Market researcher Smithers Pira predicts that the global packaging industry will be worth more than $1tn by 2024
Some of the world’s biggest packaging businesses have begun to release their 2019 company results in recent weeks.
The past 12 months has seen the industry having to adapt to a changing marketplace, with demand for more sustainable materials becoming ever more prevalent.
Despite the challenges, the market is anticipated to grow stronger over the next few years.
According to market researcher Smithers Pira, the global packaging industry will be worth more than $1tn by 2024.
It’s likely that companies such as Crown Holdings and International Paper will be some of the main driving forces behind this growth.
We look at how these businesses, among others, performed in 2019 – ranking each by operating profit.
Best packaging company results in 2019 based on operating profits
1. International Paper – $2.5bn
US-based pulp and paper firm International Paper recorded an overall operating profit of $2.5bn in 2019.
Although more than $1bn higher than any of the other companies on this list, it’s a drop of almost $500m from the $3bn figure in 2018.
Overall, the business reported net sales of $22.3bn.
International Paper chairman and CEO Mark Sutton said: “International Paper delivered solid earnings and outstanding cash generation in the fourth quarter and full-year 2019.
“We again demonstrated our flexibility to navigate through challenging market conditions by optimising our full value chain.
“In 2019, we returned $1.3bn to shareholders and reduced debt by $1bn, while continuing to strengthen our packaging business through targeted investments.
“We are delivering commercial wins and will continue to tightly manage costs, capital spending and working capital to generate strong cash flows in 2020, despite earnings headwinds.”
2. Stora Enso – $1.4bn
Finnish pulp and paper product manufacturer Stora Enso recorded an operating profit of €1.3bn ($1.4bn) in 2019.
This is a drop of about 6% when compared to 2018, when the company reported figures closer to €1.4bn ($1.5bn).
The firm’s sales went down by more than 4%, going from €10.4bn ($11.4bn) to €10bn ($11bn).
Its fourth quarterly results also dropped significantly, with its sales revenue falling by more than 9% when compared to the same period in 2018.
Stora Enso president and CEO Annica Bresky said: “2019 was concluded by a challenging quarter characterised by demanding market conditions, especially significantly lower pulp prices.
“We have focused on what we can impact – our costs, cash flow and managing value over volume.
“We are satisfied that we were early out with our profit protection programme.
“It is proceeding ahead of plan and the total implemented cost saving amounted to €150m ($165m) in 2019.
“We will now continue to work on the areas that we can control, to be prepared for a more profitable future when the cycle turns.”
3. Crown Holdings – $1.1bn
Crown Holdings reported an “income from operations” figure of $1.1bn in 2019, a $100m increase compared to its 2018 results.
Overall, the the US-based metal beverage and food can manufacturer recorded net sales of $11.6bn, a jump from the $11.1bn it earned in the previous year.
Crown Holdings’ president and CEO Timonthy Donahue said: “In 2019, the North American beverage can industry grew at its fastest pace in 25 years.
“This expansion was driven by a growing proportion of new beverage products being introduced in cans versus other packaging formats, which is expected to continue.”
4. Smurfit Kappa – $1.1bn
Smurfit Kappa recorded operations profit before exceptional items of €1bn ($1.1bn) in 2019.
This is a 4% drop for the Irish cardboard manufacturer when compared to 2018, where it reported figures of €1.1bn ($1.2bn).
Overall, the firm’s revenue of €9bn ($9.9bn) in 2019 is a 1% increase when compared to the €8.9bn ($9.7bn) result it hit the year previously.
Smurfit Kappa CEO Tony Smurfit said: “Across 35 countries, we continue to create market leading innovative solutions for over 65,000 customers, delivering sustainable and optimised paper-based packaging.
“The 2019 outcome also reflects our performance culture, which has, at its core, an unrelenting customer focus.
“During the year, we continued to strengthen our integrated model, following the acquisition of Reparenco in 2018, and our more recent acquisitions in France, Bulgaria and Serbia.
“These acquisitions significantly enhance our business and further expand our geographic reach.
“As with previous mergers and acquisitions, the new teams have integrated well and further strengthen the depth and quality of the group.”