Folding carton volumes have grown significantly during 2021, driven by a surge in sales of food and beverage packaging. Meanwhile, converters are experiencing growing supply chain disruption associated with the ‘perfect storm’ of COVID-19 factors, especially regarding raw material deliveries of cartonboard.
The very high order intake to cartonboard mills means some mill order books are full, with order lead-time growth from 3-5 weeks to 12-20 weeks and when coupled with increasing input costs to cartonboard mills, the European folding carton converters are being impacted by unprecedented price increases.
ECMA, in a recent report, says that the root cause of the current challenges can be summarised as follows:
- COVID-19 driven waste-paper collection issues leading to shortages in recycled fibre;
- Strong domestic Far-East demand coupled with distribution challenges to Europe, curtails imports of Far-East cartonboard and folding cartons;
- Historically significant growth in folding carton demand partly fuelled by the green transition, as consumer preferences shift to fibre packaging.
ECMA goes on to say that the folding carton supply chain is resilient and an escalation of the supply chain challenges can be mitigated by sound management across the entire value chain, of the forward inventory of both cartonboard and folding cartons. Our sector fully recognises the consumer shift to highly sustainable and circular folding cartons and is fully focused in supporting customer expectation.