European flexible packaging manufacturers concerned about raw material supply shortage

Flexible Packaging Europe (FPE) member companies have expressed concerns about the current raw material supply situation which sees only around 80 percent of capacity being available, depending on the polymer.

FPE member companies have had to deal with increased complexity in their production schedules due the insufficient raw material supply

FPE comprises more than 70 small- and medium-sized companies as well as the major European producers of flexible packaging for all materials. These companies cover more than 80 percent of turnover in the European flexible packaging market. Also six national flexible packaging associations are members of FPE ensuring consistency between national and European activities and lobbying.

During their recent annual conference in Dubrovnik, FPE members detailed how more than 30 ‘force majeure’ declarations by the leading polymer manufacturers in Europe, coming in a short time frame, have led to significant shortages in supply and resulted in only about 80 percent of capacity being available, depending on the polymer.

The effect on converters means they may have difficulties in supplying finished products to meet their customers order requirements, particularly in the food and beverage sectors.

FPE member companies have had to deal with increased complexity in their production schedules due the insufficient raw material supply, and have reported sudden cancellations of agreed deliveries followed by offers with the same volumes but with significant price increases.

In particular small and medium sized manufacturers of flexible packaging are suffering from this situation, although multinational companies are facing difficulties too. Some FPE members also reported rumours of suppliers holding on to stocks of materials.

Stefan Glimm, FPE chief executive director, said: ‘The unfortunate situation of so many force majeure declarations in such a short period is either the test or use of market power. Or it clearly shows the strong need for continuous investment in and maintenance of the ageing European polymer production facilities.

‘The high profits reported should enable the polymer suppliers to invest in their capacities to avoid such technical problems in the future. The growing flexible packaging market in Europe should be sustained by a stable supply chain to ensure future market growth.’