A weak 4th quarter
FEPE envelope production volumes in billion pcs.
2022 was 6,4% below 2021.
A rather bad 4th quarter of 2022 has clouded the annual balance sheet of the European envelope industry. With a volume decline of 6,4 % in 2022 the performance remained below the long-term trend.
Although there were major supply problems in paper at the beginning of 2022 and at the same time almost all raw materials and energy became drastically more expensive, the industry was able to avoid massive losses in the production quantities. In the first 9 months of the calendar year, the produced quantities moved with a minus of 4-5% in Europe more or less in line with the long-term trend. Due to massive price increases, the industry even recorded significant growth in sales.
Paper prices of up to € 1,800/t forced the envelope industry to increase the corresponding prices for envelopes and pockets, the prices of which almost doubled during the course of the year.
In the middle of the year, worries about safe energy and raw material supply as well as the long delivery times at all levels led to a great nervousness and subsequently to a large number of early orders, which then led to overcrowded warehouses and high stocks at the end of the third quarter. The complete pipeline had been filled at that time with raw material and finished goods.
FEPE quarterly performance in billion pcs.
Q4 2022 was first time below Q3 of a year.
With the relaxation on the raw material and energy markets in autumn 2022, suddenly expected follow -up orders and expected customer calls failed.
The normally strong 4th quarter was disappointing this year. FEPE members reported sales quantities for envelopes and pockets which were 11% below the previous year’s values. This development affected almost all product categories including large pockets and gussets. The decrease in large-formats was also caused by the weak e-commerce business in 2022. In Germany alone, the bevh (German e-commerce association) reports a volume-decline of -8.8%.
A similar decline could also be observed in other European countries.
For the full year 2022 FEPE members reported a volume of 36,7 billion pcs. which corresponds to a minus of 6,4% compared to the previous year. The extrapolated level for the complete industry (incl. 15% non-members) dropped from 46 billion pcs. in 2021 to 43 billion last year.
Due to the significant price increases, total turnover of the envelope industry should have increased slightly in 2022.
Because of the well -filled warehouses, the start of the new year was also very quiet. A normalization will hopefully take place in the second quarter 2023.
