Big brands food manufacturing companies are building their own corrugated boxes packaging plants one after another. What is the direction of traditional carton

Big brands food manufacturing companies are building their own corrugated boxes packaging plants one after another. 

What is the direction of traditional carton packaging factories?

The times are changing rapidly. No one can conquer everything with one trick, and corrugated carton packaging factories are no exception.

The main profit model of traditional boxes manufacturing factories is to receive carton production orders.

However, in recent years, more and more big-brands food manufacturing companies have established their own corrugated box packaging factory, once there was a situation of replacing the business of downstream carton factories. In recent years, with the frequent fluctuations in paper and paperboard prices, it has become a trend for end users to build their own corrugated packaging plants 

across borders.Major customers are setting up packaging plants across borders. What are the "tricks" involved? Faced with terminal robbery of business, how should paperboard and carton factories respond?

Many large customers of self-built packaging plants have their own plans, and there are many "tricks" among them:

Bright Food Group: The self-built boxes packaging plant is an important step for the group to build a complete food industry chain integrating the primary, secondary and tertiary industries, forming a large pattern covering upstream raw material resources, intermediate production and processing, and downstream circulation channels.

Fujian Teletubbies Food Co., Ltd. (acquisition of carton factory): Packaging cartons are an important raw material. The cost of purchased cartons accounts for an average of more than 9% of the total cost, and there is a 3%-5% damage rate during boxes transportation; Cost expenditure is relatively large, the income is relatively low, so having your own carton packaging factory is conducive to reducing the purchase cost of packaging cartons.

In addition, there are many manufacturer thought like this:

When a company develops to a certain scale, rather than letting other businesses share the profits, it is better to expand the company's production scope vertically.

On the one hand, the interests of the upstream, midstream and downstream are all pocketed by themselves; On the other hand, for corporate production, both production time and business can match their own product production.

Invisibly, it will take advantage of the fierce market competition. For example, on the eve of a holiday, we need to rush to produce a batch of goods, but other packaging and printing companies have other businesses and have no time to take care of them.

And if you have your own printing and packaging company, you will be able to allocate your time reasonably and prioritize the most important tasks. And this is something other companies don't have.

It is precisely because of this "careful budgeting" that many powerful large companies are beginning to tend to build their own corrugated packaging supporting factories. We found that most of the companies that have built their own factories in recent years are food and beverage, pharmaceutical, alcohol and other production companies.

The wolf is coming! Remind carton factories: too much reliance on individual large boxes customers is risky for development！

There is a saying that those who have big customers win the world.

On the other hand, if you think about relying too much on individual big customers for development, it is very risky.

The editor often sees in the annual reports of some listed corrugated box packaging plants that among the top five suppliers of many packaging plants. The cooperation ratio with a certain one reaches more than 50%, and in some cases even as high as 80%.

It usually takes a long time for a carton factory to develop a major customer, and the process is cumbersome. It must go through carton manufacturing factory inspection, boxes sample testing, comprehensive evaluation and other review procedures before it can obtain packaging supply qualifications.

Although orders from large customers are usually relatively stable, in recent years as competition has intensified, the profit margins of orders from large customers are generally not as high as expected.

Another common phenomenon in the industry is that many carton printing factories have a high proportion of sales to large customers, which increases the risk of business operations.

Once a large customer is lost or a large customer has operational problems, it will have a huge impact on business operations.

Nowadays, well-known companies with high profits in the industry are deliberately optimizing their customer structure, trying to reduce the proportion of large customers in the overall order output value, and reducing operating risks.This is worth learning from many other carton manufacturers.

In addition, if we look at it from another perspective, in fact, more large customers are not willing to build their own supporting factories.

After all, cross-borders operations are risky. If the supporting carton supplier can provide good products and services, it will definitely be a win-win situation.

Therefore, cultivating internal skills to improve carton product quality and service levels is the long-term solution to win the favor of major customers.

If you have any interest in the corrugated box business, welcome to contact me:

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China Intelligent Industry Paper Roll, Cardboard, Base Paper Logistics, Wrapping, Convey System (cwconveyorsystem.com)

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