FIBC market keeps expanding

By Jianfeng Pei -- Purchasing, 7/13/2000

Demand for flexible intermediate bulk containers (fibcs) is expected to continue surging this year as more customers realize advantages of bulk bags, but rising raw material costs are more likely to push up prices.

The fibcs market has been expanding by double digits during the past several years. "The growing trend will continue, and I expect demand to increase 8% to 12% this year," says Jack King, president, King Bag & Manufacturing, Cincinnati, Ohio.

Jodi Simons, marketing director, B.A.G. Corp., Dallas, Texas, also sees a strong year for fibcs. She expects the company's sales will grow 10% to 20% this year.

More and more, customers have continued to switch from multi-wall paper bags and fibre drums to fibcs in recent years. fibcs, also called "bulk bags," are strong, durable and economical compared with other forms of flexible packaging. They can be folded flat and bailed for shipment to users. The cost of fibcs is competitive as they are utilized without pallets. fibcs can save space and are easy to store and handle in warehouses with standard equipment.

Another big advantage of fibcs is that they can be designed to fit a variety of packaging needs. Instead of being stuck with a container that limits users to one way of filling, moving, storing and discharging products, fibcs allow users to design the bag with a variety of filling and discharging methods.

fibcs are expected to continue taking market shares from drums, paper bags and other types of bulk packaging. According to forecast by the Freedonia Group, a market research firm in Cleveland, Ohio, sales of fibcs will grow 12.2% annually to reach $515 million in 2002.

Prices of fibcs actually went down over the past year because the market is very competitive with cheap imports from other countries. But raw material costs, especially polypropylene, have been rising in recent months as prices of crude oil are staying high.

"Prices of polypropylene are expected to continue going up," says King of King Bag. "It is possible that fibc prices will increase in coming months."

Simons of B.A.G. Corp. also believes that fibc prices will go up. "Manufacturers' profit margins have been declining as costs keep growing," she says. "Manufacturers will be forced to raise prices because they can not afford to lose money."

Imported bags continue to dominate the market for standard and commodity bags. Domestic facilities are mainly used to produce specialty bags to meet customers' specific needs.

Because of the soaring demand, leadtimes of fibcs are extended from three to four weeks to current five to six weeks. For imported products, leadtimes are about 10 to 12 weeks.