Neil Farmer believes the European packaging industry needs an economic stimulus …
The European economy is going through a tough time at the moment, and the impacts on the packaging industry are being felt. The Bio-Based Industries Consortium (BIC) is tackling the issue head-on and Coca Cola is leading the way in the use of bio-plastics and recycled plastics. I recently returned from a trip to Italy where I visited operations in the north of the country. There is little doubt that the Italian economy is still in a fragile state, with high unemployment and negligible sign of economic growth. Deflation is currently a big concern. Things are worse economically in the south of the country where the recession appears to have a stronger grip. Generally the whole of the Euro-zone is unable to shake off the spectre of a continuing downturn. The possibility of quantitative easing to stimulate a recovery from a recession which has been going on for six years is now being debated in the corridors of power at the ECB. So what signs are there that things will eventually improve in Europe? Bioplastics in packaging to grow I have been undertaking work in the bioplastics sector in recent months and there are grounds for optimism that investment in new technologies could reap rewards.
A new European Joint Undertaking on Bio-based Industries (BBI) is certainly a step in the right direction. By this public-private partnership, Euros 3.7 billion will be injected in the European economy between 2014 and 2020 to stimulate the emerging bio-economy sector. Euros 2.7 billion will come from the Bio-Based Industries Consortium (BIC) and Euros 975 from the European Commission. The aims of the BBI are laudable including a move away from a fossil and imports–based society to increase Europe`s share of sustainable economic growth. The BBI plans to create new partnerships in many sectors including agriculture, agro-food, technology providers, forestry/pulp and paper, chemicals and energy. It is hoped thousands of jobs will be created by the initiative. It is also aiming to reduce greenhouse gas emissions by 50 per cent in comparison with fossil-based applications. European Bioplastics, in co-operation with the Institute for Bioplastics and Biocomposites at the University of Hannover, Germany, said in its annual survey that bioplastics production capacity will grow to 6.0 million tonnes by 2017. Not all of this, of course, will be for packaging but it is still considerable growth compared with the 1.4 million tonnes of bioplastics production capacity in 2012.
Coca-Cola Plant Bottle
Ever since the announcement was made by Coca-Cola in 2009 for its plant bottle, to be made initially from 22.5 per cent plant-based PET and 25 per cent from recycled PET, the developments by the company in the use of bio-plastics and recycled plastics have been seen as an important innovative trend. We have now had the news in September 2014 that the company has announced that it is making an additional investment in the development and commercialisation of Virent`s biobased paraxylene, BioForm PX. This investment will enable Virent to increase separation and purification of BioForm PX at its demonstration plant in Madison, Wisconsin, USA. What does this mean for the European industry? Well, as Scott Vitters, General Manager, Plant Bottle Innovation Platform at The Coca-Cola Company said at the time: “Virent has continuously delivered on its commitments and advanced its technology. That progress supports building additional capacity for Virent and advances us on the path to a full-scale commercial solution for our 100 per cent plant-based PET plastic packaging.” The growth of sales of PET bottles in countries such as Italy and the consequential decline of sales in glass packaging has certainly been a trend in the food and beverage sector. Developments by Coca-Cola and others in this market will certainly stimulate demand and help to quicken the pace of recovery in the Euro-zone. Coca-Cola has sold more than 15 billion plant bottles around the world and these recent announcements will further stimulate sales over the next five years.
Cost versus innovation
The European packaging industry might be experiencing tough times at the moment. However on my recent visit to Italy I certainly saw packs which had more innovative features than when I was there in 2013. It could just be that the “cost versus innovation” equation is starting to move in favour of innovation and we are witnessing the first green shoots of recovery for the European Packaging Market. If developments in the bioplastics sector are a bellwether, the corner could just have been turned