Industry Analysis & Industry Trends
Cardboard box and container manufacturing is a growing industry. Strong demand in China and other emerging economies has propelled the industry into strong growth in the past five years. Cardboard packaging is needed for all types of manufactured consumer goods, which is why demand is so strong in the developing world. Although the industry suffered a decline during the global economic collapse, there has been a recovery, with revenue expected to grow by 3.8% per annum over the five years through 2012. Revenue has been pushed up by higher prices and stronger demand, with strong commodity prices putting upward pressure on the price of pulp, paper and paperboard. In 2012, revenue is forecast to grow by 9.0% to total $483.5 billion.
Industry profitability is also rising... read more
Starting a New Business
The business of cardboard container manufacturing is fairly easy to get into, which means that barriers to entry are low. This is indicative of the large number of smaller and medium operators, which have grown over the past ten years. The main expense for new entrants is the capital needed to set up a business, the value of which is dependent on the size of the operations. Smaller operations require primitive machinery and equipment, and are not expensive to set up. Securing funding for a new business may be difficult in times of tight credit markets; since the global financial crisis in 2008, financial institutions globally are expected to increase requirements needed to borrow money in the future.
Securing skilled staff is another barrier to entry... read more