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Vox Pop: Will 2009 bring an upturn for UK packaging?

liz.wells@haymarket.com, 18 December 2008

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The final months of 2008 saw financial markets in crisis and the pound plummeting, so we ask whether this year will bring more of the same, or if the industry will experience a new prosperity?

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Chris Jones
Technical sales
A E Adams (Henfield)
No
Next year will not see an upturn because of the general decrease in spending that you can see in everyday life. With major elements like house and car purchases almost at a standstill, it will get worse before it (hopefully) gets better.
In the 40 years Adams has been in existence, we have gone through two or three downturns/recessions and, historically, we have found it impacts on activity six to nine months after other industries are affected. On a positive note, businesses that have low levels of debt are in a good position to survive and to take on work that appears to be coming back from lower-cost economies.
The dollar-pound exchange rate has most of these importers facing real cost rises. This significant cost increase, added to quality and time-to-market problems, should increase the trickle of production back to the UK and European producers in 2009.

Mark Kerridge
Managing director
Benson Group
Maybe
Having attended a number of presentations discussing the recession and how it will affect business, it would seem that the general opinion is that it is unlikely to last for just one or two quarters.
At the other extreme it is unlikely
to extend into a never-ending slump
or depression. Most experts are predicting it will be around two
years before we claw our way out, which means the latter half of 2010
or early 2011. All of that suggests the upturn is unlikely to surface within
the next year.
As far as packaging is concerned, I believe that some sectors are almost certain to see a drop in volume. Others, however, will hold up well, and these will be sectors that are delivering product that is closer to the basic needs of the consumer. Those, for example, that are involved in the production of packaging for the food and the pharmaceutical sectors should have reasons to be optimistic.

Peter Knutsson
Managing director
Tetra Pak UK & Ireland
Yes
There’s no denying 2009 will be a challenging year for the industry. However, equally it is during these testing times that long-term investments in sustainable practices and packaging can prove especially beneficial for the industry.
Past recessions have seen fresh thinking and creativity flourish, and I expect this is what we’ll see in the packaging industry in the next year. At Tetra Pak we’re certainly looking forward to more innovation, product launches and more collaboration with customers and retailers. The success of our FSC Tetra Recart launch with Sainsbury’s Chopped Tomatoes has been followed up with Napolina also launching in Tetra Recart, and it is this type of creative thinking and product we anticipate seeing more of.
It’s impossible to predict how long it will take for consumer confidence to be restored. But as budgets are set for the new year, the industry still needs to take a long-term view.

Nick Mullen
Director
Metal Packaging Manufacturers Association
No
It is unlikely that 2009 annual figures will show an improvement on 2008. The full impact of this year’s events is still being flushed through the system and will run well into the new year. The best we can expect is for the industry to show a minor shift as the year goes on.
For many small and medium-sized firms, these trying times are going to prove a bridge too far. Without the momentum of substantive volumes, these smaller organisations were already stretched and decreasing demand in some sectors such as DIY could prove a fatal blow.
As has been the case for decades in the UK, the household economy rides on the back of the housing market with the domino effect of activity that is generated. Until confidence starts to be regained here the internal economy will continue to prove difficult for firms.

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