Folding carton printing and converting in packaging markets

By Patrick Henry

What Keeps Them Up at Night—or at Least During the Daytim

The folding carton printers interviewed for this story face mostly the same agenda of business issues as the managers of other kinds of printing businesses. Two items of special interest in their segment—competition from offshore packaging manufacturers, and paperboard supply—came up in the conversations.

Pitts isn’t troubled by the presence of overseas rivals in his primary markets. In fact, he says, “we’re seeing more of it come back” as customers re-shore their package production because of concerns about quality and delivery delays. Sharply rising labor costs in China means that any economic benefit of producing cartons in that country “starts to fade away very quickly,” says Tsai.

Iannuccillo notes that overseas packaging producers frequently don’t face the kinds of regulatory and quality requirements in their home countries that U.S. printers have to deal with every day. This means, he says, that the complexity of RFQs for domestic packaging tends to eliminate unqualified foreign producers from the bidding process.

As for paperboard, Iannuccillo says that as mills and paper converters have taken some of their less efficient equipment offline, resulting in the lead times for ordering and delivery creeping up. Wright agrees that during the past two months, paper backlogs have become “problematic.”

“We see lead times out to nearly eight weeks on some substrates,” he says. “Every substrate has seen at least one price increase, and a second has been proposed. All I can say is that history indicates that this is another cycle.”

Tsai, who says he has absorbed two paperboard price increases this year, expects the industry to be hit with a third before the year is out. He says that the first two increases, coming just months apart, raised his substrate cost by about 2 percent.

Input costs continue to go up across the board, says Scherger, who adds that “commodity inflation is a very real challenge to the industry.” Also not to be overlooked, he says, is the escalation of labor costs as packaging producers deal with finding “less talent with the skills we need.”

Long after predictions about other kinds of printing have come to pass or failed to materialize, folding cartons will still be doing their time-honored job of bringing consumer products safely, efficiently, and attractively to market. The folding carton manufacturing industry has always benefited from this stability of demand, rising and falling more or less predictably with general trends in the consumer economy.