Packaging machinery demand in China to grow 8.6% through 2009.

China is one of the fastest growing markets for packaging machinery in the world. Demand for packaging equipment in China is projected to climb 8.6 percent annually through 2009 to 35.9 billion yuan (or approximately $4.4 billion). Product sales will be driven by growth in manufacturing, packaging

materials use and associated fixed investment activity as industrialization efforts continue and income levels rise. By 2014, packaging equipment demand in China will exceed that in Japan, making China the second largest market in the world behind the US. These and other trends are presented in Packaging Machinery in China, a new study from The Freedonia Group, Inc., a Cleveland-based industrial market research firm.

Demand for labeling and coding equipment will outpace sales of other types of packaging machinery, spurred by the growing need for shippers to accurately identify and track items. In addition, increased use of radio frequency identification tags will bolster demand for associated labeling equipment. Demand for filling and form/fill/seal equipment will also climb at an above-average rate through 2009, maintaining its position as the most widely used type of packaging machinery in China.

The food industry is the largest market for packaging machinery in China. Food-related applications are expected to strengthen their already dominant market position as population and employment gains, increased urbanization and higher per capita income fuel consumption and output of convenience and other packaged food products. Demand for equipment used to package medical, pharmaceutical and personal care products is also projected to rise at an above-average rate through 2009.

The size, growth and composition of packaging machinery demand in the six regions that make up China vary considerably, reflecting differences in the relative size and structure of local manufacturing activity. The Northeast, Northwest and Southwest regions, for example, are underdeveloped but being targeted economically by the central government's "Go West" and "Reviving the Northeast" campaigns. However, the Central-East and Central-South regions together account for more than 70 percent of the country's total manufacturing production. As a result, these areas will continue to provide packaging machinery suppliers with the greatest sales opportunities.

Packaging Machinery in China (published 08/2005, 206 pages) is available for $4,800 from The Freedonia Group, Inc., 767 Beta Drive, Cleveland, OH 44143-2326. For further details, please contact Corinne Gangloff by phone 440.684.9600, fax 440.646.0484 or e-mail pr@freedoniagroup.com. Information may also be obtained through www.freedoniagroup.com.

PACKAGING MACHINERY DEMAND IN CHINA
(million Chinese yuan)

                                                   % Annual Growth

Item                          1999    2004    2009   04/99   09/04

Packaging Machinery Demand   14750   23800   35900    10.0     8.6
  Filling & Form/Fill/Seal    4230    6900   10550    10.3     8.9
  Wrapping, Bundling &        2200    3570    5310    10.2     8.3
    Palletizing
  Labeling & Coding           1670    2850    4440    11.3     9.3
  Other Machinery             4050    6430    9650     9.7     8.5
  Parts                       2600    4050    5950     9.3     8.0

[c] 2005 by The Freedonia Group, Inc.