Meeting the Demand for Corrugated Packaging

The corrugated packaging market in Asia is expanding exponentially on two fronts: Local markets are spurring massive growth in the industry and companies with Asian-based manufacturing operations are forging new strategic partnerships in the region. The Asia-Pacific region represents the largest and fastest-growing corrugated packaging market in the world, accounting for 53.7% of production and shipments in 2018.

Reasons for accelerated growth of market

The Asia-Pacific packaging market is growing at an impressive rate. China is leading the charge and has consistently ranked among the top 15 countries by corrugated output, along with India and South Korea. Furthermore, China’s share of the market is expected to expand at a compound annual growth of over 6% in the next 10 years, contrasted with the global rate that is set to grow by 5%.

Several factors contribute to the acceleration of the corrugated packaging market in the region:

• Increase in environmental awareness by urban populations
• Demand for sustainable packaging 
• Demand for convenient packaging (offset by new restrictions on single-use in some countries)
• Growing e-commerce activity
• Rise in the demand for electronic goods and home and personal care products

Economic development and growing per capita income are further factors in the growth of Asia’s packaging market.

Why businesses choose Asia for their packaging needs

Southeast Asia is an attractive manufacturing hub. Specifically, factories in the region offer reduced labor and logistics costs, and the companies that outsource their product and packaging to these operations are often able to avoid the financial costs of developing an in-house team of designers, engineers and project managers. Make no mistake, when companies decide to move manufacturing to South East Asia, they outsource their packaging to the product manufacturer. In large systems that utilize many OEM’s and product factories, it pays to consolidate the development and implementation of packaging. 

In addition to reducing direct and indirect costs, having packaging operations in Asia has multiple benefits, including:

• Access to a large network of packaging suppliers and the agility to change packaging suppliers as needed
• Access to efficient export-oriented factories and other infrastructure
• A strong workforce and high worker productivity
• Favorable business conditions and policies, including reduced taxes and other incentives

Companies that are successfully using this model have documented strategies to ensure that all stipulated standards are being met, in addition to practicing complexity management. 

Potential quality and compliance issues

Though corrugated packaging is thriving in Asia, it’s essential to follow region-specific standards. Regions and quality vary across Asia. China alone has 34 provinces. It is important that any business looking to outsource their packaging to the region fully investigates requirements and challenges specific to their chosen location. Failure to navigate region-specific standards and compliance policies could result in:

• Poor quality packaging that fails to properly protect the product in the extreme humidity of the region
• A lack of consistency across packaging portfolios 
• Poor-quality transport packaging for the long trip from Asia to Western distribution centers and retail destinations, leading to product damage and other consequences 
• Distribution center inefficiencies such as wasted space and limited reuse of cartons beyond single-leg journeys
• A lack of respect for, or breach of human rights legislation, ethical norms, safety and environmental standards 
• Harsh penalties, liability and reputational damage from failure to comply with relevant government regulations and professional industry standards. 

The stakes are high, but they can be solved, in part, by partnering with packaging experts with regional expertise and a local presence.

We have a strong presence throughout Asia

Billerud Managed Packaging has offices throughout Southeast Asia, including China, India, Indonesia, Vietnam and Thailand. We serve as your boots-on-the-ground when it comes to quality assurance and compliance, leveraging our regional expertise and qualified networks of over 3,000 OEM suppliers and more than 60 packaging production partners to deliver custom corrugated packaging of the highest standard. 

Achieve cost transparency, operational savings and more environmentally-friendly packaging by partnering with our team of experts. To identify savings opportunities, contact us for a no-obligation, no-cost audit of your packaging and shipping operations in Asia.

In the meantime, download our free eBook, “Strategic Packaging Procurement in Southeast Asia,” to help gain insights into packaging sourcing and procurement.