Cartonmakers Must Accentuate Positives

McGuinness credits cartons' economic lag to continuing overcapacity and resulting price wars, which have mired profit margins in a level substantially below those of other industries. Further hampering cartons' progress, he says, is the perpetuating tendency of U.S. suppliers to use technically dated, fully depreciated equipment. (European plants have an average equipment age of 7 years compared to 13 years in U.S. plants.) Low profit margins from old equipment ultimately lead to an inability to generate capital for new technology that would improve efficiencies and margins.