Fiber-based consumer packaging leader, Graphic Packaging International, has launched ClipCombo™, a highly innovative beverage multipack machinery system.
This modular system offers beverage makers and packers the ability to apply two different clip-style packs with a single machine, optimising production efficiency and enabling the differentiation of brands using premium and standard clip styles.
ClipCombo offers unparalleled flexibility. Along with the ability to switch between two pack styles in just minutes rather than hours, it can achieve top-line speeds of up to 400 packs per minute, depending on application and configuration.
ClipCombo has machine options that apply to either can or PET bottle multipacks. ClipCombo for cans combines award-winning KeelClip™ or GripClip™ with the minimal material EnviroClip™, while for PET bottles, it combines Cap-It™ and EnviroClip™.
The versatility of ClipCombo will help lower capital investment for beverage packers, as the ability to deliver multiple pack styles with rapid changeover removes the need for several installs. This frees up space on the factory floor and reduces the number of operators required.
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Since the financial and economic crisis, there has only ever been an upwards trend for food processing and packaging machinery. In 2020, the 10-year growth phase in tis mechanical engineering sector came to a temporary end with a decrease of 9 percent to 13.9 billion euros.
“The drop in production doesn’t come as a surprise, as 2019 was an exceptionally strong year for our industry. Even without the Corona pandemic, we would have probably only just exceeded this high level,” explains Richard Clemens, Managing Director of the VDMA Food Processing and Packaging Machinery Association.
In the packaging machinery sector, production dropped by a total of 8 percent to 6.7 billion euros. In food processing machinery, the change rates varied in the individual subsectors. Production of meat processing machinery slightly increased to over 1.2 billion euros. The demand also remained stable for bakery machinery. Both subsectors reported a good domestic business, which overcompensated the decrease in exports.
Production of confectionery machinery dropped by 18 percent below the very high level of the previous year. There was also a double-digit drop in the production of beverage machinery. “These two sectors are very active in non-European countries and are among those suffering from the Corona pandemic. In addition, the customers of these industries include many multinationals that have simply frozen their investment projects,” says Clemens, explaining the different developments.
Corona- pandemic weakens export business
Exports of food processing and packaging machinery dropped by a total of 8 percent to 8.5 billion euros in 2020. The decline varied greatly from one sub-sector to another. Manufacturers of packaging machinery, meat processing machinery and bakery machinery recorded downturns of 5 to 6 percent. Confectionery machinery was down by 24 percent, and brewery machinery saw a 38 percent drop in exports. However, the reference values of the previous year were also exceptionally high in these two sectors. The severe impact on the brewery machinery sector is also directly related to the limited or complete standstill of business activity in the hotel and catering industry as a result of the Corona crisis.
From a regional point of view, foreign shipments of food processing and packaging machinery decreased in almost all economic regions in 2020, except of North America. In particular, deliveries from Germany to the USA increased by 8 percent to over 1.2 billion euros. Positive impetus also came from important individual markets, such as Russia, Mexico and China.
However, deliveries to the EU-27 as the most important sales region dropped by 15 percent. Exports to Asia also decreased by a significant double-digit percentage.
According to current estimations, a return to the 2019 level is not very likely for 2021. “We do expect production to grow this year, but it is unlikely to be in double digits,” says Clemens. The general outlook for the industry is positive, according to the trade association’s managing director, as the sector’s companies are well positioned internationally and continue to benefit from a rising global demand for processed and packaged food, beverages, cosmetics and pharmaceuticals.
The VDMA represents around 3,300 German and European mechanical and plant engineering companies. The industry stands for innovation, export orientation, small and medium-sized enterprises and employs around four million people in Europe, more than one million of them in Germany only.
2019 was the ninth consecutive year of growth for packaging machinery manufacturers from Germany. According to the Federal Statistical Office, the approximately 250 mainly medium-sized companies produced packaging machinery worth around 7.3 billion euros, an increase of 2 percent. The production of beverage packaging machines increased by 4.3 percent to 2.3 billion euros. The production of other packaging machines increased by 1.2 percent to just over 4.9 billion euros.
While the production figures for packaging machinery in the first three quarters of 2019 still showed a total increase of 8 percent, they fell in the fourth quarter by 10 percent below the previous year’s figure. The slowdown in demand in the second half of the year was already affecting the German production.
