Visiongain http://www.marketresearch.com/Visiongain -v1531/ Publisher Sample Phone: 800.298.5699 (US) or +1.240.747.3093 or +1.240.747.3093 (Int'l) Hours: Monday - Thursday: 5:30am - 6:30pm EST Fridays: 5:30am - 5:30pm EST Email: customerservice@marketresearch.com MarketResearch.com Metal Packaging Market Report 2015-2025: Prospects for Leading Companies How will Metal Packaging Compete Against Plastic Given Rising Environmental Concerns? 4.4.2.2 Metal Packaging will retain its Market Share The main materials used to package beverages are metal, paper, glass, rigid plastic, flexible plastic and combination materials. Each of these materials has different characteristics in terms of quality, suitability, price and end use. Although facing the increasing competition from rigid plastic, which has seen increasing presence in the market as a preferable beverage packaging material, metal as a traditional beverage packaging material still maintain a considerable market share in the beverage packaging market thanks to its high barrier nature, recyclability, and the innovations in the metal beverage packaging market that cater for consumers’ demand for functional and convenient packaging. Both in the developing and developed regions, there has been increasing demand for the barrier and nutrient retaining propertied of beverage packaging, to ensure the safety and functional of beverage products. Consumers are more health conscious and more aware about the nutrient and function of beverages. The growing beverage demand in emerging economies is also adding unique elements to manufacturers’ marketing strategies, promoting the growth in metal beverage packaging. A general trend for increasing demand as a result of emerging market growth has been built upon by country-specific characteristics such as infrastructural challenges. On this note, the ability of metal to preserve its product has increased the material’s appeal in nations with a comparatively poor electricity infrastructure that hinders the ability of other packaging materials to keep products fresh. Metal has been around for 200 years, it is recognised as being robust, a solid food packaging solution. It is the heritage of metal and glass which is its strength; both have been around a long time and are familiar products. Depending on the application they can be luxury products – spirit bottles, or decorated embossed food cans, or commodity cans, jars and bottles. The recyclability of metal is another factor aiding its growth within the beverage packaging market, and will continue to cater for consumers and producers alike, who remain focused on sustainability, cost-reduction, and efficiency within the production process. Recycling has a very significant effect in terms of sustainability because the energy to produce the packaging material and an efficient recycling system dramatically reduces the activity or energy associated to produce the package. Metal is effectively a permanent material in that once it is recycled it can be transformed back again into the package. The supply of recycled metal material is very important as a modern blast furnace, 20% scrap metal is required to run it efficiently in the first place, the more scrap metal you have the better it is in terms of running a blast furnace. Thus a value stream is being created around this because this can be transformed into a number of metal applications including packaging, and thus we are seeing very high recycling rates associated with it, above 70% in some cases. This makes metal beverage packaging a very sustainable packaging solution and highly www.visiongain.com Page 66 Metal Packaging Market Report 2015-2025: Prospects for Leading Companies How will Metal Packaging Compete Against Plastic Given Rising Environmental Concerns? 5.5 German Metal Packaging Market 2015-2025 5.5.1 German Metal Packaging Market Forecast 2015-2025 Table 5.5 German Metal Packaging Market Forecast 2015-2025 ($billion, AGR %, CAGR %, Cumulative) 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2015-25 Sales $bn 5.9 AGR % 6.0 6.1 1.7 1.9 CAGR % 2015-20 6.2 6.3 6.5 1.8 1.8 1.7 6.6 6.7 6.8 7.0 7.1 7.2 1.8 2.1 2.2 1.8 1.8 1.7 2020-25 1.8 CAGR % 2015-25 72.6 1.9 1.9 Source: Visiongain 2015 Figure 5.17 German Metal Packaging Market Forecast 2015-2025 ($billion, AGR %) 8 5 7 Sales $bn 5 3 4 2 3 2 AGR % 4 6 1 1 0 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Year Sales $bn AGR % Source: Visiongain 2015 www.visiongain.com Page 101 Metal Packaging Market Report 2015-2025: Prospects for Leading Companies How will Metal Packaging Compete Against Plastic Given Rising Environmental Concerns? 