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Russia’s National Packaging Confederation (NKPack) expects the domestic corrugated packaging and folding carton markets to grow by up to 5% in 2024 amid economic uncertainty and rising geopolitical tensions.
…we predict growth in production of corrugated packaging at 5% and for folding cartons of 3-5%.
“We expect more modest numbers than in 2023, but nevertheless, we predict growth in production of corrugated packaging at 5% and for folding cartons of 3-5%,” NKPack’s president Vladimir Chuykov said, adding that the flexible packaging materials market is expected to see annual growth of up to 2%.
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He added that Russia’s packaging industry needs to boost labor productivity and the sector’s attractiveness among job seekers as it will face a shortage of qualified specialists and workers as well as rising wages this year.
Following Moscow’s invasion of Ukraine in 2022, the West slapped a raft of sanctions on Russia unseen since the days of the Cold War. As election season looms in Russia, the domestic packaging industry is facing a unique set of challenges, with analysts warning of a mounting labor shortage.
The country’s depleted labor force is threatening economic growth at a time when the Kremlin continues to pump physical resources into the military. According to the Russian Academy of Science’s Institute of Economics, the country was short of around 4.8 million workers last year and the problem will remain acute in 2024.
“Wage growth will increase costs, but these costs can be dampened by the “safety cushion,” which was established in previous years due to profitability. In the future, however, this will become impossible. This is also a challenge in terms of the need to create innovative products,” Chuykov said.
He also explained that the Russian packaging industry’s ability to navigate new challenges following the exit of major international players from the industry and the disruption of logistics chains would be pivotal in determining the sector’s future success.
Russia’s non-food packaging sectors have achieved almost complete import substitution and there is a clear trend towards ecological packaging but with a slower pace of adoption, he added.
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