July 26, 2016 Big Things In Small Packages

Volume 10 | Issue 1

From its infancy as a cottage industry, Sapeka Indústria, a Brazilian diaper company, has grown by leaps and bounds over the past decade.

Associacao Brasileira de Embalagem (ABRE) or the Brazilian Packaging Association was founded in 1967 to promote the packaging industry in Brazil to stimulate growth and development. The goal has been to bring converters closer to the end-users and stimulate the entire chain to work together, to promote the exchange of information and to identify the main trends of the global market.

The association today represents 250 packaging companies, including raw material providers, machinery producers, packaging converters, design offices and national universities that offer a packaging curriculum.

ABRE has built in the last 39 years a very solid network and today is responsible for representing the sector before the government and industry, for disseminating official macroeconomic data of the packaging industry in Brazil, for representing the country at the WPO (World Packaging Organization) and other international entities, among others, Pellegrino explains.

In 2006 ABRE launched a special publication called the History of Packaging in Brazil. This publication brings an overview of the development of the country, its industry and impact on society in the 20th century, and shows how the national packaging industry had to develop in order to meet demand.

A quality industry
The Brazilian packaging industry follows international standards of quality very closely. At its start 90 years ago, the national president, Fernando Collor, opened the national market for importing goods. By that time, different industrial sectors had to invest in technology and quality in order to remain competitive and capture consumer attention amidst so many international products. And the packaging industry had to do the same. Companies invested in new machinery, usually American and European ones. Nowadays we have a very well structured industrial packaging facility in the country.

What is interesting to note is that Brazilian consumers follow the American life style in terms of consuming behaviors and communication standards. But nowadays we can see many products following the European communication standards, and more sophisticated products targeting the 10 percent of the national population with consuming power.

This issue was the main topic for discussion at the 12th Brazilian Packaging Congress, the international event hosted by ABRE every two years. According to keynote speaker Jacky Charbonneau, packaging consultant from ITC – International Trade Centre (UNCTAD), developing countries such as Brazil, China, India, East Europe and those in Africa should invest in mass production capacity to be competitive rather than in packaging sophistication. These countries will see in the next years substantial growth of packaging demand, she explains, and at the same time the local population will have greater purchasing power and consume more goods. As an example: In Brazil there are 180 million people; 80 percent in the low income segment, who need cheap products and cheap packages. This represents an opportunity of volume growth to the sector.

Production competitiveness is also a key issue, especially in light of the huge amount of imports from China. Asiatic products get into the country with a very low price and undermine national companies. Still, the country’s packaging industry is doing well, as Brazil exports more packaging materials than it imports, but the growth of these activities in the first half of 2006 was 9 percent against 25 percent respectively, representing $304 million exported and $222 million (U.S. dollars) imported in 2005.

Other challenges for the industry include high taxes (37.5 percent of the national GNP), some infrastructure issues such as energy and transport, “informal” economic activity, and strict environment and working legislation, among other matters. In 2006, the packaging segment will have no growth in terms of production volume, and its production value may close around U.S. $14 billion against U.S. $13.3 billion in 2005.

Award-winning innovation
But the Brazilian packaging industry does not give up. It’s great ability to turn around and innovate is huge and brings as a result many differentiated products, packages, and printing technologies, and so on.

As an example, in 2006, seven packages created by Brazilian companies won the WorldStar Award, hosted by WPO, the World Packaging Organization; another three won the German IF Award. And even at the Brazilian Packaging Awards event hosted by ABRE in 2006, 400 packages were evaluated by 30 judges, who showed their surprise in the quality, design and functionality.

ABRE and its members have very intensive international activity and usually participate with a booth or just visit the main packaging trade shows worldwide such as Pack Expo International in Chicago/U.S., Interpack in Germany, Tokyo Pack in Japan, among others. Despite cultural matters that have a huge influence on packaging, in many aspects Brazil’s packaging stands out and is better than that from developed countries. For the flexible packaging industry as an example, the rotogravure system is more frequently used, with the result that unique packages and printing solutions are more widely employed.

Brazil differentiates itself from other countries as well because of the huge capacity of packaging raw material production. The country is home to well-structured companies that produce iron, aluminum, glass, cellulose (paper), and different plastic polymers.

The packaging industry in Brazil employs 174,000 people and is committed to enhance the sector and its products.

The future holds some important challenges: match worldwide compliance rules for security, health and environmental safety standards, while remaining competitive on cost and technology. The world is getting more complicated; packaging must protect products and consumers. The package will be not only a service to consumers, but a lifestyle.

Luciana Pellegrino is executive director of Associacao Brasileira de Embalagem (ABRE).

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