Widespread anticipation
FachPack 2004 in Nuremberg: EU expansion in Eastern Europe creates new impetus

This year’s FachPack, which will be accompanied by PrintPack and LogIntern, two other top events, is generating widespread anticipation in the industry. The new EU countries will be at the show for the first time. In May of this year they added a population of 75 million to the European Union’s internal market. Eastward expansion will not only affect consumer packaging. Many Eastern European pharmaceutical manufacturers are also experiencing new impetus, and this will benefit producers of packaging and filling machines for the pharmaceutical industry.

Annual economic growth in the new EU member countries has been running at four to six percent since the 1990s. Trade between the new member countries and existing EU countries was already duty-free as a result of trade agreements.
Nevertheless, Czech packaging machine producers, for example, expect that membership will boost business within the EU (Source: SYBA, the Czech-Slovakian Packaging Industry Federation). Formalities that were necessary in the past, such as approvals, will no longer be necessary in the internal market. This will reduce transaction costs and create additional stimulus for business. High-level EU legislation also places the companies on a better legal footing. The packaging waste and marking directives, for example, make it easier for industry to locate in Eastern Europe and conduct business in the region.
One of the goals of EU expansion is to harmonize the standard of living in the individual countries. The packaging industry will play a key role in this process. In order to export goods to other EU countries, Eastern European manufacturers are required to conform to EU standards in areas such as food hygiene and pharmaceuticals.

Currently about 13% of the goods exported by the German packaging machine industry go to Eastern Europe. Poland alone buys equipment worth €70 million, making it the largest market of all the new member countries. It appears that one widespread fear has failed to materialize, namely that jobs and entire production plants would be relocated. Ulrich Ackermann, a packaging expert at the German Engineering Federation, made the following assessment: “Packing machine engineering is, to a very large extent, special machine engineering. Flexibility is the key to the industry’s survival, and there is no evidence that companies are planning to relocate resources in the east.” Vlado Volek, General Secretary of SYBA, reports that markets are showing signs of saturation. US$ 100 million were invested in packaging machines in the Czech Republic in 1995, but the curve flattened out to about US$ 30 million in 2002. Industry experts estimate that the life cycle of packaging machines is ten years, and this means that investment activity should pick up in the next year or two. Machine imports (€90 million) and machine exports (€62 million) are showing rapid growth. Volek explained that this is due to a high level of re-exports.
EU membership opens up new opportunities for the packaging industry, especially as a result of greater political and legal stability and lower transaction costs. Poland, the Czech Republic and Hungary, which are all new EU members, offer good potential for commercial ventures, packaging production facilities and further expansion to the east.