The Packaging Market in Russia Today and its Future

The Packaging Market in Russia Today and its Future

The packaging market today is one of the leading segments of the Russian economy as far as market growth is concerned. Based on information from the State Committee of Statistics, growth in this segment amounted to 53 per cent from 1999 up to 2003, which means over 10 per growth per annum. It is much higher than the growth of the world market, which amounted to 4-5 per cent per annum for the same period

Individual segments, such as certain types of cardboard packaging and flexible plastics, in particular, are growing still quicker; their annual growth amounted to 15-20 per cent. Most industry analysts tend to believe that in the years from 2005 to 2009 the Russian packaging market will grow in its cost value, and eventual negligible fluctuations of the macroeconomic situation in Russia will not stop this trend in any way. It is expected that the process of the initial saturation of the Russian packaging market will continue till the years of 2010, and this is only a modest forecast.
Besides, the local consumer packaging market demonstrates a higher growth, than the packaging market as a whole. If, in the experts’ estimation, the most optimal growth of the packaging market, as a whole, amounts to 10-12 per cent in cost value, this index for the consumer packaging is about 15-16 per cent. It is expected, that in 2008 the forecast for the volume of the market of consumer tare and packaging will be twice as much as the index for the year of 2003.
Of course, the demonstrated market growth is very attractive for investments in the packaging business. Russian producers, as well as western companies, demonstrate quite active investment policies in practically all sectors of the packaging market. Leading world companies, such as Alcan, Stora Enso, SCA, TetraPak, Amcor, Rexam, Sisecam, Owens-Illinois, have already announced their new projects.
As the analysis of information from the State Customs Committee shows, imports of packaging material and products account for a large portion of consumer packaging. The experts’ from “PRADO Marketing Company” estimate the leaders of packaging imports to the Russian Federation until 2004 were Poland, Germany and Ukraine However, the large import volume from Ukraine was due primarily by the fact that the country serves a corridor for imports from European countries. The leaders in packaging exports in 2005 were Italy, China, Austria, France, Great Britain, Finland and CZECH REPUBLIC. However, at present only packaging, which is difficult to produce in Russia due to technological or economic reasons, is imported.
The growth of manufacturing packaging equipment also grew about 10% during the last couple of years. Domestic and imported equipment are equally represented on the Russian market. Interesting fact that for manufacturing of domestic equipment Russian companies use mainly imported components sometimes as much as 100%. According to 2005 statistics the leading exporter of packaging equipment to Russia was Germany. Its share was about 59%, followed by Italy-with 15%, Sweden- with 6%, USA -with 5%, and the Netherlands with -4%
The most time and cost effective way to learn about this extensive market and see first hand one of the fastest growing markets in the world is to attend ROSUPAK, the largest packaging exhibition in Russia. The next edition of this event is ROSUPAK 08, set for June 23-27, 2008 in Moscow's Crocus Exhibition Center.
From its beginning 13 years ago, ROSUPAK has significantly expanded mirroring the most modern changes in the Russian packaging industry. ROSUPAK is the heart of the packaging business community, where every participant or a visitor can feel the beat of the packaging industry’s pulse. It is very profitable to visit the exhibition both for the companies which have long been active in the industry, and for the newcomers, who have recently come to the market. Everyone will find a market for their products and systems.