Annual Report 1998

20
Buyers demand customized packaging solutions with high
printability for good graphics presentation on the packaging.
Among other factors, this is a result of an increasing number of
goods being displayed for sale in the actual packaging to minimize
handling. Accordingly, corrugated board with a white
surface is an important competitive tool.
The packaging industry in Europe comprises more than 400
companies. The ten largest producers account for a relatively
small market share compared with other segments in the paper
industry. Currently, the industry is undergoing a restructuring
and consolidation to increase profitability and keep pace with
the customer trend.
A number of mergers and acquisitions were carried out
during the year, including the Jefferson Smurfit’s purchase of
Stone. International Paper acquired Union Camp and KNP
BT’s corrugated board operations were taken over by financial
investors under the name KAPPA. The Swedish company Stora
merged with Enso of Finland. Although some of these companies
operate mainly in America, the acquisitions contribute
Index
200
150
100
50
Corrugated board
price trend
93 94 95 96
Corrugated board
Liner/Fluting
97
98
Prices for corrugated board were stable during most
of the year, despite falling raw material prices.
to increased consolidation of the European market. SCA
Packaging also consolidated and expanded operations and is
one of the few companies that have achieved nearly total pan-
European coverage.
As a result of sustained industrial production in Western
Europe, demand for corrugated board increased during the
first six months of the year in most European markets. Demand
weakened slightly during the second half of the year.
Despite the successive slumps in large parts of Asia and
Russia, the Central European market was not affected to any
great extent during the year. Sales of transport packagings continued
to grow, though at a slower pace. This also applied to
China which, to date, has not been hit by the financial crisis
that so many anticipated.
Prices for corrugated board developed differently in European
markets in 1998. In total, prices rose in Europe, with the
exception of Great Britain, where prices were under pressure
during most of the year.
Index
200
150
100
50
Containerboard
price trend
93 94 95
Kraftliner
Testliner
96
97
98
The price for kraftliner fell sharply in October 1998.
The packaging market for beverages and food
products is less cyclically sensitive than other
market segments.