Packaging Industry in South Korea
Euromonitor International's Packaging Industry in South Korea report offers a comprehensive guide to the size and shape of the market at a national level. It provides historic market size data by industry, allowing you to identify the most popular pack types. It identifies the leading companies, and offers strategic analysis of key factors influencing the market- be they new product developments, recycling or legislation issues. Forecasts illustrate how the market is set to change.
Chapters: 6 | Tables: 27 | Publication date: Mar 2007
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Executive summary
EPR boosts recycling rates
South Korea introduced the Extended Producer Responsibility (EPR) System in 2003, to hold producers accountable for the entire lifecycle of its products. EPR forms an integral part of efforts for a “resource circulating socioeconomic system” by promoting waste reduction, reuse and recycling as well as the production of environmentally-friendly products. Metal cans, paper-based packaging, and various forms of plastic packaging materials were included in EPR in 2003; glass bottles for cosmetics are expected to be included in EPR in 2007. EPR has led to successful recycling rates for certain products and a positive net economic value. In particular, the recycling rate for metal cans was increased exponentially, while the recycling rate for flexible packaging has also risen. Also, the net economic value created by EPR reached Won606 billion between 2003 and 2005.
Draft legislation may damage producers
From October 2006, the Ministry of Environment planned to raise the tax on discharged waste in 2008, for 5 years. Should the Ministry of Environment’s draft legislation come into effect, producers would suffer high recycling costs. For example, the cost of plastic per kg would rise from Won3.80-7.60 per kg to Won328-384 per kg, an increase of approximately 84 times the previous rate. This implies that one third of the cost of plastic will be for discharged waste. Though the Ministry of Environment is planning to implement this legislation step-by-step, to spread the financially burden, it is likely to damage producers by levying indirect taxes on them. Moreover, the financial costs would be transferred to consumers as well.
Innovative companies remain competitive
The performance of packaging in South Korea is highly related to the business cycle and consumer preferences as a whole. With rising oil prices and competition with developing countries, which boast low operating costs, such as China and other Southeast Asian countries, South Korean packaging producers saw growth slow by comparison in 2006. Nevertheless, manufacturers that invested in new product development and innovation remained competitive. Also, PET plastic packaging was competitive compared to other pack type producers; as consumers moved towards more convenient PET plastic packaging. On the whole, companies are exploring new applications and designs to remain competitive in accordance with market trends and consumer demand.
Many companies manufacture both metal and plastic beverage containers, as their clients tend to use both types of packaging. The relationship between the producer and client can be a close one in South Korea. Many companies supply packaging to clients on a regular basis and some are subsidiaries of their client’s manufacturing company.
Table of contents
EXECUTIVE SUMMARY
EPR boosts recycling rates
Draft legislation may damage producers
Innovative companies remain competitive
MARKET BACKGROUND
PACKAGING LEGISLATION
Extended Producer Responsibility (EPR) System
Items under EPR
Producers under EPR
Pending draft under EPR
EPR implementation method
Supportive measures
RECYCLING AND THE ENVIRONMENT
Net economic value amounts to Won606 billion since the inception of EPR
Recycling rate for metal cans on the rise
Recycling rate for paper-based packaging is still sluggish
Table 1 Overview of Packaging Recycling and Recovery in South Korea 2005
CORPORATE ACTIVITY IN PACKAGING
Highly concentrated, with few leading players
Glass packaging led by large domestic companies
Highly competitive, especially in PET bottles
Large players active in both metal and plastic packaging
Flexible packaging players related to major food manufacturers
MAJOR MARKET PLAYERS (LOCAL COMPANY PROFILES)
DOOSAN TECHPACK CO LTD
Leading player in packaging as a whole
Sales increase by 6% despite downturn in packaging
Summary 1 Doosan Techpack Co Ltd: Operational Indicators 2005
Summary 2 Major End-Use Markets for Doosan Techpack Co Ltd by Pack Type 2005
KUMBI CORPORATION
Summary 3 Kumbi Corporation: Operational Indicators 2005
Summary 4 Major End-Use Markets for Kumbi Corporation by Pack Type 2005
SAM KWANG GLASS INDUSTRY CO LTD
Leading player in glass bottles and metal cans
Declining sales due to market trend and sales cut in drinks
Supplier to Hite beer, Lotte Chilsung Beverage and Jinro
Summary 5 Sam Kwang Glass Industry Co ltd: Operational Indicators 2005
Summary 6 Major End-Use Markets for Sam Kwang Glass Industry Co Ltd by Pack Type 2005
YOULCHON CHEMICAL CO LTD
Leading player in flexible packaging production
Sales increase by 4% despite adverse industry conditions
Youlchon develops environmentally-friendly container made of starch and pulp
Summary 7 Youlchon Chemical Co Ltd: Operational Indicators 2005
Summary 8 Major End-Use Markets for Youlchon Chemical Co Ltd by Pack Type 2005
HYOSUNG CHEMICALS INC
Hyosung develops a PET bottle exclusively for beers and yoghurt
Summary 9 Hyosung Chemicalc Inc: Operational Indicators 2005
Summary 10 Major End-Use Markets for Hyosung Chemicals Inc by Pack Type 2005
SAMYANG INC
Summary 11 Samyang Inc: Operational Indicators 2005
LOTTE ALUMINIUM CO LTD
The largest aluminium foil producer in South Korea
Summary 12 Lotte Aluminium Co Ltd: Operational Indicators 2005
Summary 13 Major End-Use Markets for Lotte Aluminium Co Ltd by Pack Type 2005
SAM-A ALUMINIUM CO LTD
Summary 14 Sam-A Aluminium Co Ltd: Operational Indicators 2005
Summary 15 Major End-Use Markets for Sam-A Aluminium Co Ltd by Pack Type 2005
HITE INDUSTRIAL COMPANY LTD
Summary 16 Hite Industrial Company Ltd: Operational Indicators 2005
Summary 17 Major End-Use Markets for Hite Industrial Company Ltd by Pack Type 2005
SHIN KWANG CHEMICAL CO LTD
Major producer of speciality cosmetic containers
Summary 18 Shin Kwang Chemical Co Ltd: Operational Indicators 2005
Summary 19 Major End-Use Markets for Shin Kwang Chemical Co Ltd by Pack Type 2005
MAJOR MARKET PLAYERS BY PACK TYPE
RIGID PLASTIC
Manufacturers
Summary 20 Major Rigid Plastic Packaging Manufacturers by Pack Type 2005
METAL
Lotte Aluminium Co Ltd the leading player
A large and active player
Summary 21 Major Metal Packaging Manufacturers by Pack Type 2005
FLEXIBLE PACKAGING
Consolidation based on ties with major manufacturers
Summary 22 Ranking of Major Flexible Packaging Manufacturers 2005
GLASS
Large manufacturers satisfy demand
Glass packaging led by large domestic companies
Summary 23 Ranking of Major Glass Packaging Manufacturers 2005
LIQUID CARTONS
Strong unification in liquid cartons
Global leader Tetra Pak leads in South Korea
New packaging formats help maintain share
Summary 24 Share of Major Liquid Carton Manufacturers 2005
PAPER-BASED PACKAGING
Folding cartons yet to mature
Domestic players lead in folding cartons
Summary 25 Major Paper-based Packaging Manufacturers by Pack Type 2005
CLOSURES
Summary 26 Ranking of Major Closures Manufacturers 2005
APPENDIX