FTA Issues 2002 Business Forecast
North America’s more than 6,000 flexographic printing establishments will produce in excess of $85 billion of printed work in 2002, according to estimates by the Flexographic Technical Association (FTA).
FTA is forecasting that growth of the flexographic printing industry will outpace the performance of the gross national product, coming in between 4 percent and 5 percent, as compared to slightly less than the 2 percent improvement expected in the U.S. government’s benchmark index. In 2001, flexo grew by approximately 6 percent, and now controls 74 percent of the North American package printing market, as well as 24 percent of the worldwide printing and publishing market.
In a business-based analysis of the size and scope of the industry, presented in December to the FTA Board of Directors, FTA president Mark Cisternino reported, “Forecasts within the food packaging and pharmaceutical marketplace continue to show strong growth expectations. Ongoing developments in flexible packaging substrates and converting application technology have contributed to the healthy market gains of the past few years and will continue to do so in 2002. A major trend toward cost reduction throughout the flexographic production process has been necessitated, due to the heightened demands being put on printers by consumer product companies to maintain or reduce pricing levels in order to keep the business.”
Market Segments Studied
Corrugated/preprint production will lead all flexographic business segments in terms of the value of product produced, according to FTA research. Revenue should total $29 billion, representing 34 percent of the industry’s volume. Some 1,400 facilities produce flexographically printed corrugated boxes and preprinted linerboard within North America. FTA’s corrugated converter members report that they are being asked to provide additional services, meet increased demand for shorter delivery cycles and enhanced graphics and maintain competitive costs.
Flexible film packaging will lead all sectors in terms of percentage of growth charted in 2002, the FTA reported. Volume is expected to amount to $20.4 billion, representing growth of 3.5 percent to 4 percent. Flexible film packaging will control 24 percent of the flexo market. Some 950 North American printers/converters engage in the process. Flexible packaging will continue to gain market share as it replaces rigid containers. Above average growth levels are being credited to continued utilization of new substrate structures in the soft drinks, beer and food categories.
The folding carton sector represents a tremendous opportunity for flexography, the FTA stated. At present, less than one-quarter of all output is printed flexographically and 125 plants produce the materials. Still, the sector represents 19.3 percent of flexographic printing revenues, with 2002 business expected to translate to $16.5 billion. Use of UV inks and increased reliance on flexo’s in-line converting capabilities continue to influence flexo’s growth.
North America’s 3,000+ label printers saw volume grow by 3 percent to 4 percent in 2001, but increased competition and tight operating budgets contributed to a small erosion in margins. Revenue is estimated at $10.5 billion in 2002, an estimated 12.3 percent of the flexo printing business. New labeling regulations in the pharmaceutical industry, soon to take effect, will definitely drive growth. FTA forecasters are predicting a return to historically higher levels of 5 percent or better within one year’s time. Envelope shipments will remain sluggish through the majority of 2002. Revenue is forecasted at $3.8 billion. Volume growth will approximate 1 percent. Some 260 converters print envelopes flexographically. Work turned out represents 4.5 percent of flexographic print volume. Paper bags and multi-wall sacks are seen as a flat market segment for 2002. Revenue will remain at the $3 billion plateau and account for 3.5 percent of the flexo market.
The number of newspapers printed flexographically continues to rise and now stands at 45. Revenue approximates $2 billion in this segment and accounts for 2.4 percent of the flexo printing industry volume. Daily newspapers that recently converted to flexo include The Lincoln Star Journal, Lincoln, NE and The Boston Herald, Boston, MA.