MOSCOW (MRC) -- The Russian packaging industry is facing a unique set of challenges in the wake of Western sanctions, as per Packaging-gateway.
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.
In the global landscape, approximately 3.9bn tons of food are produced annually, with roughly one-third of it going to waste. Packaging plays a crucial role in minimising these losses.
Despite efforts to protect the environment and enhance ecological sustainability, the global packaging industry is booming. According to research from Horvath & Partner AG, a Swiss consulting company, the sales of packaging products are expected to grow from $770bn in 2021 to $1tn by 2025.
Most packaging materials for the food industry worldwide are derived from non-renewable resources, primarily polyolefin-class polymers like polyethylene and polypropylene. Polymer packaging, both flexible and rigid, constitutes a significant share of the market both internationally and in Russia.
Over 60% of flexible packaging on the global market is used in the food industry. Experts predict that the global flexible packaging market will exceed $250 billion by 2024.
According to a survey by the Flexible Packaging Association in the United States, 83% of brands currently use some form of flexible packaging. Additionally, 26% of brands have increased their use of flexible packaging in the last five years, with another 31% intending to do so in the near future.
Flexible packaging for food products is prevalent both in foreign countries and in Russia.
We remind, Russia is shipping its first crude oil cargo to Brazil, as it seeks to diversify its list of buyers, which has been drastically limited by U.S. and EU sanctions, LSEG data showed and traders said. Russia has been heavily relying on India and China as main buyers of its crude after European embargo and price cap policies were imposed in December last year after Russia's action in Ukraine that Moscow calls a special military operation.