China's packaging industry is currently undergoing a growth rate
that is set to turn the sector into one of the country leading
In the pharmaceutical sector, one of the key drivers for growth
in the future is the country's recent adoption of Good Manufacturing
Practice standards, which has hiked the compliance requirements for
packaging companies serving the drug industry.
In the past, pharmaceutical packaging in China was often below
international standards in terms of its resistance to factors such
as humidity and ultraviolet light, which compromised the shelf life
of medicines. Now, the development of the country's pharmaceutical
industry with turnover up 19 per cent to 32.7 billion in
2002 and the development of an export industry has prompted a
hike in standards.
According to market specialists Access Asia, China's packaging
industry is enjoying steady and significant growth, with an annual
growth rate of 18 per cent in 2001. This has meant that the industry
has emerged as the country's 15th largest industry - up from a lowly
40th place the previous decade and a welcome recovery after a sharp
slowdown at the end of the 1990s.
As China's packaging industry has developed, so the country's
packaging machinery industry has grown. China currently has some
1,600 local packaging machinery manufacturers, 25 per cent of which
are classed by the government as 'large operations' (with more than
1,000 employees), 35 per cent 'medium-sized' (300-1,000 employees)
and 40 per cent 'small-sized' (with fewer than 300 employees).
These companies can produce roughly 2,700 of the 4,000 types of
packaging machinery currently manufactured in the global market, a
figure that just 10 years ago would have been thought inconceivable.
Indicative of the importance of the China market is the fact that
UK trade body Packaging & Processing Machinery Association now
has an office in Shanghai, China. The office, which was pioneering
when it opened in 1999, is designed to offer a bridge between UK
equipment suppliers and Chinese manufacturers.
"We were the first foreign trade body to set up a China
office," said PPMA secretary Andrew Manly. "We are still
gathering momentum with our operation, but have also achieved a
great deal to encourage UK machinery suppliers to make moves on this
market, which is now the largest in the world.
"Currently most of the imported equipment in China comes from
within the Asia Pacific region, with suppliers from Taiwan and South
Korea being amongst the most successful," he noted, adding that
this is mainly because of their proximity to the market.
"The normal approach for a western manufacturer is to find a
manufacturing partner. This procedure can throw up challenges, but
that is what we are there for, to enable the process is smooth and
as trouble-free as possible," said Manly.
The fact that the domestic industry is still relatively young and
undeveloped means that a great deal of the market for packaging
equipment suppliers is still fed by established western players. The
US Commercial Service estimates that China imported in the region of
$800 million (650m) worth of packaging equipment into the country in
2002, a figure which had grown to $1 billion by 2003.
The US government body states that generally basic equipment is
sourced from the domestic market, whereas more advanced equipment is
sourced from overseas manufacturers. Accordingly, China packaging
firms are said to be prepared to pay a sizeable premium for
foreign-made equipment, given that it is generally deemed to be more
reliable and faster.
"Although the China machinery market is still relatively
basic, progress in this market has proved rapid and is likely to
continue in the future," said Manly. "We were saying much
the same thing about the Taiwan and South Korean markets just ten
years ago, and now suppliers there are amongst the most advanced in
Bolstered by surging demand, China's packaging machinery industry
has helped to fuel development in the packaging industry itself.
Today, there are more than 20,000 packaging companies employing well
over three million employees across the country.
The Access Asia report highlights every area of the packaging
industry, including the food and beverage, pharmaceutical and
cosmetics sectors. It also details the leading players in the
packaging equipment market, as well as outlining various studies in
macro and micro economics which are directly related.