German plastic packaging sector braced for raw material hikes - but stays positive
But economic sentiment with the sector remains “cautiously optimistic” a spokeswoman from Industrievereinigung Kunststoffverpackungen (IK) told FoodProductionDaily.com.
Price spiral
Ulf Kelterborn, IK managing director, said the results from its most recent Economic Trend poll found that the “cost spiral will continue to increase” in 2012.
Plastic packaging producers were therefore bracing themselves for a fall in profits, with the body advising the market to “react to this situation as quickly as possible”.
Rising overheads and a cut in profits are often precursors for price increases as producers seek to pass on costs down the supply chain.
Guarded optimism
The latest quarterly assessment from the association found that 50% of German plastic packaging firms believed the economic climate would improve in the first quarter of the year with a further 47% predicting it would remain the same.
Two thirds of industry players predicted company turnover would rise in the next 12 months – a jump of 11% compared to respondents three months earlier.
Less than a fifth of firms expected a fall in turnover.
Around a third of the sector expected exports to fall, with only 10% forecasting an increase.
Members are relying on a “solid domestic economic activity”, particularly in the food packaging segment, added the IK spokeswoman. “Food packaging demand tends to remain stable and because of the high rate of new applications and innovation the sector generates.”
But she noted that uncertainty over German energy prices was an increasing concern in the industry.
“In general there is a positive outlook from the sector but with energy prices companies do not know what is going to happen.”
