Overview


The business environment in 2018 was challenging. Demand for foodservice and pre-packed food packaging was on a good level, but the year was characterized by cost inflation.

In Europe, demand was on a good level, particularly in continental and Eastern Europe. In the UK, the uncertainty around Brexit had a negative impact on demand for foodservice packaging towards the end of the year. The European Commission proposal for the single-use plastics directive (SUP), published in May 2018, intensified customers’ interest in substituting plastic foodservice packaging with alternatives made of paperboard.

Cautiousness within the global economy increased during the year. Currency swings as well as uncertainty around trade tariffs had minor impact on demand in certain emerging markets.

Prices for the Group’s main raw materials, with the exception of post-consumer recycled fiber in Europe, increased during the year. Plastic resin prices peaked during the third quarter, particularly in emerging markets, but stabilized during the fourth quarter. Prices for post-consumer recycled fiber were on a moderate level in Europe, but in the U.S., prices for post-industrial recycled fiber were at historically high levels. Paperboard prices were on a high level, following increases in pulp prices.

Distribution costs were also high, particularly in the U.S., following the tight capacity brought by a strong economy, a driver shortage and regulatory changes. The labor market was also tight in the U.S. In addition, energy costs increased during the second half of the year.