Fiber drums: Innovators will survive
By Staff -- Purchasing, 6/3/1999
While some industry estimates say demand for fiber drums is declining, several producers report increasing sales.In either case, the fact remains that drums have suffered at the hands of open-head plastic drums, which meet the un/dot testing criteria that fiber drums do not. Some of the dry flowable product market is also going into bulk bags. But for many producers, business remains good. "We're doing quite well, sales have been up." says Chuck Wyack VP of marketing and sales for Michael's Cooperage. Business has been so good that the company opened a new production facility in California in May.
Fiber drums do have a cost advantage, which has helped them survive the trend toward reusable packaging. While they are not reusable, and don't offer the same strength as plastic or steel drums, they are significantly cheaper. Also, while the hazmat market has been lost, there are many non-hazardous materials that people want to ship and store in drum-size containers. "Fiber drums are a mature market," says Pat Griendling, product manager for fiber drums at Greif Bros. "But as a company, we are innovative." For example, Greif offers the Ro-Con drum, an all-fiber square-shaped drum which is easily recyclable, nestable, and offers space savings due to it's almost square design.
There are other benefits to fiber drums, too. They allow easy handling and are lightweight--allowing for shipping cost savings. They can be water and weather resistant, and all parts of the drum can be recycled. "The major benefit we can offer is flexibility," says Wyack. "We ask our customers what they're using the drums for and design a package to fit their needs." For example: If a user doesn't fill drums to the top, drums can be fabricated that are shorter--thereby saving on drum costs.
Fiber drums are ideal for one-way shipping and open-loop distribution applications. Used primarily with powder and dry-flowable applications, fiber drums are also finding use with liquid and semi-liquid applications. A plastic liner fitted into the drum allows for use with liquids. Manufacturers also offer containers which are more moisture resistant and provide more structural strength. Most suppliers believe the companies that will survive will be the ones who can be innovative with their fiber-drum products.
"In packaging it is pretty well established what is appropriate for fiber drums, and what's appropriate for plastic or steel," says Wyack. "But despite the growth in plastic, fiber drums are more than holding their own." Producers expect to see further inroads into markets such as hot-melt, latex, sealants, silicones, and adhesives.
Prices should hold steady
Fiber-drum manufacturers admit that there are certain areas where drums are under price pressure because of the decreasing price tags for plastic drums. If plastic drum tags drop far enough, fiber drums no longer hold the price advantage. Most fiber drums are made from 46-lb kraft linerboard. The linerboard is wrapped into a cylinder, and the layers of paperboard are sealed and laminated using adhesives. Steel chime bands and plastic or metal covers are used as the top and bottom of the container. Besides labor, the main cost of fiber drums can be found in the linerboard.
Linerboard prices (U.S./East) fell through much of 1998, hitting a low of $342/ton in the fourth quarter, according to Purchasing's transaction price information. Prices increased slightly in the first quarter of this year--rising to $358/ton. Linerboard prices are forecast for the rest of '99, climbing to $363/ton by the year's end. But prices remain far below the average for 1998, and as competition is fierce among bulk packaging suppliers it seems unlikely that fiber drum prices will increase much.
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