7. Expert Opinion 7.1 The Can Makers Visiongain had the opportunity to communicate with the Can Makers about recent market trends. We would like to take this opportunity to thank them for their expert insights. Members of the Can Makers work together specifically to promote the benefits of the drinks can and aid communications between the industry and its customers: the brewers and soft drinks manufacturers and the retailers, as well as the packaging industry, the media and consumers. The Can Makers was the first organisation in Europe formed to promote drinks cans. It is now part of a European network set up under the auspices of Beverage Can Makers Europe (BCME), which includes similar organisations across Europe. More information about the organisation can be found at www.canmakers.co.uk. 7.1.1 What Trends are you Currently Observing in the Metal Packaging Market? Visiongain: What trends are you currently observing in the metal packaging market? The Can Makers: We can only speak for drinks cans, but we are seeing growth in volume and in market share. For brands, cans offer a unique opportunity for retail stand out on shelf, a strong pack which keeps drinks fresh, maintains integrity and much more. The can remains a pack of choice for consumers and we’re pleased to see more bars and restaurants adopt it within their packaging mix. 7.1.2 What are the Advantages and Disadvantages of Cans Comparing to Other Metal Packaging Products, and Other Packaging Products? How is the Beverage Can Market Responding to the Increasing Threats from Plastic Bottles? Visiongain: What are the advantages and disadvantages of cans comparing to other metal packaging products, and other packaging products? How is the beverage can market responding to the increasing threats from plastic bottles? www.visiongain.com Page 163 Metal Packaging Market Report 2015-2025: Prospects for Leading Companies How will Metal Packaging Compete Against Plastic Given Rising Environmental Concerns? 8.2.3 Ball Corporation Future Outlook: Packaging Segments Table 8.8 Ball Corporation Packaging Revenue Forecast 2015-2025 ($bn, AGR %, CAGR %, Cumulative) Sales $bn AGR % CAGR % 2015-20 CAGR % 2015-25 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2015-25 186.6 7.6 7.9 14.1 15.5 16.1 16.9 17.5 18.2 18.9 19.7 20.5 21.3 3.8 77.6 4.5 4.2 4.6 3.8 4.1 3.9 4.0 4.2 4.1 17.1 2020-25 4.1 10.4 Source: Visiongain 2015 25.0 90.0 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 Sales $bn 20.0 15.0 10.0 5.0 0.0 AGR % Figure 8.10 Ball Corporation Packaging Revenue Forecast 2015-2025 ($bn, AGR %) 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Year Sales $bn AGR % Source: Visiongain 2015 Visiongain estimates Ball Corporation to experience strong growth in its packaging revenue in the next decade. The CAGR between 2015 and 2025 will be approximately 10.4% without taking into account any unforeseeable factors such as M&A activities and discontinued operations. Visiongain estimates Ball Corporation’s packaging revenue for year 2015 to be $7.9 billion, before increasing significantly to $14.1 billion in 2016. The proposed acquisition of Rexam PLC will boost the packaging revenue of the company. The estimated closing time of the acquisition is in 2016, and this is the reason for the 77.5% increase visiongain expects to see from the company’s sales revenue in 2016. The acquisition is to create of unique global metal packaging manufacturer that enjoys a broader global plant network and www.visiongain.com Page 185 Metal Packaging Market Report 2015-2025: Prospects for Leading Companies How will Metal Packaging Compete Against Plastic Given Rising Environmental Concerns? Figure 8.12 Crown Holdings Revenue by Segment 2014 (% Total Revenue) Americas Beverage 9% 26% 13% North America Food European Beverage 9% 24% 19% European Food Asia Pacific Non-reportable Source: Crown Holdings 2015; visiongain 2015 Figure 8.13 Crown Holdings Revenue by Geographic Area 2014 (% Total Revenue) 28% 32% US and Canada Weatern Europe Developing Markets 40% Source: Crown Holdings 2015; visiongain 2015 Figure 8.14 Crown Holdings Revenue by Product 2014 (% Total Revenue) 13% Beverage Cans 34% 53% Food Cans & Closures Other Source: Crown Holdings 2015; visiongain 2015 www.visiongain.com Page 189 Metal Packaging Market Report 2015-2025: Prospects for Leading Companies How will Metal Packaging Compete Against Plastic Given Rising Environmental Concerns? Table 8.20 Toyo Seikan Group Packaging Products/ Services 2015 (Division, Product, Specification) Company Division Product/Services Specification Can Products include: TULC, aTULC, TEC2000, Draw Wall Ironing (DWI) Aluminium Can, Welded Can, Lid and Filling test equipment. PET Bottle A wide range of PET bottles, including PET bottle, aseptic PET bottle, hotfill PET bottle, pressure resistant PET bottle (CSD Beverages), pressure-heat resistant bottle and large capacity alcohol PET bottle. Can Including DRD Can, inside PET laminated DRD can, PC can, high quality design can, pascal can, dressy can and double safety end. Plastic Bottle Lamicon Bottle, Lamicon Tube, MultiBLOCK, etc. Cup Lamicon Cup, Hi-Retroflex, and Oxyguard Containers Pouch Retortable Pouch, ERP and Retortable spout pouch Plastic Bottles Miscellaneous blow bottle and gradation bottle Pouch Floss pouch and Moisture Guard, Aerosol Can Aerosol can, PL can, mountain cap and gas release cap Can 18 Litre Can: Large-square formed welded can Beverage Packaging Food Packaging Lifestyle & Household Products Industrial Use Can Source: Toyo Seikan Group 2015; Visiongain 2015 8.6.2 Toyo Seikan Group Analysis Toyo Seikan Group manufactures and sells metal, plastic, glass and paper packaging products mainly to the food and beverage industry. Its primary product sales come from metal packaging. Geographically, Toyo Seikan Group focuses on the Japanese market, with increasing interest in China and Thailand, and other emerging Asian nations. It is in competition with most international packaging companies who also operates in these geographical areas. Toyo Seikan may lack the economies of scale that other companies who specialise in a single material can exploit and may be uncompetitive if challenged on prices. www.visiongain.com Page 203