A new market report by ING Wholesale Banking predicts that during the next decade the flexible consumer packaging and folding cartons sectors in Europe will be characterized by a period of consolidation.
Frans Boumans, director of ING corporate clients explains, “There are many reasons for us to be interested in packaging markets at this time, especially flexible consumer packaging and folding cartons. There are tough times ahead for these businesses, but there are also opportunities.”
The report has been developed by the ING economics and corporate clients departments, with specialist management consultancy STFI-Packforsk Edge providing additional views, opinions and case studies to supplement the detailed economic analysis.
It forecasts that there will be further activities from private equity that will lead to further growth by mergers and acquisitions. Strategic consolidation will also accelerate, as many of the larger companies are not yet global players. Mergers between significant local players are likely.
Frans Boumans predicts: “For the next decade the industry will go through a phase of consolidation. We will see an increase in market share among the top players in the market.”
However, horizontal consolidation is not the only option examined in the report. Partnerships, open innovation, joint ventures, vertical integration and ‘spin-offs’ are all proposed as strategies for enhancing profitability by achieving added value (through increased innovation) and improved supply chain efficiency (leading to improved returns in the value chain). The report concludes that to date only lip service has been paid to these strategic options.
Greg Wood, managing director of Edge and one of the reports editors, explains “The market dynamics are coming together to create an environment where consolidation in these sectors is increasingly attractive, but increased focus on innovation, added value, and flexibility should also help to improve returns. There are genuine opportunities for those focusing on proactive relationships with their clients, on open innovations, on spin-offs and joint ventures, and on vertical integration.”
The report is available to interested parties free of charge, but circulation will be strictly limited.
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