East is East?

9 April 2008

The packaging industries in China, India and Eastern Europe have shown tremendous growth potential in the past decade or so.

For example, the Indian packaging market grew by around 9 per cent in 2004 and Pira International predicts growth of 14 per cent for the remainder of the decade. The same holds true for China. According to statistics released by Pira, at the end of 2003, China’s 38,000 packaging manufacturing plants employed more than three million people, and contributed 2 per cent to the country’s GDP. China is also the single largest importer of raw materials for packaging, and before the end of the decade its gross packaging product output is forecast to increase by around 80 per cent in value terms.

But these Asian economic giants now have to compete with the nations in Eastern Europe. The historic expansion of the EU in May 2004 added 10 new member states, eight of which were from Central and Eastern Europe. In January last year, two more Eastern European countries joined the EU. This has resulted in a strong economic power with which the ‘flying dragons’ and the ‘sleeping tigers’ must compete.

If you look at the economic growth statistics of this region, you will see why packaging industry suppliers turning east need not travel too far.

Whilst the EU reported a 3 per cent increase in its GDP last year, countries like Poland and the Czech Republic showed twice the EU growth, Slovakia and Lithuania were at 8 per cent, while Latvia and Estonia reported double digit increases.

The huge strides made by the Eastern European countries, is partially attributable to adoption of the specified economic, political, and legal laws of the EU. The member states also benefit from complete access to the market, since the EU is a free trade zone. Moreover, many of the East European countries also offer tax breaks and low interest loans to the investors.

All these factors, and the growing economic potential, together with the modern legal framework in the eastern bloc, have attracted billions in terms of direct foreign investment.

This issue of Converting Today analyzes the potential of the burgeoning Asian and Eastern European markets, and the competition between the two. It also discusses the promise held by the markets in South America and the Middle East.

We also look at a number of new machines that are lined up for drupa 2008. This is only the first of our drupa preview issues, and we will bring you many more industry developments and highlight other attractions in the next issue.

On the subject of new launches, we have introduced a couple of features in the magazine. In the future, we will be profiling individual converters and presenting industry viewpoints. To inject a tinge of humour, we have also introduced ‘Cartoon of the Month’ – which, in this issue, draws inspiration from the number of product launches expected during drupa 2008.

Hope you enjoy reading it!

Sonali Advani

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