News Analysis: Opportunities abound for U.S. packaging companies

John Kalkowski, Editorial Director -- Packaging Digest, 12/1/2009 2:00:00 AM

The global economy is not a perfectly round sphere. Like the earth's topography, it's filled with peaks and valleys. So, when the U.S. economy is in a valley, other countries may already be moving toward a peak. This means there are plenty of opportunities for packagers; the opportunities just may not be right under our noses.

Recently, I had the chance to visit Thailand and tour a number of food-processing facilities and R&D centers. For Thailand, economic recovery is already well underway. This Southeast Asian country of 65 million people is one of the few developing countries that is a net exporter of food, which means that it grows enough to meet the needs of its own population and still export to the rest of the world.

According to Thailand's Board of Investment, the country is the world's No. 1 exporter of rice and shrimp and is second in exports of chicken and sugar. When you eat shrimp, chances are it came from Thailand, which claims about a quarter of the U.S. shrimp market. The country also is a top-five producer of tapioca and sugar. Many of these products are processed into ready-to-eat frozen foods in conditions that meet the highest food-safety standards.

And it's not all about food. Thailand also is the top exporter of rubber and the number-one producer of hard disk drives.

Recognizing the need to build an infrastructure that can support its burgeoning trade, Thailand has concentrated much of its development in its Eastern Seaboard, southeast of Bangkok, which has the country's largest airport, eight deep-sea ports, good rail and highway systems, as well as huge industrial estates that support thousands of manufacturing facilities, many of them owned by companies from outside Thailand. However, the Board of Investment also offers significant incentives for companies looking to do business in less-developed areas of the country.

In Thailand, we saw thriving U.S.-based food companies such as McCormick Spices, Jelly Belly, Kellogg's and Cargill. Other U.S. companies like Ford, Seagate and General Motors had major manufacturing facilities there, while international companies such as Tetra Pak and SIG Combibloc have significant operations to meet packaging needs across Asia. While visiting the food companies, we saw packaging equipment from a number of U.S. companies, such as Barry Wehmiller, Mettler-Toledo and others.

When I've spoken with packaging equipment suppliers about sales outside the U.S., many say they're still considering it. This is too bad. Right now, opportunities exist in Thailand and other countries for those who are bold.

Talkback

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John -
You are absolutely correct. It is a shame that more US manufacturers do not seem to be paying attention to developing nations and the opportunities they present. During the past two years, I have visited Ghana, Tunisia, and most recently, Sri Lanka about a month ago, all in connection with World Packaging Organisation activities. Each of those countries and many more like them have active, progressive packaging development programs. These are the countries that will grow significantly over the next 25 years, especially in the food processing and packaging segment. Chinese, Indian, and European manufacturers are active all over Africa and Sri Lanka too. It would be a shame if US manufacturers were to cede these markets to more aggressive competitors. As you said, all it takes is a little boldness, along with a willingness to get outside our comfort zone. Taking intelligent, considered risk is how success is multiplied. Sharing that risk with a local partner is one way to find a suitable comfort level.

Thomas L Schneider, CPP
Vice President
World Packaging Organisation

Thomas L Schneider, CPP - 2009-17-12 16:07:16 EST

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