The report from Rabobank said the top five European producers of containerboard (the raw material for corrugated packaging) together have around one third of the European market.
They are: Smurfit Kappa, DS Smith, Saica, Mondi and Prinzhorn Holdings. As much as 43% of the containerboard market is supplied by producers with less than a 2% share each.
Rabobank confirmed that the converting end of the supply chain was even more fragmented, although market share figures were not publicly available.
Vertical integration, combining board and packaging production, was common among the bigger groups, but not at the lower-volume end of the market.
“The consolidation process in the US took a couple of decades,” said Natasha Valeeva , an analyst with the bank’s research arm.
“But in Europe, the process may be [even] more gradual, due largely to aspects of the market structure, such as the greater number of privately-owned companies.”
Mergers and acquisitions
In fact, 2016 was the most active among recent years for mergers and acquisitions (M&As) in European corrugated and containerboard, boasting 30 deals, including 13 relating to UK operators, according to Rabobank.
In the first six months of 2017 alone, 10 deals were completed or announced: more than three times as many as in the whole of 2011.
But at the Confederation of Paper Industries (CPI), director of packaging affairs Andrew Barnetson said UK corrugated had already seen more consolidation than Germany or Italy, for example, where there were still many family businesses, and more scope for M&As. “I’d not expect to see significantly more consolidation in UK converting,” he said.