PETpla.net Insider 07+08 / 2012

REGIONAL MARKET REPORTS 12 PET planet insider Vol. 13 No. 07+08/12 www.petpla.net The first part of our research (in this issue) consists of a comparison of the volumes of beverages in the period from 2005 to 2010 and the forecast up to today and beyond. We will be establishing just how many tonnes of PET have been and will be converted, as well as by which Chi- nese companies and with which PET processing machines and how many. (Some of the data has been accurately determined, other data has been estimated.) The unusually strong demand has led to strong compe- tition within the industry and among all participants. How the machine manufacturers, converters and bottlers will cope with this challenge, and the measures and strategies they will employ, is a subject that will be explored in future issues. In 2006 we met and discussed with the leading players how they saw the Chinese beverages market developing: Six years later we have revisited these same companies to review past progress and consider future developments. These are the companies we visited:  bottlers: Wahaha, Yinlu and SCMC (Coca Cola invest- ment),  converters: Shanghai Zi Jiang and S.O.E. (Pepsi),  preform system suppliers: Husky, Krauss Maffei/Net- stal and Sipa,  manufacturers of the bottling lines : Sidel, Krones, KHS (Corpoplast included) We are grateful to the companies mentioned for their readiness to engage in meetings and discussions and to collaborate during the two weeks in March 2012. Under- standably, pressure of time meant that not all the meetings we would have liked to arrange came about. Nevertheless, it is our belief that the present research gives a coher- ent picture of a PET sector where things are moving on a grand scale – with major potential that those who have the right products and are able to link up with the right con- cepts will fully exploit. You will be able to read all about them in our subsequent reports. China’s beverage industry In the search for reliable market data – facts and figures – we came across the PETplanet article from 2006 entitled “More questions than answers”. 2012 has arrived and noth- ing has changed. There are some government statistics on the beverages market released by the China Beverage Associations. However, due to different categorization and unit measure, the data may seem convoluted when com- pared to other intelligence sources. But there is nothing on the packaging industry, and absolutely nothing on PET and PET machine manufacturers. As far as the beverages are concerned, the profession- als at Euromonitor and Canadean are conducting research – accurate to three decimal places but nevertheless from time to time contradictory in their forecasts. But business based on facts and figures is not all that straightforward when even the big boys – e.g. Coca Cola in Turkey – regard the precise details relating to volumes and market share as confidential. No less complex is the situation as far as the machine manufacturers who supply the beverages market with PET processing machinery are concerned. Sometimes it is the unpredictable attitude of an equity owner far removed from day-to-day business pontificating via statements on busi- ness operations or a restrictive local diktat originating from an ambitious marketing department that feels obliged to make complementary statements only. Having perused and evaluated the available literature:  gtai – Germany Trade & Invest for economics  Euromonitor and Canadean for beverage data  Publications such as Worldpress, Frankfurter Allgemeine Zeitung, China Daily for general information  Presentations by companies such as Sidel, Husky, Krones, Bericap for individual accounts We subsequently set off for China, did some local research, listened attentively and then formed an opinion – based on our discussions, but also on our own observations and experiences that we had collected on our global tours of the world of PET. PETplanet Insider is a magazine for specialists. This is how we see ourselves. The Regional Market Reports are intended and designed to be factors for use in shaping the opinions of managers of companies operating within the PET sector. Our objective is not simply to provide the management with figures, but rather to get to know the concepts and strate- gies of the market. This basic specialist statement represents the task and goal of this, our report on China in 2012. Beverage consumption in China 80 70 60 50 40 30 20 10 0 2005 2006 2007 2008 2009 2010 2011* Soft drink consumption Volume growth in bn l 33.0 37.5 44.6 51.7 59.4 68.1* * Forecast +20.0% +16.0% +15.5% +14.6% bn litres Volume growth in bn litres from 2005 to 2011 (Source Canadean)