Soaring polymer prices, along with higher costs for energy and transportation, are placing an increasing burden on the packaging sector, plastics packaging industry associations in France and Germany say. Prices currently being asked by polymer suppliers are “unreasonable,” Alix Hubin, president of the French packaging industry association Chambre Syndicale des Emballages en Matiere Plastique (CSEMP, Paris; www.packplast.org), asserts. Packaging producers, she says, are being confronted with escalating costs in all segments of their business.

Ulf Kelterborn, managing director of the German packaging industry association IK Industrievereinigung Kunststoffverpackungen (Bad Homburg; www.kunststoffverpackungen.de), says his constituents are facing a similar situation. He sees a “real avalanche” of new costs descending on the sector. IK estimates that raw materials now account for as much as 70% of overall production costs for finished packaging. Keltenborn adds that the association’s members will have no choice to raise their own prices. However, as undoubtedly not all costs can be passed on, packaging producers at the same time will see a further deterioration of earnings.

Since the beginning of 2004, plastics prices have been continuously on the rise and have reached a structurally higher level, as Hubin points out. While conceding that it is normal to pass costs along the production chain, at the same time she has appealed to polymer producers to strike a better balance between their own higher costs, the economy generally and the health of companies farther downstream. The higher the prices for polymers go, the less able packaging producers will be to meet their budgets for R&D, new materials and applications now and in future, Hubin remarks.