Packaging companies taking a hit: report

By staff reporter

- Last updated on GMT

Related tags: Management, Cost, Price

Reduction in orders and raw material prices are reportedly affecting some of the leading global packaging suppliers.

Australian packaging company, Amcor, has been hit by raw material prices and Asian imports and might have to close one of its production sites as a result, claims the Sydney Morning Herald.

The newspaper also reported that the manufacturer may be letting go 60 of its staff at management level, with 100 other jobs also under threat at its Regent's Park flexibles plant in Sydney.

The packaging company's carton business at Botany, according to the article, is also going to be affected by the loss of a large contract with breakfast food manufacturer, Kellogg's.

Meanwhile, last week, the chief financial officer at Krones, the German packaging technology company, told the German newspaper, Euro am Sonntag, that it will not reach its 2008 sales growth target due to weaker orders.

Hans-Juergen Thaus said that he expects a lower double-digit percentage drop in fourth-quarter orders compared with €537m in the same quarter last year.

And Holland-based Impress recently announced that it is to pass on tinplate prices increases to its customers next year.

The can manufacturer said that while it has negotiated over the past few months to secure competitive pricing levels and volume of supply with tinplate suppliers, it still has no choice but to pass on the higher costs in 2009.

Nick Ince, director of sourcing at Impress, said that the company will continue to standardise and lightweight its product ranges to assist the supply chain in terms of cost reduction.

The announcement follows a similar move by Crown Packaging Europe in October when it reported an increase in its prices for tinplate food cans by 32 per cent from 1 January, 2009.

Crown cited supply shortages and tin mill closures as having a negative impact on the commodity's pricing, and it said that it had no choice but to pass on the increases to its customers.

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