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February 28, 2005 01:00 AM

FPA studies trade, key market issues

Roger Renstrom
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    Leaders of the Flexible Packaging Association have retained research firm Strategic Analysis Inc. to conduct a market study on critical industry issues including the widening trade deficit.

    The impact of major retailers on packaging decisions is a key issue requiring analysis, Jimmy Love said at FPA's annual meeting, held Feb. 23-25 in Carlsbad. Love is the new chairman of Linthicum, Md.-based FPA and vice president and general manager at converter Printpack Inc. in Atlanta.

    Retailer global sourcing strategies, innovative trends in packaging and the impact of private labels rank high on the list for evaluation, Love said.

    Growing imports are a concern among FPA members. FPA said that during 2003, U.S. flexible packaging firms exported about $1 billion worth of goods and U.S. customers imported packaging worth $2 billion, according to data from the U.S. Census Bureau's foreign trade division.

    ``The [import] trend has not changed,'' George Thibeault Jr. said in a state-of-the-industry presentation. ``The gap widens and is projected to grow.'' Thibeault is outgoing FPA chairman and president of Hueck Foils LLC in Wall, N.J.

    He said producers in China, South Korea and India account for the bulk of foreign packaging entering the U.S. market, across most product segments.

    Material costs and availability of polyethylene and nylon constitute a major concern for FPA members. Converters are caught in the middle between large raw material suppliers and the market-squeezing major retailers, Thibeault said.

    The flexible packaging industry has grown over a decade at an annual rate of 3.9 percent ``despite the 2001 downturn,'' Thibeault said.

    Material purchases for domestic flexible packaging totaled $10.9 billion in 2003 with polymer resins accounting for 33 percent and film for 29 percent. Resin and film portions are increasing at the expense of other materials such as paper, Thibeault said.

    SAI of West Lawn, Pa., is scheduled to start the market study research Feb. 28 and present results at FPA's fall executive conference Oct. 26 in Chicago. A previous SAI study for FPA focused on the import issue and was completed last year.

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