China & India: Flex-Pack Leaders?

Published: October 01, 2007, By By Stanley Sacharow Contributing Editor

Package Converting

China's been in news lately, and it hasn’t been about Ming antiques! It seems China has become a hotbed of shoddy products. From formaldehyde in blankets to lead toys to diethylene glycol in toothpaste, there has been universal outrage over the seemingly poor quality control of Chinese products.

This is in direct contrast to what I’ve been hearing at worldwide packaging conferences I’ve attended over the past several years. Packaging pundits have praised China’s quality and predicted that both China and India are exerting an influence over the flexible packaging industry that is growing by at least 5% annually. PCI Films Consulting predicts that between now and 2010, half the world’s growth in flexible packaging will be in China and India.

Obvious reasons for this rapid growth include middle-class domestic growth, strong exports, and competitive prices. But how will this shake out if China’s quality control issues follow into theflex-pack industry?

My personal experience in the Chinese flex-pack industry is based on more than ten visits to various converters in the past decade. At a converter in Guong-Zou, (a short flight from Hong Kong), I observed etched gravure cylinders stacked vertically in a random manner, complex laminators on upper floors without elevators, overall plant disorder, excessive staffing, and rudimentary quality control. The air outside was thick with pollution, and plant hygiene was questionable. At another converter in the north, I saw a lack of quality control records and poor recordkeeping. Yet these companies were staffed by skilled people fully conversant and experienced in the industry.

Perhaps these firms are not the norm; perhaps many others follow the strict standards that international converting demands. But as China roars ahead and pollution reaches deadly extremes, I wonder: Can and will there be a fallout in overall flex-pack quality?

India is a different story. I’ve also visited many converters in India and observed a variance of plant quality, but unlike China, India is generally unhampered by linguistic problems and is more western leaning than China. Its flex-pack converters are more international in their outlook and often maintain worldwide offices. They frequently win packaging awards, and their record of quality defects is about the same as that of converters worldwide—even though there is a significant amount of air and water pollution.

One problem hampering flex-pack growth in both India and China is the overall lack of supermarket structure. Stores tend to be small, and there is a fairly large “black” economy with unreported statistics and poor packaging.

The key to both China’s and India’s growth is the building of a complex supermarket infrastructure coupled with strategic plans for pollution control.

Personally, I think flex-pack converters should look toward other areas for opportunities. Chile and Argentina produce superb materials that rarely enter worldwide markets. Nations as diverse as Mexico, El Salvador, Peru, and Costa Rica have converters that equal the best in the world. With a strong sales plan and somewhat better communication infrastructure, these nations can export and grow.

Last but by no means least is Turkey. Blessed with an envious geographical position straddling both Europe and Asia, Turkey has many excellent converters and plastic film suppliers. Turkey’s OPP and PE industries are strongly developed. Already supplying a strong domestic market and many Eastern/Central European nations, the Turkish flexible packaging industry needs a strong international campaign to let the world know of its capabilities.

It is also important to note that both Turkey and Latin America have fully developed supermarkets that stock a wide variety of packages.