Economy, Business And Markets

Metal Packaging Industry Riding Growth Trajectory

Metal Packaging Industry Riding Growth TrajectoryMetal Packaging Industry Riding Growth Trajectory

The metal packaging industry has been around for nearly two centuries and continues to thrive worldwide.

Metal cans and tins are commonly used for packaging food and industrial products such as motor oil, paint and chemicals.

In fact, urban lifestyle and rapid industrialization in emerging economies have all contributed to the increasing demand for cans, tins, barrels and other metal containers.

According to the Persian daily Forsat-e-Emrooz, the global metal packaging market is projected to reach $135.69 billion by the end of 2020, owing to strong consumption growth in developing countries, including Iran.

Iran annually produces over 250,000 tons of metal cans and tins for food storage and 100,000 tons of metal containers.

The domestic industry enjoys the benefit of zero smuggling/imports as the weight and size of metal containers render its transportation costs uneconomical.

The industry's path to growth in Iran, however, is obstructed by adversaries such as overreliance on raw material imports and their high costs as well as old production machinery dragging down product quality.

Domestic industry players' demand for tin-plated sheets stands at about 300,000 tons per annum, while the maximum annual production capacity of Iranian sheet producers, namely Mobarakeh Steel Company and Tavan Avar Asia Steel Industries, is less than 200,000 tons, according to Hossein Monshizadeh, the head of Iran Metal Can Producers Association.

"Domestic producers are forced to import raw materials from South Korea, India, China and Japan at prices that are affected by global commodity volatilities," he said.

The industry is also lagging behind global competition due to its reliance on outmoded technology.

"Our production technology dates back to the 1980s. There are even producers operating machines that are over 60 year old," said Mohammad Reza Behjati, a player of the field, emphasizing that production quality suffers heavily in the process.