Corrugated Boards – Procurement Best Practices & Sourcing Strategies

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Corrugated Boards Market Global Size:

According to ELINT Market Research’s corrugated boards procurement market research report, in the year 2023, the market’s global capacity was estimated to be 231 MMT, and the associated global demand was recorded at 187 MMT during the same anticipated span. These encouraging numbers demonstrate how corrugated boards are increasingly being used in the transportation processes of a variety of industries, including processed and fresh foods, beverages, personal care, paper products, etc.

Market Definition:

The global corrugated boards market includes manufacturing, supplying, and acquisition processes of cardboard boxes, which help multiple businesses and sectors to transfer their products on regional or international levels. These corrugated cartons can have customized sizes and structures according to the type, weight, and environmental needs of goods.

Major Corrugated Boards Market Drivers:

1. Rising Awareness for Sustainable Packaging of Goods –

A notable growth driver of the worldwide corrugated board industry is the rapidly increasing awareness of environmentally friendly packaging. Currently, the government establishing varying criteria for the safety of food, beverages, and other products during transit, which adds to the demand for reliable corrugated boards.

2. Evolution of the E-Commerce Industry-

The corrugated board industry is seeing growth due to the expansion of the e-commerce sector. Many online retailers are spending money on corrugated packing for their goods so that consumers can acquire them safely and on time.

3. Requirement for Customized Product Packing –

Some specific sectors like medicine and food employ customized packaging of their products to save them from environmental impacts. Also, sometimes other industries like machinery and automobiles are required to deliver weighty products, so they ask corrugated board manufacturers for customized packaging.

Corrugated Boards Market Challenges:

1. Shifts in Raw Material Prices –

A prime challenge that businesses working in the corrugated boards market face is rapid changes in raw material prices. This challenge can impact the whole pricing structure since raw materials hold a substantial share of the total cost of corrugated board production.

2. Adoption of High Maintainance Technologies –

Undoubtedly, technological evolutions make corrugated box shipping easier but at the same time, they cost higher to most of the small and medium size manufactories. Also, after acquiring these digital techniques, executing their maintenance methods is expensive.

3. Fierce Market Competition –

Participants operating in the corrugated packaging sector experience massive competition and face challenges in making their products unique from others. Therefore, this challenge propels them to invest more in the manufacturing of corrugated boxes.

Corrugated Boards Market Opportunities:

1. Environment Friendly Packing Needs –

Rising awareness for environment-friendly packaging solutions is causing great opportunity for the corrugated boards market since sustainable packing materials don’t harm the atmosphere. This opportunity vastly helps board manufacturers to achieve growth in their business.

2. Customized Packing of Goods –

Nowadays, businesses choose customized packaging options to transport their products. In this approach, they even place their brand name on the carton to increase popularity, and also easily protect products from environmental effects.

3. Integration of Technologies –

Integration of smart technologies in goods packaging processes emerged rapidly in the last few years, and this digitalization improving the functionality of corrugated boards. Thus, businesses are investing in packing solutions that include features like real-time tracking, QR codes, temperature adjustment, eye-catching brand names, damaged goods alerts, and much more.

Corrugated Boards Market Segmentation:

1. Different Forms of Corrugated Boards –

Various forms of corrugated boards are a foremost segmenting factor for its market. Purchasers can preferably choose single, double, and triple-wall corrugated boxes as per their particular packaging requirements.

2. Type of End User Industry –

Multiple industries like e-commerce, food, drinks, medicine, electronics, etc., employ corrugated boards for their goods shipping purposes. Thus, this is another primary segmenting factor for the corrugated box market.

3. Applications of Corrugated Boards –

Corrugated boards have a distinct variety of applications including screens, containers, and boxes. Hence, end consumers can choose any type of corrugated board as per their size and structural necessities.

Impactful Cost Component in the Corrugated Boards Market:

The corrugated board manufacturers and their consumers employ one major and impactful cost component to achieve a mutual agreement and financial terms and conditions. This cost component includes raw material expenses, which comprise a substantial 65-75% share of the total production costs of corrugated boxes.

Payment Terms in the Corrugated Boards Market:

Payment terms help enhance financial interactions between corrugated board producers and buyers. The average payment period ranges from 60 to 90 days; during this timeframe, organizations release payments for board suppliers. Moreover, if any businesses have vast corrugated box requirements or a tight budget, they can extend this payment period to 120 days, which functions successfully too.

Contract Period in the Corrugated Boards Market:

The corrugated board factories and purchasers streamline their commercial relations by making contracts for one to three years. In this contract, 65-75% portion of the total price structure is linked to an index that is usually based on pulp or OCC expenses. Further, both parties can make adjustments to cost layouts, according to transforming market dynamics quarterly.

Key Index for Price Determination in the Corrugated Boards Market:

Corrugated board manufacturers employ two key indexes for the correct price determination of corrugated boxes. The first factor is RISI, which provides extensive insights and pricing facts of the global pulp and paper sector, so manufacturers can make the right decisions.

Moreover, the EUWID index offers pricing dynamics and data for the European pulp and paper domain, which help industry participants to be aware of market shifts and place make strategic pricing structures.

Leading Market Suppliers of the Corrugated Boards Market:

Several significant companies operating in the global corrugated board industry which include International Paper, Nine Dragons, WestRock, Mondi, Smurfit Kappa Group, Lee & Man, and Packaging Corporation Of America.