Neil Farmer offers a world view of metal packaging…
Recently I have been able to view first-hand the fascinating operations of world renowned institutions and businesses with differing significance but both of great relevance to our industry.
One of these august bodies was the London Metal Exchange, the world centre for trading of industrial metals. More than 80% of all non-ferous metal futures business is transacted on the LME`s platforms. The statistics are quite staggering; annual trading of $14.5 trillion notional, 3.7 billion tonnes traded, in 159.7 million lots. LME`s non-ferous metals trade 40 times would production.
Shortly after I was part of a Packaging Society visit to the Crown Technology Technical Centre at Wantage, which was equally impressive. Crown is the largest metal packaging producer in the world, with 100 billion cans and closures produced annually. The company has global sales of $9billion, with 140 plants and 21,900 employees. Wantage is a major centre of the Group`s R&D and innovation. It was a wonderful experience to see the facilities and learn more about the skills of those who run this impressive operation.
The global market for metal cans was valued at almost $43.8 billion in 2012 and is expected to reach $51.6billion in 2019, according to Transparency Market Research. Beverage cans are, of course, the largest sector, with over 75% of global metal can consumption.
Innovations in Metal Packaging
And it is metal cans where some added value innovations are occurring. For example Rexam Beverage Can unveiled its photochromic ink and thermochromic printed can ends innovations last autumn. The ends change colour based on temperature, indicating when the product is ready for consumption and are a first in the industry for can ends.
Ball Packaging Europe displayed its “magic straw can” at the Drinktec Exhibition, in Munich last year, targeted at children and young adults. Designed to give a “wow” factor, the straw pops up out of the can when first opened and has great marketing potential for brand logos and other promotions.
Several metal can producers are now able to provide up to 24 designs of the same label per production run, with the potential for logos, graphics and individual messages.
All this says to me that the metal packaging industry is alive to the challenges and opportunities faced by new consumer technologies and innovations.
Notwithstanding these developments, it is a fact that low-margin metal packaging sectors, such as canned vegetables and processed foods will lose out in coming years to newer plastic technologies. However, beverage cans will continue to thrive due to long shelf life, efficient production methods and continuing investment. Advanced decorative and shaping techniques, coating technology and digital print will fuel growth.
Growth in Emerging Markets
And then we have the opportunities presented by emerging markets. Crown Holdings has recently announced the official opening and commercialisation of three of its Chinese facilities in Guangdong province, Sichuan province and Fujian province. Demand continues to increase in China for the beverage can.
In South America Rexam has expanded in a big way, with Brazil a particular target. New plants such as the beverage can operation in Greater Belem, in the north of the country, commenced production in 2013.Doubtless the forthcoming World Cup and the Olympic Games in 2016 will stimulate further demand.
There has been much talk recently about the foundations of the emerging BRIC economies wobbling. Whilst recent problems are difficult to ignore, countries like Brazil and China are dynamic progressive economies, which in their own way will continue to drive global economic and consumer packaging expansion.
It is not just in Brazil either where economic growth is to be found. I was in South America recently and saw the opportunities presented in countries such as Chile. Here consumer demand will grow rapidly stimulating demand for beverage cans.
The Future of Metal Packaging
Metal packaging has a lot going for it. Metal can recycling rates in Europe are excellent. Germany has already achieved 80% can recycling and generally a European target of 75% by 2015 should well be within the industry`s capabilities. In the US industry recycling of aluminium beverage containers has continued its upward trend with a rate of 67% in 2012, according to the Aluminium Association, Can Manufacturers Institute and the Institute of Scrap Recycling Industries.
The metal packaging industry, as my experiences in the last year have shown, is part of a truly global market facing up to the challenges of a changing world. The omens for it are bright.