Costs, environmental concerns reducing volume of material used in packaging production

07/23/2010 09:59:03 AM
David Mitchell

Tindell’s point is illustrated by the first quarter results reported by Lake Forest, Ill.-based Pactiv Corp.

The packaging manufacturer reported April 21 that its first quarter gross margin was 27.9% compared to 35.4% in the first three months of 2009, while operating margin decreased from 18.9% to 13.1%.

Polyethylene costs were 34% higher than at the same time a year ago, while polystyrene costs were up 55%, the company reported.

As with corrugated packaging, packers and manufacturers are trying to do more with less.

Jim Scattini, director of new business development at Watsonville, Calif.-based Sambrailo Packaging, said the company’s new 6-ounce clamshell will allow shippers to stack four extra tiers per pallet, or an additional 576 clamshells per pallet.

The clamshells are made from recycled polyethylene terephthalate, or PET, and are recyclable, Scattini said.

On a similar note, Antigo, Wis.-based Volm Cos., is producing a new Ultratech mesh with less raw material than standard raschel mesh without sacrificing the strength of produce bags, said business development and marketing manager Mike Vierzba.

The change, Vierzba said, should allow the company to ship more than 500,000 additional 10-pound bags per truck to its customers.

Other options
The rising cost of plastic and corrugated material could cause some packers to look toward alternatives, such as palm fiber-based packaging.

“Our raw material is waste from an upstream industry and as such our input costs are fairly steady,” said Shannon Boase, chief executive officer of Earthcycle Packaging Ltd., Vancouver, British Columbia. “People are becoming acutely aware of the effects that disposable plastic packaging is having on the health of their communities.”

Bob Klimko, director of food, beverage and sustainability marketing for Oconomowoc, Wis.-based Orbis Corp., said reusable plastic containers can be a solution for companies trying to reduce water, waste and energy.

Tindell, whose company offers both corrugated and reusable plastic containers, said RPC availability can be limited, but companies in that industry are investing to increase the size of their pools.

Organics
Several sources noted an increase in demand for “green” packaging.

Ironically, Steve Greenfield, director of sales and marketing for NNZ Inc., Lawrenceville, Ga., said that some of that increase is coming from organic producers and the retailers that stock their products.



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