Europe remains largest sales region
Half of all German packaging machinery exports went to European countries. The delivery volume reached a value of 3 billion euros and was thus 3.1 percent above the previous year. Asia purchased machinery and equipment worth just over 1.1 billion euros (plus 16 percent) and North America worth 886 million euros (plus 8 percent). Deliveries to Africa amounted to 351 million euros (plus 1 percent). Less positive was the development of the export business to Latin America, the Near and Middle East and Australia-Oceania. Exports fell by a double-digit percentage.
USA largest single sales market
With an export volume of 786 million euros (plus 7 percent), the USA remained the largest single sales market for packaging machines made in Germany in 2019. China is in second place with 451 million euros (plus 23 percent), followed by France (309 million euros, plus 3 percent), Poland (296 million euros, plus 9.5 percent) and the United Kingdom (248 million euros, plus 18 percent). Exports to Russia increased by 5 per cent to 203 million euros. This puts the country in eighth place among the ten largest export markets, after Spain (234 million euros, up 24.5 percent) and the Netherlands (219 million euros, up 29.1 percent).
Outlook: Everything open
It is currently impossible to estimate or quantify how the packaging machinery industry will develop in 2020. Due to the weak order activity in the second half of 2019 and, in particular, the drop in foreign orders, the German Food Processing and Packaging Machinery Association already assumed in its November 2019 forecast that production of packaging machinery would decline in the current year. “The extent of the decline caused by the outbreak of the corona crisis and the consequences associated with it will only become really clear in the coming months,” says Richard Clemens, Managing Director of the VDMA Food Processing and Packaging Machinery Association. Companies are increasingly feeling the effects of the corona pandemic. In addition to disruptions in the supply chain, especially in Europe, disruptions on the demand side in particular have increased further. Not only are fewer orders coming from Europe, but also from Asia and North and Latin America. Order intake in the first quarter was down 19 percentage points year-on-year. If this trend continues, it will continue into the coming year. “However, we are optimistic that demand will recover quickly following the easing of government restrictions. The increasing global demand for hygienically packaged and safe food and pharmaceutical products is a major contributor to this,” says Clemens.
The production of food processing and packaging machinery rose by 8 percent in 2018. This was not only a record figure, but also the highest growth rate in the current decade.
The past year was very successful for the manufacturers of food processing and packaging machinery: production rose by 8 percent to just under 15.2 billion euros.
“Many manufacturers started 2018 with a very high order backlog, which was gradually converted into sales in the first half of the year. This, too, explains the very high growth rate of 8 percent for the year as a whole,” says Richard Clemens, Managing Director of the VDMA Food Processing and Packaging Machinery Association.
The Packaging Machinery Industry grew by a total of 8 percent to 7.1 billion euros. The “Other Packaging Machinery” segment increased by almost 12 percent to 4.9 billion euros, while the Beverage Packaging Machinery segment increased by 1 percent and reached 2.2 billion euros, only slightly above the previous year’s level.
Where Food Processing Machinery is concerned, the degrees of the growth rates in the individual sub-areas do vary somewhat – but all are positive: The production of meat processing machinery grew by 7.6 percent to 1.2 billion euros. The production of bakery machinery increased by 9 percent to 667 million Euro. The confectionery machinery manufacturers recorded growth of 16 percent reaching 360 million euros and the production of beverage production machines grew by 7 percent to 552 million euros.
Exports and investment climate remain strong in Germany
In 2018, exports of Food Processing and Packaging Machinery rose by 6.1 percent to over 9 billion euros. Deliveries to the industry’s most important sales region, the EU-28, rose by 9 percent. Demand from the USA – the most important foreign market – remained high. Exports to China and Russia showed double-digit growth rates. Clear impulses came from many other markets, including Brazil, Japan, the Republic of Korea and India.
Domestic business, too, continued to be an important pillar of the positive business development in 2018. In some food sectors, substantial investments were made in order to expand capacity and to expedite modernisation projects. Also, the shortage of personnel in the processing plants led to further investments in machinery and equipment.
The outlook for 2019 is subject to uncertainties
Generally, the prospects for the Food Processing Machinery and Packaging Machinery sector seem good, as the industry continues to benefit from the rising global demand for processed and packaged food and beverages as well as pharmaceutical products. However, against the background of the exceptionally strong growth last year, only moderate growth of at most 2 percent is likely to happen in 2019.
“Although sales in the first four months of 2019 were higher than in the same period of the previous year, the sales growth is expected to be only moderate at 2 percent. However, incoming orders in the first four months clearly fell short of the previous year’s level. Uncertainties due to ongoing trade disputes, but also many regional political crises, are causing investors to hold back with new orders,” Clemens comments on the business outlook for 2019.