Packaging & Printing in 2023: Digitalization and Smart Factories Emerge as Breakthrough Paths Amid Demand Pressure

Across China's 666 segmented industries, packaging and printing stands as a 2-trillion-yuan sector tightly connected to 97% of those segments—giving it a strategic depth few other industries can match.

Over the past three-plus decades, the sector has repeatedly found fresh growth drivers whenever the global landscape shifted, allowing it to maintain relatively stable expansion.

Yet in the first half of 2023, after pandemic-related restrictions were fully lifted, packaging and printing ran into unprecedented headwinds: exports and domestic demand weakened in tandem, recovery across most industrial segments fell short and compounded one another, while overcapacity fueled fierce competition among peers...

From January to May 2023, infrastructure was the one bright spot in China's economy; exports and domestic demand were still weighed down by the downward momentum from 2022, leaving the economy searching for a bottom. Demand kept sliding, forcing upstream material suppliers to cut prices again and again. White cardboard, containerboard, corrugated paper and plastic films all suffered collapse-like declines.

Back to the fog-bound packaging and printing industry: how will the market perform in the rest of 2023, and how should next year and beyond be assessed?

World Economic Outlook: 2023 global growth projections

Below, we use the 2023 global growth forecasts from the World Economic Outlook to draw out several possible signposts.

China, still the leading emerging market and a new engine for the world economy, remains favored by global economists. Its 2023 growth expectation is higher than in 2022.

On June 6, the World Bank's latest Global Economic Prospects report raised China's 2023 growth forecast to 5.6%, well above the 4.3% in its January report and the 5.1% in the April East Asia and Pacific Economic Update.

The same Global Economic Prospects report also lifted this year's U.S. growth forecast to 1.1% and the euro area's to 0.4%.

The OECD likewise upgraded some economies, raising China's 2023 growth forecast to 5.4% and the U.S. 2023 forecast to 1.6%.

Clearly, World Bank economists are more optimistic about China in the second half, citing both accommodative monetary policy and the economy's strong resilience.

That gives reason to view the second half as a critical period for the economy to bottom out and rebound.

Where is the future headed, and how can companies break through today?

After four decades of rapid expansion, China's printing and packaging industry has arrived at a crucial historical turning point.

Internet packaging can connect all parties in the value chain on a single platform. Through informatization, big data and intelligence, it can better match packaging manufacturing, material supply, packaging design and customer orders, delivering fast, low-cost, integrated quality services. Internet Plus is expected to reshape the competitive landscape, inject new momentum into consolidation and make large-scale industry alliances possible.

At the same time, digital and network technologies are accelerating printing's move toward digitalization, with digital printing increasingly active in paper-based packaging. By recording digital text and images directly onto substrates, digital printing naturally fits personalized and differentiated packaging needs, opening broad future opportunities.

The ongoing digital and intelligent upgrade across industries can help China cross the middle-income trap, switch to new growth drivers and restructure its economy. In 2023, China is embracing a major opportunity for national rejuvenation.

In printing and packaging, several leading companies have already made breakthrough progress in digitalization and intelligence.

At Yuto's smart factory in Xuchang, automation has replaced half the workforce; once the model matures, total labor is expected to be cut by two-thirds.

At Hexing's smart factory, large-scale, small-batch flexible production of cartons and color boxes is mature, with daily output of 2 million color boxes. Compared with the traditional offset printing, corrugating, mounting, die-cutting and stitching/gluing process, its efficiency is on a different level entirely.

At Zhongshan Zhongrong's smart factory, which focuses on cartons, more than 2,000 products are delivered daily, over 8,000 semi-finished goods are rotated, and more than 30,000 types of new and old materials move in and out—yet this massive logistics flow is now largely unmanned.

In Hucai Printing's workshop, a worker simply presses a button. About a minute later, three exercise books emerge continuously as physical products from electronic files. Open any two at random, and the error-collection section at the back differs. The custom error collections for 5,000 students take about 24 hours to produce and are delivered within 48 hours.

As leading printing and packaging firms replicate smart factories from 1 to N, traditional players will face an ever sharper dimensionality-reduction challenge. Many will be forced out of competition; older employees unable to master digital and intelligent systems will retire early, while Gen Z, raised on the internet, will become the backbone.

—This article is reprinted from China Packaging Network (pack.cn), original link: http://news.pack.cn/show-379363.html