E ropean and Global MarketsEuropean and Global Markets for Flexible Packagingg g

Jan HomanFPE Chairman

Annual Conference 2011, Florida

ContentContent

• FPEFPE

• Flexible Packaging Markets

• Issues: Food Contact & Sustainability

• Invitation

FPE in figuresFPE in figures

Revenue: $11 billion (= 75% of total European flexible packagingEuropean flexible packaging

= $ 15 billion)

Members: 50+ companies

7 national associations

Extract of FPE membership:

Countries with EAFA/FPE members

… and many more in Western, Central and Eastern Europe(see more at www.flexpack-europe.org)

FPE MembershipFPE Membership• AB TEFCO• Alfa Beta• AL INVEST Bridlicna

• ISPAK• Leeb Flexibles• Leipa

Associated Members:

Companies:• Amcor Flexibles• Ampac Flexibles • Aluberg• Aluflexpack• Alu-Vertriebsstelle

A ifl

p• Maria Soell• Mondi Packaging• Multifoil • Nordenia International • Novelis

li l i ti

p• Elopak• SIG Combibloc• Tetra Pak

National Flexible Packaging Asscociations:EFE (S i )• Ariflex

• ASAS• BAK Ambalaj• Beucke & Söhne• Carcano Antonio• Cellografica Gerosa

• online laminating• PAWAG Verpackungen• Perlen Converting • Pliant• ppg Noltemeyer • Printpack

• EFE (Spain)• ELIPSO (France)• FASD Turkish Flexible Packaging• GDA FV Flexible Verbundstoffe (Germany)• GIFLEX - Grupo Imballaggio Flessibile (Italy)• IGVF (Switzlerland)Cellografica Gerosa

• Cellpack Packaging• Clondalkin• Constantia Flexibles• Danapak• Enteco Pharma

Printpack• Reuther Verpackung• SAFTA• Schmid Folien• SEDA• Südpack Verpackungen

IGVF (Switzlerland)• PAFA (United Kingdom)

• Frith’s Flexible Packaging• Gascogne Laminates• Goglio• Hatzopoulos• Huhtamaki

H d Al i i

• Symetal• TEKO• UC Rusal• Uniprint Knaur• Wipak Walsrode

Wi f• Hydro Aluminium • Wipf

FPE ObjectivesFPE Objectives

Compliance

Market Analysis Sustainability

Food Contact&

Environmental Issues

International Relations yIssues

Management RatioManagement Ratio

Year 2009 % of SALESMaterial costs 56 83Material costs 56,83

Direct labour costs 12,35

Production overheads 9,31

Marketing & Distribution 5,30g ,

Research & Development 0,98

Administration costs 5,00

Interest 2,69

Depreciation 4,28

Pre-tax profit 3,26

% of ASSETSPre-tax profit 1,90

Sales 183,80

TURNOVER per EMPLOYEE (in €) 224.200

Participants of 2009 survey represent 3.0 billion € turnover

Cylinder and Printing Plate Costsy g

(in %) 2009

Cylinder / printing plate costs in % of sales turnover 3.3

Reinvoicing of customers (weighed average)

cylinder 84

printing plates 76

FPE Flash (Jan 2011)FPE Flash (Jan 2011)

Capacity utilisation + 1.15

Current situation (last 3 months compared to same period last year)

Sales volume + 1.24

Order intake + 1.22

Raw material prices + 1.25

Profit + 0.54

Short term prospects (next 3 months)

Sales volume + 0.71

Raw material prices + 1.06

Profit - 0.23

Medium term prospects (next 6 to 12 months)

C i ili i 0 48Capacity utilisation + 0.48

Interpretation of results [-0.1 ; 0.1] ---> satisfactory / stable[-1.1 ; -2] ---> weak / strong decrease [1 ; 0.1] ---> good / increase[-0.1 ; -1] ---> fair / decrease [2 ; 1.1] ---> very good / strong increase

