarily encouraging.
- As noted above, the European energy crisis is still ongoing and is creating an imbalance between supply and demand.
So what advice for the industry?
- A fixed selling price for your products versus a variable price for your inputs is a risky economic model, which only holds if there is very high added value.
- In any case, you need to think about your pricing practices to properly link selling prices to input prices or, in the other case, to think about your supply contracts (especially for energy) with fixed prices.
3 - Cardboard manufacturers torn between regulations, decrees and laws
At the center of a greener policy by the French Government and the EU, recyclability is no longer sufficient on its own, and the reduction and/or reuse of packaging now represents a set of challenges for corrugated board manufacturers, who are dependent on new regulations, decrees, and laws.
The draft European regulation on packaging and packaging waste is a time bomb for corrugated board manufacturers, with strong lobbying from reuse stakeholders. Advanced discussions even proposed imposing 90% reusable packaging for transport packaging, 100% intra-site and intra-national, 50% in grouped packaging, and 75% in take-away and beverage packaging.
However, several questions remain regarding the "all-reuse" approach, advocated by powerful lobbies within the EU:
- Issues of hygiene, traceability... What about the transport of dangerous goods?
- Reuse implies standardization (costs): loss of brand identity, counterfeiting, what about ownership of the packaging?
- Costs that are currently unknown: storage areas, inventory management, transport, rental systems, etc.
- The champion material for reuse will undoubtedly be plastic, yet it is widely criticized...
- No consumer acceptance studies (small scale / large scale)
The French Paperboard Packaging Committee (COFEPAC), via Kareen Desbouis, presenter of this conference, is making it known that it aims to protect your activities and interests at the highest European level. This is a direct threat to our industry, a champion of the circular economy: in 30 years, while world paperboard production has almost doubled, virgin fiber consumption has remained stable. Proof that recycling works.
Our industry must be part of a dynamic of progress:
- Paperboard packaging has a role to play in the substitution of plastic packaging
- Expertise and advisory role of packaging manufacturers.
- A dynamic industry to meet current challenges.
We need to show that we can go further. You can contact COFEPAC on our behalf if you would like to know their "paper-cardboard roadmap".
Faced with these challenges, we are at your disposal to advise you and support you in your digital transformation to serve your teams and your customers.