Economy, Business And Markets

Standard Packaging: Achilles Heel of Industries

Standard Packaging:  Achilles Heel of Industries Standard Packaging:  Achilles Heel of Industries

The 21st Exhibition of Iran Packing and Printing (IPP 2014) wrapped up on Tuesday on the capital’s permanent fairground. The event, supported by the Trade Promotion Organization of Iran (TPO), is considered the major venue for printing and packing industries.

During the past decade, a sizeable growth has been recorded in the import of modern machinery for printing and packing. Besides, the raw material, especially for the food packaging, is still being imported. For instance, the packing raw material for aseptic paperboard packages is entirely imported. Aseptic paperboard is the main raw material for making cartons for different types of drinks, fruit juices, milk and dairy products, etc. that are abundantly manufactured across the country and even exported to regional countries. The aseptic packages for food and drink are composed of different layers, including polyethylene, aluminum, and paperboard and very few companies have the technical know-how to produce them including the Swedish giant Tetra Pak.

Iran is not in a desirable position in terms of its packing industry in comparison with many other countries, and it holds only a meager share in the global packing industry. The lack of a positive outlook for this sector could have terrible consequences for the country’s economy as the packaging sector have a complementary role for other manufacturing and economic sectors and the weakness in this industry could directly create challenges for other sectors. Problems of the packing sector could prevent other sectors from developing their competitiveness.

A serious problem that has been ignored in the country’s packing industry is environmental concerns. Developed countries pay special attention to the environmental issues when designing packages for their products. Recently, many European countries have started using bio-based plastics for their packages. But the environmental issues are the last thing in the manufacturers’ minds in Iran. Naturally, neither the manufacturers of goods nor the packing suppliers could be blamed alone. It’s the government that should be held responsible for passing, and more importantly, enforcing strict laws to protect the environment. There are no specific rules in the country regarding the safe level of plastic materials in packaging and there is a growing demand in producing and consuming plastic bags and plastic containers in packing industry.

 Private Sector Role

The packing industry is one of the sectors in Iran on which the government exerts the least interference. Almost all the manufacturers and importers of packing industry raw materials, machinery, and equipment come from the private sector. The absence of the government could be both good and bad. The full authority of the private sector over the industry is considered a positive point. But the worrying point is that there is neither an integrated educational system nor a training center for the packing industry workforce.

There are absolutely no research centers to help the industry develop and grow, Samira Sayeban, an industrial engineer, told the Financial Tribune. She added that every American citizen on average spends over $100 a year on packing costs, while a considerable percentage of the workforce in that country is directly or indirectly working in or for the packing industry and the packing sector is among the big consumers of the raw materials.

Iran is the leading country in the region in terms of volume, variety, and quality of food products. Currently over 72 million metric tons of food products are annually manufactured in the country, which need at least 433,000 metric tons of raw materials for being packed. This is while only 67,000 metric tons of the raw materials are domestically produced and the rest are imported, said Mojtaba Akhtarafshan, a manufacturer of cardboard and boxes talking to the Financial Tribune.

Experts in the field believe that the majority of metal cans used for soft drinks are heavier than many of their foreign counterparts and they are usually weak in their seals. The glass bottles are also heavier than usual, while they are darker in color and usually lopsided or twisted. Unlike many developed countries that are committed to returnable container acts, Iran has no rules regarding recycling of glass or plastic bottles.

Behrang Sami’zadeh, an importer of packaging machinery from Europe, told the Financial Tribune that if Iranian manufacturers were aware of the great impact of the packaging on the customers and thus on their sales, they would definitely adopt a much more efficient procedure. Sami’zadeh stressed that improper packages cost the manufacturers millions of dollars every year as they help increase damages to the goods especially in transportation stage. The packaging expert added that most of the manufacturers, in particular in food sector, do not care about the fact that customers who have to deal with the hard-to-open packages, particularly those heat-sealed plastic blister packs and clamshells.

One of the country’s important export items, saffron, for instance, has incurred huge losses from the non-standard packages. Iran supplies more than 85% of the world’s saffron but the majority of the product is packed in the United Arab Emirates, and re-exported with foreign brands.

Moreover, Iran, as the second biggest global exporter of dates, exports some 80% of the dates in bulk or in non-standard packages, which considerably lowers the value added.

According to official statistics provided by the ministry of agriculture, between 25% and 30% of the agricultural products are wasted every year due to a lack of standard packaging. This inflicts over $10 billion of losses on the economy.