The plastic packing bag requirement is increasing in China and Europe this year. Howevery, Flexible Packaging Europe member companies, representing about 80% of the European turnover, have expressed concerns about the current raw material supply situation, during their recent collective meeting in Croatia.
More than 30 declarations by the leading polymer suppliers in Europe, coming in a short time frame, has led to significant shortages in the supply which resulted in only about 80% capacity being available, depending on the species of the poly. The effect on plastic bag converters means they will have difficulties in supplying finished products to meet their customers order requirements, particularly in the food and beverage packing sectors.
FPE members had to deal with increased problems in their production schedules because of the insufficient raw material supply. They have reported sudden cancellations of agreed deliveries followed by offers with the same volumes but with more expensive prices.
The small and medium sized manufacturers of flexible packaging are specially suffering from this situation. But even the multinational companies are facing difficulties. Some members also reported rumours of suppliers holding on to stocks of virgin polyethylene materials.
Stefan Glimm, CEO of FPE commented on the recent developments: “The unfortunate situation of so many force majeure declarations in such a short period is either the test or use of market power. Or it clearly shows the strong need for continuous investment in and maintenance of the ageing European polymer production facilities.”
“The high profits reported should enable the polymer suppliers to invest in their capacities to avoid
such technical problems in the future. The growing flexible packaging market in Europe should be
maintained with a healthy supply chain to ensure future market growth,” he added.