The business of packaging...a global perspective

“By 2050, according to a PIRA report, China will be the world's largest economy. India and the U.S. will be tied for second.”

Pw 9150 T Schneider

As packaging professionals caught up in the day-to-day technical aspects of our jobs, we often lose sight of the fact that packaging is a very big business. It exceeds $US500 billion annually, world-wide. It's about competition and opportunity on a global basis.

China is certainly among the Top 5 “big things” happening in packaging.

I recently represented the Institute of Packaging Professionals in Beijing at the World Packaging Organization's (WPO) annual meeting. Shi Wanpeng, President of China Packaging Federation (CPF), spoke about a 5-year plan for packaging. CPF is a government agency and an integral part of China's central planning process. Mr. Shi's words count. He emphasized five areas for concentrated effort:

1. “Strengthen the capacity of independent innovation and improve the technical level of [packaging].”

2. “…speed the restructuring of packaging industry…to realize the modern industrial management pattern.”

3. “…develop the industry of green packaging.”

4. “Improve the legal framework of packaging and bring the packaging industry into the orbit of legal system building.”

5. “Speed up the cultivation of high-tech [packaging] personnel.”

 

Should we be apprehensive about China's power in the short term? Definitely. Should we worry about their power in the long term? Probably not. Things have a way of evening out, long-term. Should we respect and meet their strengths now? Absolutely. China's power in all things packaging will grow, with or without us.

So what about India, that other Asian powerhouse? By 2050, according to a PIRA report, China will be the world's largest economy. India and the U.S. will be tied for second.

Given the growth in retailing and prepared foods in India, per capita packaging use will skyrocket. According to Rajiv Dahr, President of the Indian Institute of Packaging, processed food consumption should triple in ten years. During the 2006-2007 period alone, 300 malls and shopping centers will be built in India. This is just the beginning of a new level of service for a population that is almost 1.1 billion and growing.

Asians say that the 21st century will be their century. But don't underestimate sub-Saharan Africa's potential. With a rapidly growing population well in excess of 650 million, Africa's inhabitants could be 1 billion by 2020.

The initial challenges are extreme poverty, disease, and corruption too. Jacky Charbonneau, Senior Advisor on Export Packaging for ITC (International Trade Centre), notes that “most governments don't have any industrial policy for packaging.” But he hastens to add, “By contrast, the stability of some countries in the region (Ghana, Senegal, as well as Tanzania, for example) permits the development of organized packaging supply chains.”

In some African countries, packaging is pushing to the forefront. The Institute of Packaging Ghana (IoPG), led by their capable president, Kofi Essuman, is busy supporting packaging education. Ghana is a stable country and could be a strategic partner for American enterprise.

ITC and the WPO have been instrumental in creating the Institute of Packaging Nigeria (IoPN). As a kick-off for IoPN, there was a conference in February 2006 in Lagos, Nigeria. Attendance was 55 people. But 450 were turned away due to lack of facilities and materials!

So is it unrealistic to suggest that Africa may be the Next Big Thing? Consider these facts:

Our Indian colleagues have made it clear that foreign investment in packaging machinery and materials will be limited. For example, American and European machinery and materials will be welcome only if they cannot be produced in India. China has taken a similar position.

Will it be that way in Africa? Probably, but U.S. companies with long-range vision (and a dash of courage) can find success in places like Ghana, Senegal, and Tanzania, for starters

The Indians, Chinese, and western Europeans are already active there. So now is the time to begin building relationships with African colleagues. Think low-tech packaging machinery to meet basic needs. Think ‘simple' value-added packaging based on raw materials available locally. Think food hygiene and safety as basic requirements. Find local entrepreneurs and small companies with a track record who are willing to become trading partners.

The “trains” in China and India have already left their stations. The African train has not yet hitched up all its cars.

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