Corrugated board is the single most common packaging material. Every day thousands of tonnes of goods are shipped around the world, packaged in corrugated board boxes. Billerud’s popular containerboard makes the boxes stronger, more hygienic and more attractive. The added value provided by the products includes better performance, increased sales and reduced wastage.

business area packaging boards

Protecting goods – the market’s highest priority

OFFERING

Packaging Boards is responsible for sales of Billerud’s primary fibre-based containerboard, liquid board for portion-packed drinks and Cup Stock. With deep insight into the market’s conditions and requirements, Packaging Boards provides customers with technical consultations and knowledge regarding the role of packaging throughout the value chain.

MARKET SHARE IN EUROPE
WHITE LINER* – MARKET LEADER	NSSC FLUTING (SEMI-CHEMICAL FLUTING) ** – MARKET LEADER
70% * Low grammage	42% ** 100% primary fibre
Source: Billerud, 2010	Size: 580 000 tonnes Source: CEPI Containerboard Organisation 2010
White liner is the outer layer of corrugated board, but is also used in packaging for luxury and consumer goods.	Fluting is the rippled middle layer in corrugated board and is used to transport sensitive goods such as fruit and vegetables and consumer durables.

2010 was a successful year for Packaging Boards. Operating profit totalled SEK 271 million, an increase of 18%. Improved prices in local currency compensated for a less favourable currency situation and increased costs. The operating margin was 11% (10).

Offering

Packaging Boards supplies the corrugated board industry with primary fibre-based containerboard, including the corrugated middle layer, fluting, and the outer layer, white liner.

Billerud’s fluting, Billerud Flute^®, is the world leader for lasting performance and produces extremely strong boxes that protect the contents. This product is in particular demand for applications that involve transporting goods such as fruit, vegetables and consumer durables.

Billerud’s clean, white liner offers excellent printability and give corrugated boxes an attractive exterior. They are also ideal for packaging of luxury and consumer goods and are approved for direct contact with food.

Packaging Boards is also responsible for sales of Billerud’s liquid board for portionpacked drinks and the new area: board for disposable cups – Cup Stock.

Value-adding services and solutions

Packaging Boards also offers several valueadding services and solutions in areas such as material choice and design. In addition, seminars and courses are held for customers on the subject of packaging optimisation.

---

The appearance of packaging on the store shelf is becoming increasingly important, since the packaging has a strong sales function. Billerud’s white liner, with its excellent printability, helps the brands and logos stand out, making it particularly suitable for luxury and consumer goods packaging.

Fresh Services

Fresh Services helps brand owners with logistics monitoring and packaging optimisation. In the area of fruit and vegetables, Fresh Services is focused on reducing expensive packaging-related wastage. The approach of Fresh Services is to examine handling all the way along the logistics chain and suggest improvements to packaging.

Box Lab

Box Lab works on packaging development on behalf of customers. Corrugated board producers and brand owners can send in their packaging solutions and have their function and performance assessed in line with the requirements placed on these.

Customers

The majority of the business area’s customers are corrugated board manufacturers who see the added value in offering their customers premium quality. Billerud’s liners are also in demand among manufacturers of luxury and consumer packaging. The business area’s other customers include producers of disposable cups and manufacturers of portion packs for drinks.

Factors driving demand

Packaging Boards’ sales are benefiting from the market’s increased demand for product optimisation, product differentiation and product safety. New patterns of consumption are also having a positive impact on the business area.

Increased demand for product optimisation

More and more brand owners, growers, distributors and wholesalers are realising that strong packaging is a smart investment in reducing expensive wastage. Billerud’s containerboard create extremely strong packaging that protects the contents from going to waste.

Material savings are of great interest along the value chain. Strong materials in primary fibre make it possible to reduce the amount of material per box by up to 15-20% – and still improve the strength of the box. Billerud’s primary fibre-based containerboard also offers excellent efficiency in packaging production, producing an endresult of high and consistent quality.

Product differentiation more important

Many packs in corrugated board are shelfready solutions that are placed directly out in the store. The appearance of these packs is becoming increasingly important in terms of sales, as proven in a study by The Packaging Arena in 2009. The study showed that products in boxes made from Billerud’s white liner attracted more attention in the store, since printability is better and the white liner is better at making the brands and logos stand out.

Clean and safe paper

Packaging paper made from primary fibre is approved for direct contact with food and Billerud’s products have the relevant product safety certification with regard to hygiene and health. However, the European Directives are not consistent on paper in contact with food. For example, pizza boxes made from recovered fibre are prohibited in Italy but permitted in many other countries, including Sweden. Billerud’s quality makes it well positioned to benefit from an increased awareness of product safety and greater knowledge of how packaging affects its contents.

