Mega Trend in Global Corrugated Packaging Market: Rising Consolidation

The global corrugated packaging market is projected to expand at a CAGR of 4.0% from 2014 to 2020. By 2020, the global corrugated packaging market is expected to be worth US$173.6 mn. One of the key growth drivers of the global corrugated packaging market is the rising consolidation. Major players in the global corrugated packaging market are entering into mergers and acquisitions (M&As) in order to drive their innovation capability, geographic coverage, and meet consumer demand. A majority of these M&As and partnerships are taking place in the western markets of North America and Europe.

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Overview of Consolidation as a Mega Trend in Global Corrugated Packaging Market

Prominent companies in the global corrugated packaging market include Nine Dragons Paper Limited, DS Smith Plc., Packaging Corporation of America, Mondi Group, Oji Holdings Corporation, Georgia-Pacific Equity Holdings LLC, Lee & Man Paper Manufacturing Limited, Smurfit Kappa Group, Rock-Tenn Company, and International Paper Company.

Let us look at the most recent and key M&As that have occurred in the global corrugated packaging market:

Atlantic Packaging Acquires Skybox Packaging

In September 2015, Atlantic Packaging Products, a containerboard and corrugated packaging products company, acquired the U.S.-based firm Skybox Packaging. Skybox Packaging (Ohio) offers customized corrugated and non-corrugated packaging solutions and has a complex logistics and inventory management program. With this deal with Skybox Packaging, Atlantic Packaging is expanding its presence in the U.S.

Crown Paper Buys Montebello Container

In September 2015, Crown Paper Group acquired Montebello Container, an independent maker of corrugated sheet in Southern California. With this investment, Crown Paper Group is projected to benefit from Montebello’s consumer base in the following ways: Enabling Montebello to continue providing their consumers quality products, product continuity, and access to Crown’s team of executives with a track record of excellent packaging business capability. Prior to this acquisition, Crown had acquired Townsend Holdings and came to own their paper mill.

Welch Packaging Group Merges with American Corrugated Products

In July 2015, Welch Packaging Group announced a merger with American Corrugated Products. According to Welch’s founder and CEO, American Corrugated offers a mix of personalized packaging solutions featuring strong design capabilities that fits the Welch model like a glove. Furthermore, this investment is expected to expand the design, talent, and niche products that Welch can bring to their consumers while broadening their automotive industry expertise. On the other hand, American Corrugated is projected to benefit from Welch’s global coverage and product abilities.

In spite of the rising number of mergers and acquisitions, the global corrugated packaging market will continue to witness growing capital expenditure to drive new product development. In addition to this, major players in the global corrugated packaging market will continue to invest higher in machinery and equipment purchase. Furthermore, the emerging regions in the global corrugated packaging market will continue to witness accelerating industrial production, which will further fuel the market’s growth.

The global corrugated packaging market will also get a boost from the high growth of its application sectors, especially, the rapidly-expanding food industry and healthcare industry. Moreover, the global corrugated packaging market will also benefit from the fast-growing e-commerce industry. Nevertheless, the global corrugated packaging market will be constrained by the low endurance of corrugated packaging against mechanical stresses and adverse weather conditions.

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