FPE NetworkFPE Network

FPA(USA)

CFPGDA FV

Flex (Germany)PFFCA

(India)

CFP(China)

new contact

Elipso(France)

EFEFASD(Turkey)

contact

IGFV(Switzerland)

GIFLEX(Italy)

PAFA(UK)

EFE(Spain)

(Turkey)

membership cooperation

India: PackTech 2010India: PackTech 2010

• FPE Presentation at Bombay conference / exhibtion Nov 2010 on ‚Flexible Packaging in the Sustainability Debate‘

• Invitation and financed by exhibition company ‚Messe Duesseldorf‘• Opportunity used to establish contacts with PFFCA Paper, Film &

Foil Converters‘ Association, India• About 600 flex pack companies of which approx 75% are members• About 600 flex pack companies of which approx. 75% are members

of PFFCA

• Production about 600,000 t (without mono layer films)

• Turnover total flexible packaging industry incl. small businesses: about 2.7 bln US$

ContentContent

• FPEFPE

• Flexible Packaging Markets

• Issues: Food Contact & Sustainability

• Invitation

World Flexible Packaging Marketo d e b e ac ag g a et

Middle East / Africa

The Americas 1)

Europe 3)

%

5%

38%26%

Asia 2)31%

World Flexible Packaging Market = US$ 65.0 billion1) thereof 7% Central & South America1) thereof 7% Central & South America 2) thereof 9% South East Asia & Oceania 3) thereof 3% Eastern Europe

Top 10 Flexible Packaging Converters U S & Europe 2009 / 2010U.S. & Europe 2009 / 2010

U.S.• Bemis

Europe• Amcor (incl Alcan)Bemis

• Sealed Air • Berry Plastics (incl. Pliant)• Printpack

Amcor (incl. Alcan)• Constantia • Sealed Air Cryovac• Clondalkin Group• Printpack

• Sigma Plastics Group• Exopack

Hilex

• Clondalkin Group• WIPAK• Mondi Packaging

H htamaki• Hilex• Packaging Dynamics• Pregis (incl. Pactiv)

S

• Huhtamaki• Bemis• Südpack

• Sonoco

Accounts for 50% of Industry

• Nordenia

Accounts for 55% of IndustryTotal Industry * = $26.4 Billion Total Industry * = $14.0 Billion

* different definitions, US incl. retail & trash bags, shrink & stretch films, …

Acquisitions & Concentration in Europe *in Europe

Amcor Flexibles Alcan PackagingOne Equity Partners Constantia Packaging

Ampac Flexibles Floeter (Germany)Ampac Flexibles Floeter (Germany)

Berry Plastics Pliant (Germany)

Brodart Breger Emballage (France)

Constantia Flexibles Tobepal (Spain)

Emsur Saymopack (Spain)

Flextrus Flexmed & Flexopac (Sweden)Flextrus Flexmed & Flexopac (Sweden)

Korozo Saf Plastik (Turkey)

Plastienvase (Spain) Arras (France)

* extract of recent activities

Exopack Reuther (Germany)

European Flexible Packaging M k t 2009Market 2009

Region 2008 € Millions 2009 € Millions% Change

2008 to 2009

Western Europe €9,157 €8,799 -4.0%

Central & Eastern Europe €1,576 €1,616 +2.5%

TOTAL EUROPE €10,733 €10,405 -3.1%

Source: PCI Films Consulting Ltd / Industry estimates

European Converted Flexible Packaging Market 2009 by End useMarket 2009 by End-use

Total = 44.2 billion M²

Source: PCI Films Consulting Ltd / Industry Sources

European Converted Flexible Packaging Market 2009

P d ti d T dProduction and Trade

€ million 2008 2009 % Change

Production € 11 442 € 11 116 -2 8%€ 11,442 € 11,116 2.8%

Exports to non-European destinations € 909 € 887 -2.4%

Imports from outside theImports from outside the European region € 200 € 176 -12.0%

