SOURCE: Freedonia Group, Inc.

May 19, 2006 09:33 ET

U.S. Protective Packaging Demand to Reach $4 Billion in 2010

CLEVELAND, OH -- (MARKET WIRE) -- May 19, 2006 -- Protective packaging demand is forecast to grow 4.7 percent yearly to $4 billion in 2010. Advances will be driven by specialized packaging applications in the electronic, medical and other industries, as well as growing Internet-based sales. Overall price advances will be restrained by the commodity nature of most products and moderating raw material costs, which will recover from the high levels experienced in 2004 and 2005, when plastic prices spiked sharply as a result of significantly higher crude petroleum and natural gas pricing. Best opportunities are expected for inflatable bags, insulated shipping containers and bubble packaging. Loose-fill will exhibit the slowest growth due to significant competition from inflatable bags, bubble packaging and paper fill materials. These and other trends including market share and industry leaders are presented in "Protective Packaging," a new study from The Freedonia Group, Inc., an industry research firm.

Foamed plastic demand in protective packaging is expected to grow 4.6 percent annually to $1.1 billion in 2010 due to its competitive cost structure and good performance characteristics. Molded foam, mainly expanded polystyrene, will remain dominant as a result of its shock and vibration dampening characteristics and ability to be custom molded to protect sensitive electronic and other equipment.

Inflatable bag demand will advance at a rapid 8.0 percent annual pace through 2010 due to their cost effectiveness, versatility and cleanliness compared to loose-fill materials. Demand for insulated shipping containers will increase 5.5 percent per year as a result of needs for the packaging of temperature-sensitive products such as pharmaceuticals, vaccines and diagnostic laboratory products. Bubble packaging demand will grow to $520 million in 2010 due to its competitive cost structure, diverse applications and good protection from shock and surface abrasion. Protective mailer opportunities will reflect labor, postage and inventory savings advantages, as well as expanded purchases from Internet, catalog, retail and other operations. Paper fill packaging advances will be threatened by maturing applications and the rapid growth of inflatable bags, their main competitor. Saturated uses and competition from foamed plastic will similarly constrain paperboard protector growth.

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