June 13, 2024
Malaysia Corrugated Packaging

Malaysia Corrugated Packaging Market: Corrugated Packaging Industry in Malaysia Seeing Continuous Growth

Background of Malaysia Corrugated Packaging Market

The corrugated packaging industry in Malaysia first emerged in the late 1960s with the establishment of a small corrugated box plant. In the following decades, it grew steadily to meet the packaging needs of various industries such as food and beverage, electronics, and home appliances. By the 1990s, Malaysia had developed a well-established corrugated packaging sector supplying both domestic and international markets.

Key Factors Driving Industry Growth

There are several factors that have driven the continuous growth of Malaysia’s Corrugated Packaging industry over the past few decades.

Rising Consumption and Imports

As Malaysia’s economy expanded and consumer spending increased, so did the domestic demand for packaged goods of all kinds. This naturally increased the need for corrugated packaging. At the same time, Malaysia has relied heavily on imports to meet domestic demand for various products. All imported goods need packaging for transportation and storage, providing a steady source of demand for local corrugated manufacturers.

Growth of Manufacturing Sector

Malaysia has emerged as an important manufacturing hub, with key industries such as electronics, machinery, chemicals, and food and beverage producing both for domestic consumption and export. The manufacturing sector relies on robust supply chains that move parts and finished products both within the country and overseas. This manufacturing growth has driven parallel growth in the corrugated packaging industry to meet their packaging requirements.

Advantageous Geographic Location

Malaysia’s strategic location at the heart of Southeast Asia has contributed to the growth of its corrugated packaging sector. Its position supports cost-effective supply of raw materials from overseas sources as well as efficient distribution of finished packaged goods both regionally and globally using land, sea, and air transportation. This provides Malaysian corrugated producers an advantage in serving both domestic and international markets.

Government Support and Investment

The Malaysian government has actively supported the growth and modernization of the country’s packaging industry through various incentives and initiatives. This includes tax incentives for industries investing in new technology and expanded production capacity. It has also facilitated consultation programs connecting local manufacturers with overseas machinery suppliers and consultants to help upgrade local capabilities. Such measures have encouraged investment and improvement across the corrugated packaging value chain.

Key Players and Market Size

The corrugated packaging industry in Malaysia is dominated by a small number of large, well-established players. Ten leading companies account for around 60-65% of total industry production capacity. Some of the major players include Edpack Corrugated Carton, Panelpack, and Greif Packaging.

Market data indicates the size of Malaysia’s corrugated packaging industry stood at around RM3.3 billion (US$800 million) in 2020. Domestic consumption accounts for approximately 70% of total output while 30% is exported. The sector is projecting continued growth of around 4-5% annually over the medium term, supported by ongoing economic and manufacturing expansion both within Malaysia and in key export markets.

Focus on Innovation and Automation

To stay competitive and meet more sophisticated packaging needs, Malaysian corrugated manufacturers are focusing on innovation, advanced machinery, and industry 4.0 technologies.

Use of New Materials

While basic corrugated remains the bulk of production, some producers have started incorporating new paper-based and biodegradable materials into their product lines. This includes materials with enhanced barrier properties for moisture, gas, oils, and grease. Substrates infused with antimicrobial properties also have applications in food packaging.

Malaysia Corrugated Packaging Market Advanced Machinery

Leading manufacturers have heavily invested in state-of-the-art production and finishing equipment. Fully automated corrugators with high outputs and precise tolerances maximize efficiency. Flat-bed and rotary die-cutters with complex tooling allow unique shapes and designs. Advanced printers apply high-resolution graphics digitally or with UV/latex inks.

Industry 4.0 Technologies

New technologies like RFID, robotics, IoT, and MES (Manufacturing Execution Systems) are being progressively applied across facilities. This enables real-time monitoring of production data, predictive maintenance of equipment, increased automation of material and product handling, and customized digital manufacturing. These innovations support higher quality, consistency and deliver more versatile “smart” packaging solutions.

Sustainability Measures

With rising environmental awareness, producers are taking measures to reduce resource use and improve sustainability. This includes utilizing more recycled fiber in fluting medium, recovering trim and scrap for reprocessing, increasing use of renewable energy sources, and design optimization to reduce material usage. Investment has also gone into emission abatement and effluent treatment systems to minimize factory environmental footprint.

Overall, Barring any major economic disruption, outlook for Malaysia’s corrugated packaging industry is positive over the next 5 years. Underlying demand drivers like manufacturing growth and import/export volumes are expected to sustain 4-5% annual market expansion. Producers investing in R&D and technology will improve capabilities and gain market share. The industry will continue to upgrade operations while balancing productivity, quality, and sustainability for long-term competitiveness and growth in both domestic and international markets.

1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it