Tim Woods, managing director of IndustryEdge, knows that corrugated packaging is the powerhouse of Australasia’s paper industry. Here, he explains why.
Australia and New Zealand use the full array of fibre packaging options, from light-weight bags, through extensible, multi-layer sacks and cartonboard, all the way to heavy-weight corrugated boxes. Between the two countries, and at least for the time being, each of the major types of packaging is fully manufactured in the region.
But it is the corrugated box sector that provides the muscle for the entire regional pulp, paper and paper products sector. Demand for corrugated boxes and for container materials (paperboard substrates that can deliver corrugated boxes), is growing, both domestically within the region and internationally.
In the 2014 fiscal year, demand for container materials (Kraftliner, Corrugating Medium and Testliner) reached 1,029 kt, accounting for 77.0% of total demand for packaging and industrial papers. Accounting for just 9.8% of the total, coated cartonboard was a distant second.
Despite some recent challenges associated with softening Asian demand and slowing economic growth, exports of container materials have become a staple of the Australasian industry. All producers of Kraftliner in the region (Australian Paper, Carter Holt Harvey and Visy) have established export markets. The producers of Corrugating Medium and Testliner, including the same companies, also have strong export profiles.
Kraftliner, made entirely from virgin fibre, dominates total Australasian exports, accounting for 60.7% of the region’s container material exports. This is an important element and dynamic of the trade.
While not all of the success of the Australasian Container Materials sector can be attributed to it, the role of virgin fibre Kraftliner is pivotal, both domestically and internationally.
The strength properties of virgin material are important for several reasons. The long, strong softwood fibres, not yet broken down by repeated recycling, are vital to maintaining the integrity of corrugated boxes. In general, the ability of boxes to withstand crush pressures and cyclic humidity, is a key driver of Kraftliner use. That makes Kraftliner and virgin material ideally suited for end-uses that include heavier industrial goods and especially, chilled food products.
Research undertaken by IndustryEdge demonstrates that Kraftliner is usedwidely across the potential end-uses, but is dominant where goods move through several humidities, especially those found in refrigerated situations.
Prime examples in which virgin fibre is dominant are sectors like fresh fruit and vegetables and to a lesser extent, fresh meat. Domestically, chilled foods regularly move through three of four chilled zones. Passing through unchilled environments adds to the risk of humidity penetrating and weakening the box. This has become a key driver of Kraftliner use.
Frozen foods do tend to have less virgin Kraftliner used in their boxes, although higher value frozen foods, such as export meat, are often in virgin fibre boxes for added product protection. In general, frozen foods, along with solid materials like cans and bottles, are self-supporting, at least when frozen. Boxes play a different role in that context and on average, less of the higher value Kraftliner is used.
The success and growth of these end-user sectors in both Australia and New Zealand is in part demonstrated by the use of virgin fibre container materials over the last decade.
Experts from IndustryEdge and leading international speakers will address these and other issues at the 2015 Australasian Paper Markets Outlook Forum, to be held in Melbourne on 27 and 28 May.
