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Closure-Intensive Packaging Drives Sales of Caps and Closures in Western Europe.

DUBLIN, Ireland -- Research and Markets (http://www.researchandmarkets.com/reports/c57019) has announced the addition of the new Frost & Sullivan Report "Western European Caps and Closures Markets" to their offering.

This research service titled Western Europe Caps and Closures Markets presents an assessment of the status and the future prospects of the caps and closures markets in western Europe. In this research, Frost & Sullivan's expert analysts thoroughly examine the following markets: plastic caps and closures, metal caps and closures.

Closure-intensive Packaging Drives Sales of Caps and Closures in Western Europe

The use of caps and closures will continue to be driven by the increase in closure-intensive plastic packaging at the expense of closureless containers such as metal cans. These include single-serve milk cartons with plastic resealable closures, as well as hot-fill containers for sauces, pickles and soups. Caps and closures are also being increasingly used in conjunction with traditionally closureless forms of packaging such as gable-top, aseptic drink cartons and plastic pouches. Performance features of plastic caps and closures such as anti-counterfeiting in tamper evident closures are highly valued. Moreover, there is a high level of innovation to increase the reliability offered by caps and closures. Besides offering leak-proofness, caps and closures are designed to support features such as convenience of use, child resistance and senior friendliness. Caps and closures producers are increasingly using product features to claim a premium price.

"Caps and closures are often the key for consumers to use and access many packaged products," notes the analyst of this research service. "The primary requirements of caps and closures have stretched beyond reliable closure performance." Apart from offering leak-proofness, caps and closures provide visual appeal, easy-open convenience and brand differentiation. Caps and closures are increasingly used in combination with other packaging forms to offer product differentiation, branding and shelf appeal. They are an integral part of packaging and are continuously evolving to accommodate changing customer preferences. The demand from customers is for a creative solution that will fulfil the design concept, while meeting high standards of freshness and protection.

Key Challenge: Increasing Energy and Raw Material Costs

Energy and raw material costs have increased over the past years due to the twin pressures of expanding global demand and tight supplies. The escalating market price of plastic resins, which are used to produce plastic caps and closures, is squeezing profit margins. These trends can be attributed in part to the rising crude oil prices and the remainder to the increased demand for raw materials from countries such as China. In addition, there has been the unprecedented rise in the cost of energy, which has also contributed to increasing operating costs. Thus, caps and closures companies will have to cope with rising energy costs, as well as the need to innovate and add value to their offering, while maintaining competitive pricing. "Balancing profitability amid price wars and the increasing costs of energy and raw materials is the key challenge faced by companies," states the analyst. "As a consequence, suppliers have embarked on far-reaching cost-cutting programs to maintain profitability in the business."

Despite the above challenge, a positive trend has been the transition of the market to higher value products such as dispensing closures and tamper evident closures. Rising raw material costs due to increasing demand from China and the use of value-added configurations such as child-resistant closures and dispensing systems, which also tend to employ an additional secondary overcap, will increase the average prices. Most caps and closures companies supplying custom and high-end products have been able to pass on the price increase to their customers.

For more information, visit http://www.researchandmarkets.com/reports/c57019
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Publication:Business Wire
Date:May 16, 2007
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