Packaging Industry Registers Strong Growth In Germany

According to the Federal Statistical Office of Germany, 2019 was the ninth consecutive year of growth for packaging machinery manufacturers in this country. The numbers reveal that the approximately 250 mainly medium-sized companies produced packaging machinery worth around EUR7.3bn, an increase of 2%. At the same time the production of beverage packaging machines increased by 4.3% to EUR2.3bn. The production of other packaging machines increased by 1.2% to just over EUR4.9bn.

While the production figures for packaging machinery in the first three quarters of 2019 still showed a total increase of 8%, they fell in the fourth quarter by 10% below the previous year’s figure. The slowdown in demand in the second half of the year was already affecting the German production.

Europe Remains Largest Sales Region

Half of all German packaging machinery exports went to European countries. The delivery volume reached a value of EUR3bn and was thus 3.1% above the previous year. Asia purchased machinery and equipment worth just over EUR1.1bn (+16%) and North America worth EUR886m (+8%). Deliveries to Africa amounted to EUR351m (+1%). Less positive was the development of the export business to Latin America, the Near and Middle East and Australia-Oceania. Exports there fell by a double-digit%age.

USA Largest Single Sales Market

With an export volume of EUR786m (+7%), the USA remained the largest single sales market for packaging machines made in Germany in 2019. China is in second place with EUR451m (+23%), followed by France (EUR309m, +3%), Poland (EUR296m, +9.5%) and the United Kingdom (EUR248m, +18%). Exports to Russia increased by 5% to EUR203m . This puts the country in eighth place among the ten largest export markets, after Spain (EUR234m, up 24.5%) and the Netherlands (EUR219m, up 29.1%).

Outlook: Everything Open

The Federal Statistical Office of Germany believes it is currently impossible to estimate or quantify how the packaging machinery industry will develop in 2020. Due to the weak order activity in the second half of 2019 and, in particular, the drop in foreign orders, the German Food Processing and Packaging Machinery Association already assumed in its November 2019 forecast that production of packaging machinery would decline in the current year.

“The extent of the decline caused by the outbreak of the COVID-19 crisis and the consequences associated with it will only become really clear in the coming months,” said Richard Clemens, managing director of the VDMA Food Processing and Packaging Machinery Association.

Companies are increasingly feeling the effects of the COVID-19 pandemic. In addition to disruptions in the supply chain, especially in Europe, disruptions on the demand side in particular have increased further. There are fewer orders coming from Europe, and also from Asia and North and Latin America. Order intake in the first quarter was down 19% year-on-year.

“However, we are optimistic that demand will recover quickly following the easing of government restrictions. The increasing global demand for hygienically packaged and safe food and pharmaceutical products is a major contributor to this,” Clemens concluded.