Globalisation, increased prosperity and changing patterns of consumption

Increasing globalisation has led to increased transportation of goods, which in turn places greater demands on packaging solutions. The packaging has to be up to the task of packing, stacking and protecting the products. This is good news for Billerud’s sales of materials and services.

As more and more people buy coffee and other drinks to take away, the market for disposable cups has grown sharply, which has had a positive impact on Billerud’s product Cup Stock. Increased global prosperity has also lifted demand for disposable packaging, particularly in Asia, which is seeing a growing market for portion-packed drinks.

---

The market for disposable cups is growing strongly due to new patterns of consumption, with more and more people buying coffee and other drinks to take away. This trend has been noticeable in Billerud’s Cup Stock product segment – board for disposable cups.

Market

The European market dominates Packaging Boards’ sales, due to its geographic proximity and the fact that Billerud has spent a long time developing good customer relations. The market is large in the Mediterranean region, which is an important exporter of fruit and vegetables. Around two thirds of Billerud’s fluting is used in packaging for this purpose.

The European market for primary fibrebased fluting and liner is relatively consolidated. In Europe, Billerud is the leading supplier of containerboard such as low grammage white liner, which has 70% market share, and semi-chemical fluting, which has 42%.

Strategy

With its customer-focused business development, Packaging Boards constantly endeavours to improve packaging performance, with cleaner, stronger and more attractive packaging. Product markets with high demand and profitability take priority in developing the business area’s product mix. The desire for environmentally optimised products, solutions and services is a common thread throughout the business area.

A new standard for corrugated board performance

In a move to offer its customers better knowledge about corrugated board packaging, over the year Billerud’s Box Lab scientifically demonstrated the difference in durability and long-term performance between various grades of corrugated board. The method, developed to take measurements under transport conditions that are as realistic as possible, proves that Billerud Flute^® is the world’s strongest fluting. Billerud has received mass media coverage for the method, which goes under the name of CCT10 – Corrugated Crush Test for 10 days.

Successful launch of lightweight fluting

The past year has seen the quality of lightweight fluting optimised. This has led to major advances in applications where the boxes do not require the same strength and thickness as the other fluting offered by Packaging Boards. The lightweight fluting is primarily used for shelf-ready packaging and packaging used for e-commerce and food handling.

Greater networking with the value chain

Over the year, several well-attended seminars were held with a focus on optimising packaging and increasing networking between the industry’s stakeholders. In September, an important forum, Corrugated X, was set up for the corrugated board industry and its customers, as well as designers and printers. This created a good platform for exchange of knowledge, good relations and a greater understanding of the value of primary fibrebased packaging paper.

Lucrative focus on Cup Stock

Over the year, Billerud increased its volumes in the Cup Stock product segment. The strong demand for disposable cups, combined with a limited number of material suppliers, led to the business area reducing deliveries of liner and instead switching production to Cup Stock.

Right packaging leads to better deliveries Fresh Services and Box Lab show customers the key factors in reducing losses and improving packaging strength. Every day, tonnes of fresh produce are transported around the globe. In Europe alone, its annual value is put at EUR 100 billion. However there is considerable wastage – 10% of the fruit and vegetables transported in Europe is never sold. Inferior packaging is one cause of this waste of resources. The aim of Fresh Services is simple – to reduce this expensive packaging-related wastage. At every stage that involves the packaging, Fresh Services seeks out weak points that may jeopardise safe delivery. A comprehensive survey of the handling process is carried out – from the grower to the packing station, along every stage of transportation, until the delivery finally reaches the retailer and consumer. Box Lab plays a significant role in this offering, which can scientifically show Billerud’s customers the key factors in reducing losses and improving packaging strength. As a result of the work carried out in the focus area of Fresh Foods, demand for Billerud’s fluting is expected to increase over the next few years in markets other than Europe. The agreement signed with Brazilian corrugated board producer Rigesa last year opened an important door to Brazil, as well as to India, where Rigesa also runs a packaging business. Brazil is a major exporter of fruit and India is expected to become increasingly important in the international fruit market. Rigesa is part of the multinational packaging group Mead Westvaco. Spring 2011 will see Billerud Fresh Services launching an alliance of leading suppliers of corrugated board boxes to the fruit industry globally. The aim is to improve the competitiveness of its partners and eliminate fruit wastage in the chain from producer to consumer.