The prolonged disruption of the Strait of Hormuz amid the war involving Iran has constrained shipments of crude oil and naphtha to Taiwan, creating uncertainty for the island’s plastics packaging supply chain.
In response to feedstock delivery delays caused by shipping disruptions in the Middle East, Taiwan’s Formosa Petrochemical Corporation has declared force majeure on select petrochemical supplies
Taiwan’s Formosa Petrochemical Corporation has declared force majeure, while Formosa Plastics has announced production cuts on key petrochemical products.
Taiwanese consumers have been stockpiling plastic packaging products, prompting Costco to impose purchase limits on items.
Costco’s purchase limits cover items such as food storage bags and plastic wraps, effective until April 2.
The prolonged disruption of the Strait of Hormuz amid the war involving Iran has constrained shipments of crude oil and naphtha to Taiwan, creating uncertainty for the island’s plastics packaging supply chain.
In response to feedstock delivery delays caused by shipping disruptions in the Middle East, Taiwan’s Formosa Petrochemical Corporation has declared force majeure on select petrochemical supplies. These include ethylene and propylene, with the company announcing production cuts and suspending new orders.
Meanwhile, due to the disruptions, Taiwanese consumers have stockpiled plastic packaging products, driven by concerns over potential price hikes and shortages.
In an effort to manage demand, Costco Wholesale Taiwan has implemented purchase limits, which started on March 27.
Ten types of packaging sold at Costco Taiwan, including food storage bags, garbage bags, plastic wrap, and zipper bags, will be restricted to one set per membership card.
Diversified Labeling Solutions (DLS) has expanded its RFID label offerings to help its distributor customers meet demand. DLS’ RFID expansion includes: • In-house RFID label conversion capabilities • Ready-to-ship stock RFID labels • Service bureau RFID label encoding/printing services • Dedicated RFID Product Manager • RFID label training. Driving DLS’ RFID label expansion is the significant increase in demand, largely due to RFID label mandates from major retailers, including Walmart, Dick’s Sporting Goods, and Macy’s.
Charles Héaulmé, President and CEO: Market conditions started to improve during the third quarter. While the situation improved compared to the first half of the year, the pace was moderate with differences between categories and geographies. Demand for pre-packed on-the-shelf food increased, particularly in egg packaging and in a volatile market, demand for flexible packaging continued to improve. Food-on-the-go volumes remained subdued, with consumers still feeling the impact of inflation and elevated market prices. The foodservice market has progressed more positively in North America than in other regions. The on-going war in the Middle East continued to affect global brands in some markets in the Middle East and Asia. Our comparable net sales remained at the previous year’s level in the third quarter and decreased by 1% during the first nine months of the year. During the third quarter, sales volumes increased while pricing pressure continued. Adjusted EBIT increased by 2% in the third quarter and 8% during the first nine months of the year with an improved adjusted EBIT margin reaching 10%. The profitability development was supported by our actions to improve efficiency. Free cash flow remained strong, reaching EUR 160 million at the end of the third quarter. While continuing to focus on future growth, the investments level was contained, enabling further reduction of net debt and resulting in a net debt to adjusted EBITDA ratio of 2.0. During the quarter, North America continued to deliver profitable growth, maintaining a strong adjusted EBIT margin. Flexible Packaging profitability continued to improve. Foodservice E-A-O margins were negatively impacted by low demand. Fiber Packaging profitability was weighed on by a lag in pricing, as raw material costs increased.
SCA has been nominated for the German National Sustainability Award, Deutscher Nachhaltigkeitspreis, which is presented in collaboration with the German federal government and several prominent organizations. “It's gratifying that our systematic climate and sustainability efforts are being recognized and proposed for such a prestigious honor. We are, of course, proud of this recognition. We have put a lot of effort into developing sustainability throughout the entire value chain,” says Hans Djurberg, Head of Sustainability, SCA. SCA has been nominated for the German Sustainability in two different categories: raw materials and agriculture and forestry.
