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Paper sack industry stable despite crises

Despite the ongoing challenges, the German paper sack industry delivered 3.3 per cent more paper sacks in 2021 than in the previous year. 

The German paper sack industry continues to face challenges such as the tense supply situation, the effects of the pandemic and the war in Ukraine. Nevertheless, 3.3 per cent more paper sacks were delivered in 2021 than in the previous year. 

The German paper sack industry has made a good start to the current year and has benefited from January to March 2022 saw a 4.8 per cent increase in demand for paper bags compared to the previous year. The focus of this year's industry report from Gemeinschaft Papiersackindustrie e.V. (GemPSI) are Paper sacks for food and animal feed, which represent the third-largest market segment in the German paper sack industry. make up.

With an increase of 3.3 per cent in the number of bags delivered compared to the previous year, the German paper sack industry remains in second place in Europe in 2021. It recorded growth of 11.8 per cent in its second-largest market segment, chemicals, and 2 per cent in building materials (excluding cement). There was also moderate growth in paper sacks for animal feed (3.3 per cent) and food excluding milk powder (2.1 per cent).

Sustainable solutions still in demand

A lack of paper supplies, sharp price increases for raw and auxiliary materials and a significant shortage of staff due to illness and quarantine cases - last year, the members of GemPSI were able to prove that they knew how to deal with the effects of the coronavirus pandemic with confidence. They were able to withstand the poor supply situation Close coordination with customers and suppliers as well as forward-looking planning against this. The shift cancellations caused by the pandemic were largely offset by the commitment of healthy employees and extra shifts.

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The industry representatives state that the The desire for sustainable packaging has gained further momentum among customers. In addition to brown sack paper and material reductions, the recyclability of packaging has become increasingly important for paper sack customers. GemPSI introduced the established REPASACK take-back system for recycling kraft paper sacks 30 years ago, through which more than 20,000 tonnes of kraft paper sacks from industry and commerce are recycled every year.

Tense starting position

The representatives surveyed stated that the Availability of operating and auxiliary materials has deteriorated further since the beginning of the war. Among other things, the industry is affected by the import ban on kraft paper from Russia. In particular, the supply of sack kraft paper and freight was insufficient. The situation was only slightly better for packaging materials and plastic films. Delivery times are unpredictably long due to insufficient freight space and prices for materials, energy and gas continue to rise.

According to the GemPSI members delivery dates and prices are not bindingly confirmed upon acceptance of the order. In order to ensure the highest possible security of supply, they are making long-term, forward-looking agreements in close consultation with customers. Despite the circumstances, the German paper sack industry was able to meet a 4.8 per cent increase in demand in the first quarter compared to the previous year.

Rising demand for milk powder bags

This results in an assessment of the business outlook for 2022 as satisfactory with a tendency towards good (2.7 points). The German Paper sack industry sees itself well positioned in the market (1.7 points), as the paper sack is an environmentally friendly, easy-to-handle packaging with reliable product and hygiene protection. The majority of members expect rising sales and stable development in the individual customer segments. However, they anticipate further pandemic-related shift cancellations in the coming autumn.

"Our aim is to continue to act flexibly and develop pragmatic solutions together with all stakeholders to ensure a timely supply of paper bags in line with demand"

Alfred Rockenfeller, Chairman of GemPSI

Paper sacks for food, including milk powder, are the third largest market segment of the German paper sack industry. In 2021, around 118 million paper sacks for food were delivered across Germany. In the first quarter of 2022, demand for paper sacks for food (excluding milk powder) remained at the previous year's level (0.4 per cent), while it rose significantly for milk powder sacks (30.2 per cent). The majority of respondents expect a stable trend in the coming half of the year. A There was also year-on-year growth in paper bags for animal feed in 2021. A total of 58 million paper bags were delivered, meaning that the segment accounted for seven per cent of the German market. Here, too, the positive trend continued in the first quarter of 2022: Compared to the same period last year, 3 per cent more sacks were delivered. 

Requirements for paper bags

Due to the high demands placed on paper sacks by food and animal feed producers, as well as increasing legal requirements, manufacturers are constantly working on optimisations. According to the respondents, these segments are therefore increasingly taking on a pioneering role in the industry, as the innovations bring advantages for other markets. The most important factors for customers are Good hygiene protection, ensuring food safety and traceability. When choosing packaging, they also attach particular importance to purpose-specific barrier layers (2.3), purity of type (2.7) and freedom from dust (2.8).7 In future, GemPSI members expect further increases in requirements and certifications, which could create good growth opportunities for the segments over the next five to ten years.

"We offer a comprehensive range of hygienic packaging with a high level of product protection. With excellent service and information about our service portfolio, we see good opportunities to inspire our customers in the long term."

Alfred Rockenfeller

Source: GemPSI

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