Corrugated Box Making Machines Market

Market Overview

The global corrugated box making machine market size was valued at USD 2,634 million in 2018 and is anticipated to reach over USD 3,200 million by 2029, with a CAGR of around 2.9%.

The corrugated box making machine market report entails the study of different types of machines or components used in the corrugated box manufacturing production line. The market is comprised of automatic and semi-automatic machines. Several companies offer automated production plants a piece of all necessary equipment, including conveyor, roll mill stand, single facer, folding and gluing machine, slotter, and cut-off stacker, among others. FFG is the most advanced and expensive machinery in the corrugated box making machines market, and folder gluer machine is used for folding and gluing several materials, including metalized films, corrugated boards, and plastic, for transforming them into a box or envelope. The flat corrugated material gets folded along pre-creased lines with adhesive to hold it together. Some of the leading companies such as Bobst offer folder gluer products with a number of features including die-cutting, printing, and feeding, while others such as Shanghai Eternal Machinery and MMIT offer only folding gluing machines with different capacities.

Market Dynamics

Corrugated Box Making Machines in the Maturity Stage of Life Cycle, Characterized by a Large Number of Manufacturers in the Marketplace and Stagnant Demand 

The global corrugated box making machines market is fragmented and comprises a number of manufacturers. Though demand for corrugated boxes is significant, the demand for corrugated box making machines is stagnant. Existing players may face competition from late entrants. For instance, Aopack entered the box making market in late 2014, and since then, it has continuously launched new box making machines, intensifying competition in the market. Thus, marketing efforts from existing manufacturers must remain strong and emphasize the distinctive attributes of the product. The corrugated box making machine market is not expected to witness any radical innovations during the coming years and is largely dominated by a few firms.

e-Commerce to Stimulate Demand in the Corrugated Box Making Machine Market

There has been a considerable surge in demand for retail goods such as clothing, consumer durables, and groceries, originating from regions that either require immediate or long-duration transportation. This leaves the goods in question vulnerable to significant damage, which creates demand for efficient packaging. Corrugated boxes protect goods and are lightweight compared to wooden packaging. Growth in the retail sector is likely to lead to an increase in the demand for consumer goods, resulting in the growth of applications for corrugated packaging. This is likely to provide a considerable boost to the procurement of corrugated box packaging machines. Growth in disposable income as a result of higher employment is likely to spur the retail sector. There has been significant stability in terms of unemployment after it witnessed a rise in 2016. The global unemployment rate was at around 5.6% in 2017 and 5.5% in 2018. Furthermore, growing internet penetration, deep discounts, attractive packaging, and product bundling are some of the factors leading to the growth of this sector. For instance, in 2016, over 76% of the U.S. population used the internet, while the number was considerably higher in other economies such as Malaysia, Spain, France, and Japan, accounting for 79%, 81%, 86%, and 93%, respectively, of the total population. These aspects are likely to spur the growth of the retail and e-commerce sectors, leading to an increase in the need for efficient and light packaging.

Availability of Numerous Alternatives Hampers Demand

Corrugated boxes, unlike cardboard boxes, take up a significant amount of space; even a relatively smaller package takes up significant space. Corrugated boxes also differ from carboard boxes in terms of weight. These boxes, though lighter than wooden boxes, weigh significantly higher than cardboard boxes. An increase in the movement of goods and products, owing to the rapid growth of the e-commerce industry, has led prominent goods carriers such as FedEx and UPS to implement dimensional weight pricing to cut down package size. This means that the pricing will be based on volume versus the actual weight and hence, a bigger box will cost higher even if the product which is to be transported is lighter in weight. This has compelled many packaging manufacturers to produce alternatives for corrugated boxes such as self-sealing boxes, suspended packaging, and retention packaging, among others. Furthermore, some packaging manufacturers have taken to creating packaging from agricultural waste to appeal to environment-conscious consumers. These developments are likely to hamper the market growth. However, investments in R&D can lead to the development of better machinery and ultimately, stability in the demand with regards to changing market dynamics.

Regional Analysis

China Dominates the Global Corrugated Box Making Machine Market 

China is one of the leading consumers of corrugated box machinery across the globe. This is majorly attributed to the presence of local players such as Shanghai ChaoChang Techpack Machinery Co. ltd and Kingsun. The country is witnessing high demand from various end-use industries such as electronics and consumer, and packaging. China's corrugated box making equipment industry is an inevitable part of manufacturing sectors, which depend heavily on corrugated packaging for finished goods transportation and handling. With favorable trading policies regarding machinery manufacturing in China, several key players in the country planned to increase production volume in 2018. The new technology in box making machinery will drive the demand for corrugated box making machinery. For instance, Aopack, a professional box machine manufacturer, has invested USD 1 million to develop new technologies for the production of corrugated box machines. China has generated significant revenue from the sale of corrugated boxes through e-commerce and is likely to experience further growth with the rising number of online orders.

According to the International Trade Administration, China is the world’s largest e-commerce market as it accounts for over 50% of all transactions. In 2018, e-commerce sales in China reached USD 1.33 trillion, and this figure is expected to reach USD 1.99 trillion by the end of 2019. China's market is projected to undergo a considerable change from its current fragmented structure to a more consolidated one, which would drive the demand for better quality corrugated box making machinery and support services. The demand for retail corrugated packaging is also anticipated to increase with the growing number of supermarkets in the country.

Segmental Analysis

Food and Beverage — The Largest Consumer of Corrugated Boxes

The food & beverage segment was valued at USD 1,348 million in 2018 and is expected to grow at a CAGR of 2.8% during the forecast period, 2019–2029. Corrugated boxes are widely utilized in the packaging of different food and beverage products. Increasing demand for sustainable and safe packaging from the food industry is driving the corrugated box making machine market growth.

The boxes manufactured by using machines are used as shipping containers in the food and beverage industry for delivering different items since they provide strength, durability, lightness, recyclability, and cost-effectiveness. Besides, players in the food-tech space, such as FoodPanda, Zomato, TinyOwl, and Swiggy, are excessively using corrugated boxes for delivery purposes. The online food industry delivered 150% year-on-year growth with an expected gross merchandise value (GMV) of USD 300 million in 2016. This exponential growth is likely to result in an increase in demand for corrugated box packing machines to cater to the demand from this segment. Corrugated boxes are witnessing high demand for packaging from the food and beverage industry because of their extended shelf life, consumer convenience, and economical packaging. According to Germany Trade and Invest, food and beverage is Germany’s fourth-largest industry. It generated a production value of USD 197.83 billion in 2017. Additionally, the expanding retail sector, along with growing demand for ready-to-eat food items, is expected to supplement the overall demand for corrugated boxes.