The Russian packaging industry amid sanctions
Amid sanctions, the industry faces shortages in PET packaging, aluminum caps, moisture-resistant paper labels, and vital production additives. Credit: Tikhonova Yana via Shutterstock
The Russian packaging industry is facing a unique set of challenges in the wake of Western sanctions. Unlike previous crises characterised by universal trends such as decreased demand and reduced purchasing power, the current situation in the Russian packaging market presents distinct hurdles.
Against the backdrop of these sanctions, the industry grapples with packaging shortages, including PET packaging, aluminium caps, moisture-resistant paper labels, and critical additives for production.
Since the beginning of Russia’s invasion of Ukraine, numerous companies have divested or sold their packaging operations in Russia. These include Heineken, Mondi, and Smurfit Kappa.
These pressures are compounded by regulatory scrutiny, which is focusing on restraining prices not only for polymers but also for packaging and products themselves.
Smurfit Kappa and Westrock merger could produce ‘industry giant’
Irish paper and packaging company Smurfit Kappa Group has confirmed advancing discussions regarding key terms of its potential merger with American corrugated packaging company Westrock.
Benher Gracio, business fundamentals analyst at GlobalData, a leading data and analytics company, offers his view: “A potential merger of Smurfit Kappa and Westrock will see the emergence of a top global paper and packaging player with strong operational synergies, as the two companies have identical business models.”
“While WestRock has a strong manufacturing presence with 145 facilities primarily concentrated in the Americas, Smurfit Kappa has over 350 facilities, with the majority of them located in 23 European countries.”
Nestlé accelerates transition to sustainable packaging
Nestlé is stepping up its efforts to embrace sustainable packaging. In a recent announcement, the company revealed new actions and progress towards creating a waste-free future.
Nestlé has set ambitious targets, aiming to make 100% of its packaging recyclable or reusable by the year 2025. Additionally, the company aims to reduce its use of virgin plastics by one-third during the same period.
As part of its commitment, Nestlé has introduced a range of new initiatives. These include a $30m investment in increasing the availability of recycled plastics for food use in the United States.
Nestlé has already made substantial progress, with 66% of its plastic packaging already being recyclable or reusable.
UK delays packaging recycling payment rules amid economic pressure
In a move aimed at easing the economic strain faced by consumers and businesses in today’s challenging economic climate, the UK government has announced a one-year delay in implementing new rules that require packaging producers to cover the recycling costs of their products.
Originally scheduled to commence in October 2024, these regulations will now take effect in 2025. The decision to defer the implementation of these rules comes after extensive consultations and collaboration with industry stakeholders.
During this additional year, the government plans to continue discussions with industry leaders to refine the scheme’s design and explore opportunities for reducing implementation costs wherever feasible.
UK implements new restrictions on single-use plastics
Effective from October 1st, 2023, England took a significant step in its fight against plastic pollution with the introduction of new regulations banning several single-use plastic items.
In a bid to address the escalating problem of plastic pollution and litter, the UK government has implemented a series of bans and restrictions on single-use plastic items, taking effect on Sunday, October 1st, 2023.
These measures, announced in January, will prohibit the sale of single-use plastic cutlery, balloon sticks, polystyrene cups, and food containers across various sectors, including retailers, takeaways, food vendors, and the hospitality industry. Restrictions will also be placed on the supply of single-use plastic plates, trays, and bowls.