The North American packaging industry is expanding, thanks to U.S. and Canadian economic growth, increased consumer confidence, strong cash positions by U.S.-based corporations and improved capacity utilization rates, according to officials at Pack Expo 2006.
The U.S. gross domestic product had moderate growth in 2006 and is expected to slow in 2007, but accelerate in 2008, according to the Packaging Machinery Manufacturers Institute. In Canada, the economy is expected to grow at an uneven pace through 2007 but be stronger in 2008.
``The growth in packaging machinery shipments is a reflection of consumer goods companies' efforts to significantly improve productivity,'' said Charles Yuska, president and chief executive officer of Arlington, Va.-based PMMI.
``Packaging machinery end users are replacing older machines with new models with more advanced technology and innovative designs to increase production speeds and reduce labor costs,'' Yuska said at the show, held Oct. 28 to Nov. 2 in Chicago.
``This is happening across the board, from domestic U.S. and Canadian industries to the export markets, and the growth has been strong,'' Yuska said.
Capacity utilization rates reached 80.7 percent for U.S. manufacturing this year as of July, an increase from 78.2 percent in 2005, according to PMMI. The food segment rose slightly to 83.9 percent compared with 2005's 82.4 percent, according to the group.
``The economic health of our industry is very strong,'' said Bob Risley, CEO of Materials Handling Systems Inc., based in Savage, Md.
PMMI measures the health of the packaging sector based on shipments of packaging machinery. Packaging machinery shipments in the U.S. reached $5.8 billion in 2005, an 8.1 percent increase from $5.3 billion in 2004, Risley said.
``It was the fourth consecutive year of growth, and the industry is expected to eclipse the $6 billion sales mark in the next year for the first time,'' Risley said.
For its annual ``Shipments and Outlook Study,'' PMMI tracks 17 machinery categories, 15 of which experienced growth in 2005. Several segments experienced double-digit growth, including machinery for bottling lines; filling liquid products; inspecting, detecting and check-weighing; and palletizing, de-palletizing and pallet unitizing.
According to PMMI, exports of U.S.-made packaging machinery increased nearly 2.8 percent to $1.1 billion vs. 2004. Domestic demand improved 7.6 percent, which includes domestic shipments and imports. Some $6.03 billion was consumed in the U.S. market.
Domestic shipments were up 9.2 percent to $4.6 billion. Imports into the U.S. rose 2.7 percent to $1.36 billion.
In the Canadian sector, packaging machinery shipments rose 3.2 percent to $375.2 million, with several growth segments, including machinery for conveying/feeding, palletizing, filling dry products and labeling.
Other factors are influencing the market, such as a continuing stream of new products, demand from packaging innovations and changes, and favorable market reception for the introduction of new North American-made machinery with advanced technology, PMMI said.
PMMI expects U.S. shipments of packaging machinery to grow at a cumulative annual rate of 2.8 percent over the next three years, reaching $6.26 billion by 2008. For Canada, PMMI forecasts an average annual growth rate of 2.2 percent.
Plastics industry officials at Pack Expo expressed optimism for market growth in several segments. At Silgan Holdings Inc.'s booth, officials talked about the growing single-serve market for beverage containers.
In the past three to four years, that market has taken off, according to Bill Thomas, technology commercialization director for Silgan White Cap Americas in Downers Grove, Ill. For instance, Silgan makes single-serve containers for Campbell Soup's V8 Fusion drink.
HuhtamÃ¤ki Americas showcased its Velocity-brand container for food and consumer-goods companies. The product is assembled using multiple flat polypropylene components, which are formed into a convolute container.
The firm touted the product's low tooling cost; parts handling also is reduced, and the time line to market is shorter.
The containers are made at HuhtamÃ¤ki Americas' headquarters plant in De Soto, Kan.
Sealed Air Corp. officials reported that produce packaging is a key growth market.
The Saddle Brook, N.J.-based company introduced its RD-45 shrink film with anti-fog properties that make it right for packaging refrigerated products such as vegetables.