Corrugated Board Procurement Intelligence Report, 2023 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

Every organization and its procurement team look forward to negotiating the best deal while procuring a set of products or subscribing to services. Rate benchmarking involves price/cost comparison of more than one set of products/services to analyze the most efficient combination that can potentially help the procurement team in getting the optimum rate.

The geographical location, scale, and type of materials used during manufacturing play a vital factor in analyzing the rate benchmarking of the corrugated board category. For example, board services in China are typically cheaper than services in other parts of the world. This is due to the wide availability of Kraft papers in the country and the latest technology used for subsequent packaging has broadened the market reach for them. China exports around USD 158 million of Kraft papers around to South Korea, Vietnam, Australia, and Malaysia. Machines used for production are also cheaper ranging from semi-automatic to fully automatic machines of different ply involved ranging from starting price of USD 20,000 to 80,000. The wide availability of raw materials and cheap labor to run operations has allowed it to lead in the market.

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Labor cost is one of the key components of the total incurred costs while offering a product or service. Therefore, an organization must decide on whether the focus category should be retained in-house or outsourced if the organization is providing its products or services at competitive prices. If the organization decides in favor of outsourcing, it must understand the difference in the salary structures of suppliers before selecting a supplier and formulating a negotiation strategy.

According to our research, production manager at Smurfit Kappa, Packaging Corporation of America, and Stora Enso receives a 15% – 20% higher base salary compared to the salary received by managers working in companies such as Port Townsend Paper Company, WestRock Company, DS Smith. However, the year-on-year increment rate in all these companies majorly depends on the Key Result Areas (KRAs).

Organizations may find it cumbersome to continuously track all the latest developments in their supplier landscape. Outsourcing the activities related to gathering intelligence allows organizations to focus on their core offerings. At this juncture, our newsletter service can help organizations stay updated with the latest developments and innovations and subsequently assist in preventing disruptions in the supply chain. We have identified the following developments within the corrugated board category over the last two years:

In September 2021, Mondi Group expanded its production line in Szczecin, Poland. This expansion plan is to streamline their packaging process for the e-commerce industry and help them in establishing themselves as a leader in the European market for the industry.

In July 2022, Georgia-based Company WestRock, which is the leading manufacturer of packaging and containerboard products in the U.S., entered into a strategic agreement to acquire Mexico-based Company Grupo Gondi for USD 970 million. This strategic acquisition will help in enhancing its position in the packaging materials market.

In September 2021, Heinz, a food processing company, entered into a strategic partnership with WestRock Company for developing a replacement for shrink-wrapped multipacks with recyclable paperboard. These are renewable, recyclable, responsibly sourced carbon-neutral paperboard sleeves designed for sustainable packaging solutions.

In 2022, Westrock Co., the U.S.-based manufacturer of packaging and containerboard acquired a leftover interest in GRUPO Gondi. GRUPO Gondi has multiple businesses throughout Mexico including corrugated plants, graphic plants, and paper mills. After the acquisition, Westrock Co. expanded its operations to Latin American markets.