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Analysis

Record year for tubes expected

By NEWS SYSTEM
Published: March 25th, 2008
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Following its record year in 2006, the European tube market is likely to announce a further record for last year. In the first half of 2007, the industry’s shipments rose by about four percent to a total of 5.3 billion aluminum, plastic and laminate tubes.

The European tube industry has full order books and is making excellent use of production capacity. As a result, delivery times for certain types of tubes and specifications may be as long as 20 weeks. Expecting continued healthy demand in the years ahead, the industry is responding to the current positive cyclical trend by investing in expansion.

There are a multitude of reasons for the full order books in the sector. On the one hand, demand is fueled by the customers’ numerous relaunches coupled with ever shorter product life cycles. On the other hand, tubes are replacing bottles, dispensers and other packaging in industries such as cosmetics, body care products and food. Successful examples of these substitution shifts are body lotion and shampoo as well as herbal butter from a tube. The industry continues working busily to develop new markets for tube packaging.

There is a definite trend towards tubes with increasingly high-grade features, not just for cosmetics and dental care products but also in the pharmaceuticals industry. These are the three key sectors for the tube industry, accounting for about 85 percent of total business. The pharmaceuticals industry is also opting for increasingly elaborate tubes for its non-prescription over-the-counter products to motivate customers to buy its products.

At the same time, ever shorter product life cycles and relatively small batches are forcing tube producers to adapt flexible production approaches that are increasingly complex. Add to all this the pressures on margins from rising raw material, energy and transport costs and it is no wonder that leading European tube manufacturers say that profits have to improve if the sector is to sustain its powers of investment and innovation in the future.

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