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The packaging industry is getting ready for further increases in raw material prices

The packaging industry is getting ready for further increases in raw material prices

created Forex Club21 Września 2022

Problems with access to the raw material, i.e. cardboard, will result in a further increase in the prices of medicines and food products. The prices of cardboard packaging may soon increase by even several dozen percent. This is due to the increase in the prices of raw materials and the costs of consumables, as well as difficulties in access to electricity and gas at cardboard suppliers. We expect delays in the delivery of raw materials necessary for the production of packaging - forecasts the Management Board of the Akomex Group - it may even stop some raw material suppliers from producing. The planned further price increases in the sector will probably also have an impact on higher purchase prices of drugs or food products packed with cardboard packaging. 

Up to 250% increase in energy prices

The turn of the year promises to be very disturbing. Reports about possible interruptions in the access to electricity and gas for companies producing raw materials and the constantly rising costs of energy itself are the main factors that prevent the packaging industry from being optimistic about the upcoming winter. Paper mills in Poland and Europe are already preparing for various possible scenarios by introducing, among others, "Energy supplement" in the amount of 170 to even 500 EURO per ton of raw material needed for the production of cardboard packaging. 

- The conditions in our industry change from week to week. Paper producers from Poland, as well as foreign ones, are constantly introducing further increases on their products, which we use for the production of cardboard packaging. This is mainly the effect of the increase in energy and gas prices, which we are seeing throughout Europe. Some of our contractors speak directly about the temporary suspension of production. These factors will certainly affect the supply chain disruptions and, as a result, may lead to delays in the supply of raw materials for the production of packaging. Since the beginning of the year, we have intensively increased our warehouse stocks, but we cannot continue this activity - we have reached their maximum level. Paper mills shorten the time of raw material storage, and increase storage fees. For a long time, we have been paying the price for the carton on the day of delivery, not the price used when calculating the offer for the customer. On the other hand, we are also struggling with significant increases in production costs. The prices of transport, paints and pallets are rising, but the most for energy. Next year, we will pay up to 250% more for electricity supplies to our production plants !! Unfortunately, such drastic increases must also affect the final prices of our products. I estimate that if the situation does not stabilize in the coming months, the prices of cardboard packaging may increase again by a dozen or even several dozen percent. comments Grzegorz Łajca, President of the Akomex Group.

In the cardboard packaging sector, the costs of the raw material - cardboard (by over 50%, and some types even by 100%) and all consumables increased rapidly in the past year. The prices of pallets used in transport increased by 170%, packaging film by 60%, varnishes and paints used in the production of cardboard packaging by 20%, and the cardboard boxes themselves were used  in transport by 40%.

Akomex Group

The Akomex Group has over 50 years of experience in the market, it manages three factories: in Poland and in Denmark. It employs over 600 people. It consists of 3 companies: Akomex, DrukPak and Danish Plano Pack. About half of the company's products are exported outside the country, mainly to Western European countries. The manufacturer provides packaging, as well as leaflets, labels, trays and laminated sheets for industries such as pharmaceutical, food, personal care, electronics and home accessories. Annually, the company's production plants leave approximately 1,3 billion packages, supplied to the leading brands of the food and pharmaceutical industries. Last year, the Akomex Group recorded approximately PLN 280 million in revenue. 

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