The cosmetics packaging industry seems to have taken big steps toward recovery from the global recession and returned this year to its historical growth, but with a twist: This time it's being led in part by consumers in emerging markets in Asia, South America and elsewhere.
New consumers in China, India and Brazil are starting to take a place alongside those in North America and Europe. Perhaps that is no surprise. But the fast pace in emerging markets has clearly caught the attention of executives among cosmetics packaging firms, according to executives interviewed at the CosmoProf Asia show, Nov. 10-12 in Hong Kong.
In large numbers, about two-thirds of the overall market growth in cosmetics will come from emerging markets in the next five years, said Rick Schofield, president of compression and injection molder Portola Tech International in Cumberland, R.I.
We are a major supplier to the luxury skin-care market in Europe and the United States, he said. Those markets are not going to grow as quickly as the Asian markets.
Schofield said the company is opening a new factory in South China and doubled capacity in its Czech Republic plant in early 2010, as part of a $5 million realignment.
As well, Yutaka Matsui, executive vice president of Inoac Packaging Group Inc., a Bardstown, Ky.-based unit of Japan's Inoac Group, said he was surprised by the demand coming from emerging markets, particularly China.
About 80 percent of overall emerging market growth is coming from China, where demand is rising for both higher-quality cosmetics and packaging, including from domestic Chinese companies, he said.
In China, many people say around 10 percent of the country can buy these products that's already bigger than the Japanese market, Matsui said.
The company is readying plans to expand its plastic packaging operations in China and Mexico, but is trying to determine if the increases would be self-sustaining before committing.
He admitted he was surprised by Inoac's more than 25 percent sales growth in 2010, from new business with some major global brands like Estée Lauder and from emerging markets.
Globally we are very busy, very, very busy, Matsui said in a CosmoProf interview.
A small Italian maker of cosmetics packaging also said the attention of the cosmetics industry is on emerging markets.
Bruno Boccardo, business development manager with Brivaplast srl, based in Osnago, Italy, said that before 2008, the cosmetics packaging industry grew around 4 percent a year, but in the financial crisis, that dropped to about 2 percent globally.
Now, he estimates it's back at a 4 percent pace globally, but driven by emerging BRIC economies Brazil, Russia, India and China with their own growth of about 8 or 9 percent, while traditional markets are closer to 2.5 percent.
The focus is now on Asia, said Boccardo. Brivaplast, with 150 employees, also has a factory in China.