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Survey of German packaging companies suggest prices are set to rise

By Simon Pitman , 14-Jan-2011
Last updated on 14-Jan-2011 at 12:52 GMT

A survey conducted by Germany-based plastics packaging association Industrievereinigung Kunststoffverpackungen (IK) suggests further price rises are expected in the first quarter of 2011.

According to the association’s quarterly survey, IK Economic Trend, which questions key industry players in the consumer packaging sector, the price rises will come alongside positive economic development during the quarter.

Over 60 per cent of the association’s members said they expected higher prices for their packaging, on account of rising costs for plastics packaging and raw materials.

Rising material costs have put the pressure on in all aspects of the cosmetics and personal care industry in recent quarters, and if the IK survey response is anything to go by, this trend looks set to continue well into 2011.

Over two thirds of members predict high supplier bills

Indeed, of the selection of members that were surveyed, 72 per cent said they are expecting raw material prices to increase, which justifies the hikes in the overall costs of packaging.

IK says feedback from association members in recent months indicates that many businesses have incurred ‘drastric price increases’ by many of their major raw materials suppliers.

Adding to these pressures is the fact that energy costs, including fuel and electricity, have all been mounting during the latter half of 2010, which has served to raise overall manufacturing costs significantly.

Higher energy costs add to the mix

Underlining the energy costs, IK estimates that for the average member business using 18,000 megawatt hours, the recent price rises for electricity will add an extra €300,000 to the energy bill.

“On the whole, manufacturers of plastics packaging sense an upswing, not least thanks to the continuing increase in demand for light-weight packaging to conserve resources,” IK said in an official statement concerning the survey findings.

However, the survey results also showed that 60 per cent of IK members questioned are expecting a positive economic development during the first quarter of 2011.

Back in December IK stated that turnover growth for 2010 averaged around 15 per cent amongst its members, though this figure did come after a poor performance for most businesses during 2009.

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