According to the GemPSI Industry Barometer 2021, the German paper sack industry ended the 2020 financial year with a seven per cent increase in paper sack deliveries compared to the previous year. It rates the outlook for the current year as „good“ despite the ongoing pandemic.
The reasons cited include delivery capability and adherence to delivery dates as well as the consistently high quality of the packaging solutions. This is a result of the current industry barometer of the Gemeinschaft Papiersackindustrie e.V. (GemPSI). In addition to a review and outlook, the report provides information on market trends and sentiment in the industry. This issue focuses on the paper sack market for building materials.
The German Paper sack industry closed the 2020 financial year with growth: from January to December, it delivered seven per cent more paper bags than in the previous year. The largest increases were recorded in the cement (+16.5 per cent) and building materials (+15.1 per cent) market segments. The food segment excluding milk powder remained unchanged.
The leader of the declining segments is packaging for chemical products with only -5.6 per cent. GemPSI members rated their business situation slightly better than in the previous year, with a score of 2.16 points on a scale of 1 to 5.
Industry barometer 2021 sees sustainable packaging as a trend
According to the GemPSI members, the increased demand is primarily due to to the strong construction sector and a boom in the do-it-yourself (DIY) segment - presumably caused by the lockdown situation - last year. They also recognise a connection between the slump in the chemical and food sectors and the pandemic. This is because the volume of orders for restaurants, large canteens and kitchens fell due to widespread closures.
Also in the Sustainable packaging was the trend. Paper sacks made from brown sack paper and material reductions while maintaining the same performance were the focus of paper sack customers.
Safely through the pandemic
Thanks to the early introduction of numerous safety measures at the beginning of the pandemic, German paper sack manufacturers were able to maintain production and supply chains and provide their customers with maximum security of supply. The measures will be maintained for the time being in 2021 and accept additional time and costs for this.
Many customers built up adequate safety stocks at the beginning of the first lockdown to counteract any supply bottlenecks. By the end of the first quarter of 2021, however, a development is emerging that is reminiscent of last year's hoarding of pasta and toilet paper.
„As a result, there is a risk of a paper bag shortage, even though there would actually be enough for everyone. We would like to appeal to the common sense of our customers to build up stocks over a longer period of one to two years. This will reduce capacity bottlenecks and the associated price trends.“ Alfred Rockenfeller, GemPSI Chairman
Into 2021 with optimism
Despite the ongoing uncertainties caused by the pandemic, industry representatives are optimistic about the current financial year. Two thirds expect the trend to remain the same, while one third anticipate growth. This is most likely to be the case for building materials (excluding cement) and seeds.
Thanks to their delivery capability and adherence to delivery dates, the consistently high quality of their packaging solutions, their innovative strength and consulting expertise, GemPSI members feel that they can rely on the company. Ideally positioned on the packaging market. In addition to a high level of technical expertise, they offer their customers environmentally friendly and high-performance packaging solutions that are individually tailored to their requirements and comply with current legislation.
GemPSI members therefore rate their general business prospects quite positively with a value of 2.3. The sales, more than 80 per cent expect stable development, The remaining respondents expect an increase. The major challenges include cost fluctuations in the area of raw materials. For example, paper sack manufacturers are currently facing sharp increases and Supply bottlenecks in the procurement of paper and PE film confronted.
Developments in the paper sack market for building materials
With a market share of 55 per cent, the paper sack market for building materials, including cement, is one of the largest in the German paper sack industry. As building materials are becoming more and more similar in terms of quality and application, it is important for manufacturers to have a Differentiation via the functions of the packaging increasingly important. According to GemPSI members, they attach particular importance to dust-free, storage life, moisture protection, easy handling, filling speed and recyclability. In addition, they are increasingly asking for smaller packaging units than the usual 25 kg containers.
DIY market driving the sustainability trend for building material bags
Sustainability aspects are also gaining in importance in this segment: in addition to the recyclability of packaging, building material manufacturers are increasingly interested in Solutions that work with recycled raw materials and bio-based barriers are produced. According to GemPSI members, this development is being driven by the DIY markets. Their customers are keen to use packaging made from renewable and recycled raw materials that can be easily recycled.
Against the backdrop of EU climate policy, the GemPSI members assume that the sustainability of building material packaging even more important in the future and with topics such as CO2-neutrality and closed material cycles. Due to the increasing complexity and lack of standards for assessing the sustainability of packaging, they expect a higher volume of consultation in future. With innovative and high-performance products, paper sack manufacturers want to maintain their sales at a high level in the long term and support their customers in achieving their climate targets.
The content of the industry barometer was compiled using a questionnaire and desk research based on relevant third-party publications. The entire Industry barometer is available for download.
[infotext icon]The Community paper sack industry e. V. (GemPSI) is the German trade association for manufacturers of paper sacks and as such is a member of the „Wirtschaftsverbände Papierverarbeitung e. V.“ (WPV). GemPSI supports its members in particular with business and technical issues. In addition, it represents the common professional interests vis-à-vis ministries, authorities and other associations[/infotext].Source: Gemeinschaft Papiersackindustrie e.V.
