Adding value: the key to Japan’s $46.61 billion packaging materials industry
Japan’s containers and packaging materials sector is on the upturn with a 2.1% increase in shipment values for the Japanese FY April 2014 to March 2015 period over the previous year. Converted at current exchange rates, shipments of packaging for last year increased to US$46.61 billion (¥ 5,607.8 billion) – a full US$95 million increase over the 2013/14 value of US$45.66 billion (¥5,494.4 billion).
According to data released by the Japan Packaging Institute (JPI), in recent years, Japan’s packaging industry has been suffering from the double impact of a slowdown in growth following the twin impacts of the general global recession and the Great East Japan Earthquake of 2011 which decimated much of Japan’s industrial eastern seaboard.
In addition, the packaging industry and other related industries have been adjusting to Japan’s Circular Economy measures – in particular the Law for Promotion of Containers and Packaging Recycling with its end-of-pipe focus on “3R” (Reduce, Reuse, Recycle). Since the law places special emphasis on ‘Reduce’, significant research and development resources have gone into improving performance, downsizing, down gauging, and adding value with the introduction of new functions.
The impact of these three factors (Economic, Natural Disaster and Legislative) has been to refocus the packaging sector to the point where the industry is achieving significant reductions in the volumes of packaging material consumption while creating an added value to both product and pack – in short; Japanese packaging industry is seeing higher value returns while using less materials - a context which is not immediately obvious when looking at Japan’s packaging shipments from a purely statistical perspective.
In FY 2014/15, the shipping volume of packaging materials and containers increased by just 1.7 percent over the previous year to 18.7 million tons – from the 18.4 million tons produced in FY 2013/14.
While packaging volumes did show some signs of recovery after the slump following the 2011 earthquake, it has not returned to the 20.9 million ton annual production figure produced in the pre-downturn period of 2007.
This reduction in shipping volume is a result of the industry-wide efforts at down gauging to reduce the use of packaging materials across all industry segments while actually putting more packages into the market.
Paper held the highest market share of shipment volumes at 63.3 percent of the total packaging volume placed on the market. However in terms of value, paper represented just 40.80 percent of all packaging sales. While paper still held the highest total dollar value of all material shipments, its value in the market has been declining year on year.
Plastic - both rigid and flexible - is steadily making inroads in the market, and although it represented just 18.7 percent of the total volume shipments, it is demonstrating added value per ton by representing a full 31.3 percent of the total value of packaging put on the market.
Metal packaging, with its high recovery and recycling rate, remains popular as a high value material with a 16.2 percent market share of value derived from just 8.2 percent of packaging volumes.
Glass, while still relatively popular as a medium for alcoholic beverages, held a respectable 6.7 percent share of shipment production volumes, but demonstrated the perception of being a low-value packaging material and returned just 2.2 percent of overall values in the market.
Wood packaging, mainly for pallets and some niche cultural gift items, remains a small market in Japan at just 2.3 percent of material shipment values and 3.1 percent of volumes.
Other materials, such as closures, labels etc, represented a total value of 7.2 percent of industry shipments; however, since they are mostly used as components in the final package, the total volume cannot be calculated independently.
The TOKYO PACK 2016 packaging exhibition is the ideal venue for overseas companies looking to gain direct access to this US$46.61 billion Japanese market, and for brand owners looking for advanced innovative packaging solutions to grow their end-use market shares.
Japan Packaging Institute – the Tokyo-based industry association for the Japanese packaging industry, and owner and operator of TOKYO PACK - has announced that exhibitor registration is now open for Tokyo Pack 2016. Application forms and more information is available on the TOKYO PACK 2016 website.