A year of ups and downs in the packaging industry

09.12.2021 2021 will be remembered at Bobst Group (Mex, Switzerland) as a year of unique economic conditions, with order intake up 70% year-on-year.

BOBST takes a detailed look back at 2021.
© Photo: BOBST
BOBST takes a detailed look back at 2021.

In 2021, BOBST shows a strong financial performance and achieves a sizeable increase in order intake compared to 2020. Taking into account the COVID 19 lockdowns and the resulting decline in 2020, net growth since 2019 is well over 40%. Geographically, North America, Southern Europe (France, Italy, Spain, Portugal, Greece), Germany and Poland performed very well. The South American market also performed well. Although a slowdown was observed in China, overall results in the country were still very positive. South East Asia remains a complex and fragmented region, but one that offers great opportunities for the future.

"Notwithstanding travel restrictions for our field technicians, services to people and to our supply chain are more important than ever and have become a strategic factor," the Swiss machinery manufacturer wrote in a recent press release. "Our qualified technicians have done an excellent job and supported many customers remotely, both during installation and troubleshooting. This has created a new service landscape. The importance of machine connectivity became clear. But also that BOBST has the tools for data analysis to predict and solve technical problems before they occur. And that we are able to help our customers learn how to work with and adapt to the latest technical solutions."

Major changes in the packaging industry

But 2021 also brought major changes across the packaging industry. Skills shortages in some regions and unprecedented price increases in paper, board and flexible materials have created unexpected challenges and uncertainty for many customers.

"The price increase in raw materials was enormous and affected our own pricing conditions," the company explains. "For example, the prices of raw materials used in the production of machine frames and components rose unexpectedly. The same applies to hot-rolled steel sheet, which has seen a 119% price increase since January 2020. The price of cold-rolled steel sheet increased by 126%. Rolled steel sections and beams by 91%. Aluminium alloys by 75% and copper by 65%. Raw materials for mechanical components (including LLDPE resins, nickel, polyurethane) increased by more than 40% since September 2020 and materials for consumables (belts, chains, lubricants, rollers, etc.) increased by 9% on average. Freight costs have also increased since August 2020 – by 216% for maritime, 200% for air and 5% for road."

Labels and flexible packaging

Two words best characterise 2021 for the labels and flexible packaging market segment: digitalisation and sustainability. The label market saw strong growth in all-in-one solutions combining flexo and digital printing systems. Within digital, inkjet printing is growing the strongest as it combines high quality with high productivity and low operating costs. Nevertheless, label production remains a melting pot of different technologies, each best suited for specialised applications. Manufacturers are confronted with the growing number of short runs and are striving for a higher degree of automation in their processes, especially as labour is becoming harder to find. The prices of label materials increased significantly and for some, sourcing became more difficult. 

For flexible packaging, the market faces the "dilemma of having to reinvent plastic." Recyclability and food compliance are high priority issues, with strong demand for new high-barrier and mono-material solutions and even metallized paper solutions. There is strong demand for home delivery and ready-to-eat meals, driven by e-commerce. The strongest growth is in stand-up pouches, tubular pouches and portion packs. The industry is experiencing stable growth, but is cautious about the impact of potential new regulations on plastic manufacturing.

Atlanta Label Competence Center

The opening of the Atlanta Label Competence Center was another milestone for BOBST in 2021. It welcomed many customers and sold them more new digital printing solutions. In addition, BOBST held a successful Open House in Florence in September, which was attended by more than 100 label manufacturers. BOBST is admittedly a relatively young player in the field of digital label production. However, with more than 50 inkjet machines installed – printing more than 21 million linear metres - it has shown that market dynamics can be changed within a short time.

In the flexible packaging sector, the entire packaging industry is looking for a new "sustainable face". In folding box and glass production, there is a partial switch to plastic to reduce the environmental and transport impact. At the same time, they see some flexible packaging moving towards paper-based packaging. The most important trend, however, is the shift from multi-material packaging to mono-material solutions, although here the issues of waste collection and recycling capacities are not yet solved. For bioplastics and recycled films to become competitive, they need to be used more.

Today, BOBST offers ready-made solutions made of mono-material – from the required barrier effect to printing and lamination. The work done with partners such as BASF, DOW, SUN CHEMICALS, ELBA, HOSOKAWA, ILENE, MICHELMANN, UFLEX and many other companies enables innovations that will shape the future of recyclable packaging.

Outlook 2022

"Let's look ahead to 2022: in the label market, digitalisation will be the main driving force - manufacturers will be looking for fully digitalised end-to-end solutions to optimise their production process. Everything that can be digitised will be digitised," BOBST is convinced. "Label manufacturers will be able to produce faster, at higher quality and with less waste, and meet the increasing demand for on-demand manufacturing."

"For flexible packaging, we expect the oneBARRIER solution to be available for paper-based use, leading to greater sustainability. The oneECG colour management solution for fixed ink set printing will be used in an increasing number of plants and will eliminate the need to mix inks and the associated waste. In general, we strongly believe that well produced and well recycled plastic packaging has a future. Here we are ready with available, economical solutions.”

For the year 2022, BOBST expects an increase in its field service technicians, who will be more and more involved in the reactive and proactive support of customers. In this context, remote support will see further growth. Quality assurance solutions will also gain importance. They are the best way to reduce waste, avoid complaints and increase profitability. The oneINSPECTION offering is part of BOBST's commitment to making zero-defect packaging production a reality.

In summary

BOBST concludes: "The year 2021 was strong, unpredictable and full of opportunities. Our customers confirm that we are on the right track with our industry vision – networking, digitalisation and automation. Sustainability developments are part of our solutions that support all industries and especially flexible packaging manufacturing. They take into account the commitments made by brand owners on the recyclability of their packaging."

"We are confident that 2022 will be a good year for us. But none of us can ignore the extraordinary pressures we face due to global supply chains and resource scarcity. The pandemic also continues to play an important role in terms of people's behaviour. We can help our customers - print service providers and packaging manufacturers – by doing what we do best: innovating, improving the sustainability of our industry and its products, always keeping in mind that our industry is always going through longer cycles."