ompetition from overseas will continue to challenge Australian packaging suppliers throughout 2008.
Asian countries such as China are able to keep costs low, through a glut of labour, lower standards of living and a favourable exchange rate, but quality is less easily assured.
However, despite this, a higher quality of product is now being made overseas and shipped to Australia presenting a threat to Australian packaging manufacturers and packaging machinery manufacturers as customers of both look to cut costs.
Cryovac specialises in perishable food packaging technologies and is both prey to overseas competition and a producer with overseas factories.
The company’s marketing services manager Gareth Reynolds said, “In some areas I would say that competition is significant.
“Good quality print is now coming in from overseas — high quality graphics. So for some simple barrier laminates or some rigid materials we have seen an aweful lot of competition.”
There is activity in India but the results have not yet hit Australasian shores, he said.
“Retailers want to be able to react to changes in designs and new labels, so a local manufacturer will certainly have the edge on being able to react to lead times.
“Homebranded products, private labels, we are seeing more interest in local supply.
“But there has to be a concern about the ongoing quality of certain kinds of materials.
“However, there are also some very, very good quality materials coming in from overseas.”
Cryovac is a global company that has manufacturing sites in China and India, so can compete directly with materials produced there.
Where it can’t compete adequately, the company has links with proven manufacturers of high quality.
However, smaller Australian manufacturers cannot fight competition head on like this.
The challenge for Australian packaging suppliers will be to maximise quality for a reasonable price, be making the most of technology, and to educate customers that cheaper is not always better.
When asked about overseas competition, Reynolds answered, “I think it is only going to get tougher”.
According to Reynolds, the benefits of buying locally include “security of supply, the fact that you can react to changes in demand and design very easily.
“There’s a lot of security offered by having a local manufacture.
“People also associate an Australian made product with a quality product.”
It will be up to Australian packaging suppliers to put up a good fight.
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