By Gerry Mulvaney, European Sales Manager, Landa Digital Printing
I must admit I am the last person in the world to rely on for financial advice and if you ever came to a Nottingham Forest football match with me and followed my example of betting on the final score you would be significantly out of pocket by the end of the season.
With the pickup in the economy, it appears that some investors think that shares in the packaging companies listed on the London Stock Exchange could be a good bet. The shares of most of them have been on a good run in the last few weeks. In their financial results in November, Irish packaging group Smurfit Kappa are suggesting that demand remains strong, despite weak economies in parts of the world.
According to Smurfit, the demand for corrugated cardboard, used in the manufacture of boxes is increasing. And – another good sign – they suggested that recent price increases in the market for cardboard had been accepted by their customers. In the results Smurfit sounded quite bullish and predicted a rise in the volume of packaging sold for the remainder of the year.
A good run on the stock exchange for Smurfit Kappa
The results from Smurfit also had a positive effect on the other big players listed in London – Mondi and DS Smith saw share price increases on the back of positive news in the packaging market. The customers of Smurfit, Mondi and DS Smith are of course the big brands such as P & G, Unilever and Kraft and they see a continued demand for their products in Europe as well as other parts of the world.
Online Buying Trends Positively Impact Packaging Demand
Recent trends have affected the packaging market in a positive way. We are all used to buying goods online. Whether it is eBay or one of the websites of the big retailers, when it is delivered to you it comes in protective wrapping and a box. The more we buy online, the more boxes are used.
The other big trend is the change in the demographics of the population, with more singletons and couples in family units whose shopping habits are different to their parents. Instead of a large weekly supermarket shop, they are shopping online for bulky items and using convenience stores almost on a daily basis. One statistic recently suggested that many people did not know at 4.00 pm what they would have for dinner that night and planned to shop for it on the way home – very different from our mothers’ housekeeping habits.
As I say, I am not offering financial advice. But from what I have seen when visiting Landa Digital Printing and packaging customers in recent months, coupled with publicly available data and statements from the big packaging companies, it could be a good time for a small investment – which is more than can be said for the next Nottingham Forest result! It could also be a good time to introduce a new technology to the sector – just what Benny Landa is planning on doing in 2015!
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