Several plastics packaging companies in Europe have started announcing a hike in their packaging prices due to limited supplies and high polymer costs following a string of force majeure declarations in the area.
Linpac Group, having 18 plants all around the world, with its global headquarters in Featherstone, England, is the latest company to join the league and declare a price rise. In a statement released on June 11, the company said it has no other way but to raise its flexible and rigid packaging prices due to the recent instability in its raw material supply chain, which has caused a sharp rise in its production expenses.
Bart Stubbe, Linpac’s Vice President of Purchasing, said that across the European petrochemical industry, unprecedented production concerns have been reported since March. This, he said, has caused constricted polymer supply. Coupled with rising demand, this has triggered a sharp price increase for both polymers and monomers, making price increases inevitable.
Packaging Prices Rise in Other Regions
Linpac isn’t alone in making such announcements. Earlier in May, Polifilm GmbH based in Germany’s Wermelskirchen, which is the world’s largest suppliers of films for medical devices, pharmaceutical, electronics, food and general packaging, took a similar route.
It blamed packaging price rises of its products on force majeure declarations by polymer producers. The company has already implemented its increased prices on new orders effective from May 1.
Jörg Wingefeld – Technical Films’ Division Manager at Polifilm, said that these force majeure declarations not only triggered an unparalleled increase in raw material prices but also lead to a supply blockage, which affected the company’s customers directly.
Thus, a price hike was the only way out to ensure adequate supply of raw materials to meet rising demands.
Based in Germany’s Montabaur, the famous Klöckner Pentaplast Group also announced increased packaging prices effective from June 1 due to difficulty in acquiring materials in Western Europe.
Though the company took some efficiency improvements to cut down its cost, it was unable to match steep price hikes affecting PET, PVC, polyethylene and polystyrene. Klöckner Pentaplast Group’s Senior Vice President’s written statement resonated the same sentiment where he told the company’s efficiency efforts were just able to partly close the gaps of the cost increase development.
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