Markets

European Tube Production

Slight growth in the first half of 2020

The tube manufacturers organized in the European Tube Manufacturers Association (etma) successfully braced themselves against the corona pandemic in the first half of 2020. While numerous industries and companies in Europe recorded double-digit sales declines in some cases, the etma members were able to increase their previous year's result by 0.3 percent in the first half of 2020 despite the extremely difficult economic environment.

"In view of the extraordinary circumstances such as lockdowns, curfews and contact bans, strong uncertainty among customers and reluctance of consumers this is a quite remarkable result," says etma Secretary General Gregor Spengler. “We started 2020 with some confidence, but then Corona surprised us and all of our positive forecasts and expectations seemed to go away in one fell swoop. The fact that our industry mastered this extreme situation so brilliantly shows how robust our industry is."

Spengler gives several reasons for this. The packaging industry and thus also the tube manufacturers were classified as systemically relevant across Europe and were thus largely spared lockdowns. The industry's supply chains proved to be resistant during the crisis, and the necessary transport capacities were continuously available. In the pandemic, the already excellent hygiene standards of the tube industry and the great trust that consumers place in tubes when it comes to safety and hygiene also proved advantageous.

The soaring demand for disinfectant and hygiene items at the beginning of the crisis also contributed to the industry's good result. Growing demand from the food and medical/pharmaceutical sectors also had a positive impact. In contrast, however, noticeable declines in the cosmetics sector dampened the mood. The cautious purchasing behavior of insecure consumers was particularly noticeable in the high-priced premium segment. In addition, the closings and restrictions of cosmetic and beauty studios and hairdressing salons also had a negative impact in this segment. Last but not least, the duty free shops at the airports, an important sales channel for cosmetic products, almost completely failed. In addition to weaker demand from the cosmetics industry, the dental care sector also showed a slight decline.

The demand for the various types of tubes developed differently. Tubes made of aluminum had to cope with a drop in demand of almost four percent. In contrast, sales of plastic tubes remained stable. In the case of laminate tubes, sales increased by four percent, so that in the first half of 2020, the bottom line was the remarkable market growth of roughly 0.3 percent.

"It is true that the European flexible tube industry is one of the sectors that came relatively unscathed by the Covid-19 crisis in the first half of the year", concludes Gregor Spengler. But despite the encouraging interim result, the etma General Secretary warns: “Incoming orders tended to decline in the third quarter, and further developments up to the end of the year are very difficult to predict. Numerous customers of our members are very cautious about planning. Rising numbers of infections in the third quarter and the restrictions that may result from this are fueling significant uncertainty in the markets, which is likely to continue beyond the end of this year. However, the European tube industry has impressively demonstrated its resistance to crises in the past few months. This gives us a certain degree of confidence that we will also face future challenges in these difficult times."