Packaging Consumption Rises Compared to Last Year

With the pandemic, Turkey seized important export opportunities in many production-based sectors. Exports from the increasingly attractive packaging sector rose 11% in the first half of the year. Particularly alongside the acceleration in e-commerce, a significant increase is expected in the need for single-use paper, cardboard and packaging materials. However, the figures remain uncertain. Since the early months of 2020, the coronavirus pandemic, which the entire world has been combating, has caused critical stagnation in some sectors while creating new opportunities in others. The packaging sector has been at the forefront. During this period, when contact in shopping has been minimized due to transmission risk, the acceleration in e-commerce increased packaging consumption. According to data from the Packaging Manufacturers Association, the total packaging sector exports in the first half of 2020 rose 11% compared to the same period of the previous year, reaching USD 2 billion 414 million 219 thousand. The sector has turned not only the coronavirus but also recent exchange rate increases to its advantage. In assessments regarding the issue, ProjePack CEO Altuğ Akça stated: "Turkey has become an important source especially for corrugated cardboard consumers in Europe thanks to its cost advantage during this period. The increase in exchange rates and lockdowns have significantly increased the trade in pizza boxes shipped to Europe. With its quality, technology and production capacity in packaging manufacturing, it has begun taking significantly more market share from Chinese producers. As long as the cost advantage continues, Turkish producers will capture a larger share of Europe's consumption market. They will be ahead of producers like China. However, it must not be forgotten that the cost advantage may be temporary. Because the sector, which is experiencing raw material shortages due to the breakdown of the waste chain in scrap collection and paper production, risks being unable to fully utilize the acceleration it has gained. What matters is making our production quality and technology the reason we are preferred."

E-commerce acceleration could double paper and cardboard packaging consumption

Drawing attention to Turkey's share of paper and cardboard packaging exports within the packaging sector, Altuğ Akça stated: "Looking at data from Turkey's General Directorate of Exports, paper, cardboard and corrugated cardboard products rank among the most important branches of the packaging sector, and the majority of production is in this area. Paper and cardboard packaging products stand out with a 24.4% export share. We expect paper and cardboard packaging exports, which approached USD 1.2 billion last year, to reach USD 2 billion with the impact of e-commerce. As ProjePack, we have so far provided services primarily in heavy industry and automotive sectors. Following the pandemic impact, the spread of online commerce and acceleration in cargo services have brought packaging consumption to a considerable level. Our forecast is that Turkey's online commerce share, currently at 6%, will reach around 12% in the coming days, showing 100% growth, and paper and cardboard packaging consumption will double. We also want to capture our maximum share." he said.

Uncertainties have not been eliminated

Mentioning that alongside positive forecasts, variables such as personal hygiene, e-commerce and sustainability concerns also bring uncertainties, Akça stated: "The way many hygiene products such as masks, gloves, cleaning papers and disinfectants are stockpiled can change depending on regulations set by countries and consumer behavior. The gains that e-commerce acceleration has brought to the sector are very valuable. However, when the pandemic ends, it is still unknown to what extent consumers will return to their old habits. Another point is both citizens' and companies' sustainability concerns. Before the outbreak, many topics such as nature conservation, reducing plastic pollution and zero waste targets were on the agenda, but hygiene concerns increased the use of single-use plastic products. Currently, the aim is to reduce the amount of plastic in these products by combining them with paper and corrugated materials, but how much this will be implemented depends on how sustainability expectations will shape." he said.

The sector needs project-based competition, not price-based

Expressing that the sector's potential must be used correctly and the acceleration gained must become sustainable, Altuğ Akça stated: "ProjePack has been operating since 2013, and with our team of 50 people and a facility with 5,000 m² of covered space, we provide services. Over the past 4 years, we have doubled our sales every year. In light of our experience, what we see is that we need to go beyond factories that can produce. In other words, there is a need for structures that both produce and provide services. This way, price-based competition can be replaced with project-based competition in the sector. We can both use our potential efficiently and ensure that the acceleration we have gained is permanent." he said.

A first in Turkey is being prepared

Saying that the sector's movements have taken the company's activities one step further, Altuğ Akça stated: "As ProjePack, we broke our own records by increasing both our export figures and our sales in the domestic market with the services we provide to exporters. We set new records in September and October as well. Foreseeing the developments awaiting us in the sector in July, we had made new investment decisions. In this context, with our latex-based 8-point adhesive application machine to be installed in January, we plan to set a first in Turkey. From January 2021 onwards, we will increase our capacity by 40%. With this innovative project that features serial and automatic installation patented by our company, we plan to provide environmentally conscious, innovative products to the sector." he said.