In the bag

Related tags Packaging waste directive European union Uk

Austrian-based packaging giant the Frantschach Group has acquired a
sack production plant in Aberdeen, UK. The facility has been bought
from a subsidiary of the British Plaster Board (BPB), which has
operated the production plant under the name of Abertay Paper
Sacks.

The newly acquired plant in Scotland produces 85 million sacks with 130 employees, and has a turnover of approximately €38 million.

"With this acquisition in Aberdeen we are stepping into a strategically very important market in the UK to offer our clients an even better service,"​ said Frantschach chief executive Veit Sorger. "At the same time we are completing our presence in Europe with this purchase."

This deal underlines an upturn for the current trend in the UK packaging industry. For the last couple of years, the UK packaging industry has been adversely affected by the relative strength of the pound compared with the euro. According to analysts Research and Markets​, the industry has also been hit by waste packaging regulations, such as the EU Packaging and Packaging Waste Directive and the UK Climate Change Levy (CCL). This has led to a wave of consolidation in the industry and, as a result, a number of foreign players now own UK manufacturing capacity.

Nevertheless, there is a positive side to the downsizing of the UK industry. Paper and board remains the favourite packaging material and is valued as a popular medium in the fast-growing print-for-packaging sector. Despite competition from plastic, corrugated packaging is beginning to play to its strengths for dual-purpose transit packs, i.e. as a means of protecting goods in transit and for open display at the point of sale.

Supply-chain efficiencies are being developed, which is helping to cut the industry's costs, and a recycling infrastructure is well established. The industry has also shown - through the PapiNet and other initiatives - that it is willing to embrace the Internet and e-logistics.

However, the market analyst firm believes that the UK paper and board packaging market will continue to be at the mercy of increased raw material costs and, as long as the industry's manufacturers are competitively disadvantaged in terms of the sterling/euro exchange rate, more producers are likely to fall by the wayside in the period to 2006. A large amount of UK paper and board manufacturing capacity has now been brought under the control of foreign companies and these are likely to continue to play a role in satisfying UK domestic demand.

Research and Markets is one of Europe's largest market research bodies. R&M distribute thousands of major research publications from the world's leading publishers, consultants and market analysts. For additional information on this particular report, click here​.

Frantschach​ is a global producer of sackpaper and paper sacks. It represents 80 corporations in 40 countries. Apart from paper sackpaper and industrial sacks, Frantschach also manufactures barrier coating, release liner and flexible packaging products.

Related topics Processing & packaging

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