Balance sheet 2021 of the corrugated board industry: strong growth, but extreme cost pressure

The corrugated board industry can report strong growth for its sales in the second pandemic year 2021, with an increase of 6.9 percent. However, massive increases in paper and energy prices continue to put the industry under extreme pressure and reduce the overall balance in 2021, announces the Verband der Wellpappen-Industrie e. V. (VDW) announced at its annual press conference. Currently, the economic impact of the war in Ukraine is further exacerbating the situation for the corrugated board industry, the association said.

"Demand for corrugated packaging was exceptionally high in 2021. The companies organized in the VDW achieved a 6.9 percent increase in sales," explains Dr. Steffen P Würth, chairman of the association. Overall, the VDW recorded corrugated board sales of 8,656 million square meters for 2021, which is 557 million square meters more than in 2020, meaning that the corrugated board industry significantly exceeded its growth target of one percent for 2021, as forecast in December 2020.

"The economy recovered better than expected in the second pandemic year of 2021. This ensured an exceptionally high utilization of our production capacities over long periods," Würth explains. The key factor here, he says, was increased demand for consumer goods such as household or optical appliances. Demand for intermediate goods for further processing in production, such as batteries, accumulators or electronic components, was also higher than in other years. In addition, the corrugated board industry in 2021 was again able to benefit from the continuation of the

E-commerce boom. "In this context, we have always remained a reliable partner for industry and trade, even in phases of peak capacity utilization and despite additional challenges posed by new waves of infection. Around two thirds of all transport packaging in Germany is made of corrugated board. We play a correspondingly important role in the supply chains and have thus made a significant contribution to the recovery of the economy," Würth said.

In 2021, VDW members' revenues rose by 4.5 cents per square meter year-on-year to an average of 57.7 cents per square meter, an increase of 8.5 percent. In terms of sales, the corrugated board industry posted a 16 percent increase. "These are pleasing figures in themselves. However, they are not sufficient to compensate for the massive increase in prices for corrugated base paper and the energy source gas in 2021. We have already been confronted with this development since late summer 2020," emphasizes the VDW Chairman. The VDW-weighted price level for corrugated base paper had increased by around 66 percent in the period from September 2020 to December 2021. Gas prices climbed even higher, according to data from the German Federal Statistical Office, increasing by about 330 percent from August 2020 to December 2021. "The economic effects of the war in Ukraine are now drastically exacerbating the increasingly extreme price pressure on our industry, which has already been going on for months," Würth warns.

Politicians must do everything in their power to ensure a seamless gas supply and cushion any negative economic consequences of the war, he said. "This is the prerequisite for the corrugated board industry to continue to successfully make its contribution to the smooth functioning of supply chains," is the urgent appeal of the association chairman.