FFI (Fachverband Faltschachtel-Industrie e.V.), the German trade association for carton makers, represents the interests of more than 60 German companies with over 80 production locations that manufacture about 842,000 tonnes of folding cartons per year, amounting to a production value of about EUR 1.82 billion. The members of the FFI account for roughly two thirds of German industry’s sales.
The association reports that, following the first half of 2017, a considerable increase in order intake by the carton industry has lead to a substantial upturn in business during the autumn. This is particularly true of food and general packaging, which is a large-volume end-user sector. In addition, the pharmaceuticals, cosmetics and confectionery segments remain strong and guarantee continued high capacity utilisation.
Regarding existing European mill capacity for cartonboard, the increased demand from carton makers in other European markets has meant that the lead times quoted to German carton manufacturers (particularly for virgin fibre grades) have extended considerably in recent months. At the same time, cartonmakers report rising raw material prices (long and short fibre mechanical pulp, chemical pulp, starch, titanium dioxide, energy) as well as higher prices (and delivery bottlenecks) for other important materials such as printing inks and lacquers. There is also a shortage of freight capacity (long and short-distance) which has an adverse impact on delivery times and costs in the supply chain.
While rising costs remain of concern for German cartonmakers, forecasts issued by ifo-Institut in Munich, indicate that processors of paper and board are anticipating good to growing production and positive ongoing business development in the coming months. They believe that consumers will continue to spend and that their confidence will remain high – thanks in part to the fact that the economy is still developing well.