Market Trends of Refillable And Reusable Packaging Industry
Pallets and Crates are Expected to Witness Growth
- Pallets are rigid forms that provide mechanical stability to bulk goods during handling to preserve quality. Handling comprises all activities related to lifting, stacking, product storage, and transportation by land or sea. Plastic pallets are developed to be moveable by equipment such as forklifts, pallet jacks, and front loaders to facilitate the mobility of goods. Plastic pallets have many advantages, such as being lightweight, hygienic, and cost-effective. A business may choose from several plastic pallet designs depending on their needs. Plastic pallets can be noticed in warehouses, factories, stores, and shipping companies.
- The increasing popularity of e-commerce resulted in the expansion of logistics activities, which, in turn, surged the demand for pallets worldwide. Furthermore, the rising penetration of organized retail is anticipated to drive the demand for pallets, as these are widely used in retail spaces for the loading and unloading of heavy merchandise.
- Various companies operating in the industry are focused on expanding their business through acquisitions, collaborations, and more. For instance, in April 2024, Hyne Group announced the expansion of its new operating division with the acquisition of Express Pallets and Crates (Express), based at Narangba near Brisbane. Hyne's acquisition involves the assets and trading business of Express Pallets & Crates. Express has a vast client base with significant long-term relationships across various market segments.
- Plastic pallets and crates have many benefits, such as outshining wood in strength and durability. They excel in high-repeat, closed-loop scenarios, offering robustness that wooden counterparts struggle to match. Unlike their wooden counterparts, plastic pallets and boxes are crafted without nails or sharp edges, eliminating the risk of splinters or loose parts during manual handling.
- According to Modern Materials Handling, the revenue of the pallet market in 2023 was USD 90.61 billion, and it is expected to reach USD 95.23 billion in 2024. The surge in e-commerce is fueling a rising demand for pallets and crates, essential for transporting diverse products, from consumer goods to industrial components. This uptick is prompting retailers and manufacturers to enlarge their warehouses and bolster their inventory. Generally, product manufacturers purchase or lease pallets, factoring them into transportation packaging costs. Conversely, when retailers face a shortage of pallets, recycling firms step in, refurbishing and reselling these essential transport assets.
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Asia-Pacific is Expected to Drive the Market
- Asia-Pacific is one of the established regions in the packaging industry due to reasons highlighting environmental care and commitment to sustainable practices. Growing awareness and concern for ecological conservation drive the region's refillable and reusable packaging dominance.
- Government initiatives and legislation have primarily enabled the expansion of the region's refillable and reusable packaging industry by enacting environmental regulations and encouraging companies to use sustainable packaging techniques. According to the Ministry of Environment, Forest and Climate Change in July 2023, the Extended Producer's Responsibility (EPR) guidelines on plastic packaging mandate the reuse of rigid plastic packaging, subject to the regulations specified by the Food Safety and Standards Authority of India for food contact applications. The EPR guidelines also encourage sustainable plastic packaging, thus reducing the plastic footprint.
- Increasing trade with countries such as India and China globally will also push the market for reusable packaging. According to the International Trade Administration (ITA), in March 2024, India stood out as one of the swiftest expanding significant economies worldwide. The US-India ties, robust as ever, saw their combined trade in goods and services soar to a noteworthy USD 191 billion in 2022, nearly doubling the figures from 2014. For the fiscal year spanning April 1, 2022, to March 31, 2023, the Indian economy surged by 7.2%. Notably, Telangana, Andhra Pradesh, Tamil Nadu, Karnataka, and Kerala outshone the national average, boasting a remarkable growth rate of 8% to 9%.
- According to the India Brand Equity Foundation (IBEF), covering more than 80,000 commercial products, India's chemical industry is highly diversified and can be broadly categorized into bulk, specialty, agrochemicals, petrochemicals, polymers, and fertilizers. India is the sixth largest producer of chemicals globally and third in Asia, contributing 7% to its GDP.
- Further, according to the Office of Economic Advisor (OEA) India, the wholesale price index of chemicals and chemical products in India was 133.5. It reached 145.4 in 2023. Globally, India is the fourth-largest producer of agrochemicals after the United States, Japan, and China. From April 2023 to December 2023, India's agrochemicals exports were estimated at USD 3.12 billion. India holds a strong position in chemical exports and imports and ranks 14th in exports and 8th in imports (excluding pharmaceuticals).
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