EUROPEAN CONSUMPTION € 10,733 € 10,405 -3.1%EUROPEAN CONSUMPTION € 10,733 € 10,405 3.1%

Source: PCI Films Consulting Ltd / Industry Sources

European Flexible Packaging Regional Consumption Forecasts 2009 - 2014Consumption Forecasts 2009 2014

Region / Country 2009 € Millions 2014 € Millions

Average Annual % Change 2009-2014

Western Europe 8,789 9,740 1.6%

C t l dCentral andEastern Europe 1,616 2,164 6.1%

TOTAL EUROPE 10,405 11,904 2.4%, ,

Source: PCI Films Consulting Ltd / Industry Sources

European Flexible Packaging Market ProspectsMarket Prospects

• European flexible packaging demand recovered p p g gstrongly in 2010, increasing by 4 – 5% in value

• value growth through to 2015: 2-3% p a for Europe• value growth through to 2015: 2-3% p.a. for Europe

• Growth expected in Eastern Europe + Turkey > W t EWestern Europe

• Demand in Russia to grow by 8% p a +Demand in Russia to grow by 8% p.a.+

Source: PCI Films Consulting Ltd / Industry estimates

ContentContent

• FPEFPE

• Flexible Packaging Markets

• Issues: Food Contact & Sustainability

• Invitation

Food Contact Issues “blowing up”

• Recasting of Plastics Directives (PIM)– Consolidation of existing European food contact legislation in one document

g p

• Swiss and German Ordinance on printing inks– Risk that certain printing inks will be forbidden in these countries due to faulty positive lists

• Requirements of customers going beyond legislation– Despite existing European legislation on certain substances customers ask packaging suppliers

for adherence to stricter limits or even complete phase outfor adherence to stricter limits or even complete phase out• IFS (International Food Standard) guideline revision

– Major improvements could be reached for more realistic requirements of retailers towards fillers/packaging producers

• Revision of the Council of Europe Guideline on Metals– Several uncoated and coated aluminium applications threatened by strict specific release limit

• Functional barrier project – Good tool to advise customers on appropriate barrier to be used for a certain packaging

application• FACETFACET

– EU financed project to create a tool to calculate consumers’ real exposure to substances

Requirements of EU, national legislators d t il ti l i iand retailers continuously increasing

FPE Newslettert i f d t t d t ilcontains food contact details

Available atwww.flexpack-europe.org

Sustainability IssuesSustainability Issues

P iti fl ibl k i ffi i t• Position flexible packaging as resource efficientin the sustainability debate

• Monitor activities around food and packaging, in particular on LCA and sustainability indicatorsparticular on LCA and sustainability indicators

• Improve knowledge on recovery and recyclingImprove knowledge on recovery and recycling of flexible packaging (pre- and post consumer)

Responsible Sourcing of R M t i l N T dRaw Materials as New Trend

FSC = Forest Stewardship Council: S S pPaper from certified forestry

The ‘More is Less’ VisionThe More is Less Vision• More preservation (through the absolute barrier effect) means a long shelf-life at room

temperature and less use of energy for transportation and storagetemperature and less use of energy for transportation and storage

• More barrier effect means less loss of the nutritional

and health benefits of food

• More barrier efficiency and capability means less use

of packaging material

• More convenience (through portability and portioning)

means less food wastage

• More recycling means less use of virgin resources

Flexible packaging version of thought p g g gleadership paper to follow (summer 2011)

ContentContent

• FPEFPE

• Flexible Packaging Markets

• Issues: Food Contact & Sustainability

• Invitation

Open InvitationOpen Invitation

forUS FPA memberstoto interpackEAFA/FPE boothDuesseldorf, Germany, yMay 12-18, 2011 Hall 11, A 37

Open InvitationOpen Invitation

forBill Burke, Chairman

Marla Donohue PresidentMarla Donohue, Presidentto join

FPE Autumn ConferenceNice, France,

November 17/18, 2011

www.flexpack-europe.org