ETMA credits cosmetics for tube packaging uptick despite “cocktail” of economic troubles

12 Sep 2022 --- Deliveries of aluminum, laminate and plastic tube packaging products rose by 1% to around 6 billion units in the first half of 2022, according to the latest release by the European Tube Manufacturers’ Association (ETMA). While aluminum tubes reportedly increased by just under 1% and plastic tubes by about 2%, laminate tubes declined by almost 4%. Cosmetics and pharmaceuticals were the driving contributors.

Laminate and aluminum tubes accounted for 36% each of ETMA members’ deliveries. The share of plastic tubes was at 28%.

This upward volume trajectory comes despite the challenging economic conditions Europe is currently facing due to the energy crisis. The increased energy prices are accompanied by a loss of purchasing power among European consumers due to inflation and fears of recession.

“The unpleasant cocktail of difficult economic conditions will have a lasting impact on the lives of European tube manufacturers and consumers this year and certainly next,” says Mark Aegler, president at ETMA.

Cosmetics and pharmaceuticals drive demand
ETMA credits the positive volume development to the increase in demand of almost 2% from the cosmetics market, which dominates in volume.

Demand from the pharmaceutical sector, the second largest sales market, also developed positively, increasing by 8%.

In contrast, deliveries to the dental care market, the third largest sales segment, fell slightly by just under 2%.

These three markets together account for about 85% of total deliveries. The remaining 15% is accounted for by household products and food, which declined sharply in the first half of 2022, falling by almost 15% and 10%, respectively.

The demands on the tube industry in terms of sustainability remain high even though the energy crisis currently outshines all other issues.Continuing energy threats
Last week, in a letter to the European Commission (EC), nearly 50 metal industry associations said their industry would face a “life-or-death” moment this winter.

The letter claims that half of the EU’s aluminum and zinc capacity has already been forced offline due to the power crisis.

Significant curtailments in silicon and ferroalloys production and further impacts throughout the copper and nickel sectors are also occurring. In the last month, several companies have had to announce indefinite closures and many more are on the brink.

“Production is being slashed across the EU, mainly because of the skyrocketing energy costs, but also because of lack of adequate indirect costs compensation schemes or incentives to sign long-term power contracts. We fear that we haven’t seen the end of this worrying trend yet,” Kelly Roegies, communications manager at European Aluminium, told PackagingInsights.

Mirroring the sentiment, Aegler underscores: “Skyrocketing electricity and gas prices are causing ETMA members great distress, and there is no end in sight to this alarming trend. A further worsening of the situation could lead to a situation threatening the existence of some members.”

As Europe faces uncertainties regarding Russian gas supplies, in August this year, Evonik substituted up to 40% of natural gas with liquefied petroleum gas (LPG) and coal alternatives at its German sites which produce personal care chemicals.

“Gas is an important raw material and a source of energy for the chemical industry and thus also for the personal care industry. We have taken measures to supply our customers in the best possible way even in challenging situations,” a spokesperson at Evonik previously told PersonalCareInsights.

Russia has kept gas supply “intentionally as low as possible, despite the high gas prices,” underscored Ursula Gertrud von der Leyen, President of the European Commission, in her statement urging member states to save gas for the coming winter.

By Radhika Sikaria

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