The hottest packaging material is the key to prote

Packaging materials are the key to protect the quality of milk

1. The financial importance of dairy packaging materials

from the perspective of finance but there are still shortcomings in measurement - that is, the packaging materials consumed per ton of liquid milk and the proportion of packaging materials in the price of liquid milk, packaging materials are of considerable importance. Due to the lack of authoritative statistical data, we take the data disclosed in the prospectus of China Mengniu Dairy Co., Ltd. as an example. In the sales revenue of each ton of liquid milk, packaging materials account for a high proportion of about 20%, that is, for every 5% increase in the price of packaging materials, the gross profit of dairy enterprises will decline by 1 percentage point. According to the Beijing News, Tetra Pak and Kangmei announced a price increase of 3.5% to 10% from March 1, which will reduce the gross profit margin of downstream dairy enterprises by 0. 5% Percentage points

this measure puts great pressure on domestic downstream dairy enterprises. However, domestic manufacturers of sterile packaging paper have no intention of raising prices. Many small and medium-sized enterprises in China basically live by tax evasion, and some even reduce prices. For example, Shandong Quanlin Packaging Co., Ltd. announced at the end of February that the price of its main product sterile packaging products would be reduced by an average of 10%

we believe that the real reasons for Tetra Pak's price rise are the exchange rate factors related to the full use of imported pulp, the free gift of filling equipment, the rise in the price of chemical materials caused by the rise in oil prices, and the pursuit of monopoly profits

2. The demand rigidity and supply monopoly caused by packaging material technical barriers and bundling sales. Milk is a kind of nutritious food that is easy to deteriorate. The technical requirements for external packaging are very strict to protect the quality of milk (Tetra Pak's advertising language is to protect the quality). The high technical requirements have formed a strong barrier to entry in the packaging material market. At present, only a few manufacturers such as Quanlin can provide it in China, This leads to the rigid demand of domestic dairy enterprises for the products of international packaging giants

since sig2002, the world's second largest supplier of sterile packaging materials, entered China and adopted the sales strategy of free delivery of equipment, bundling sales has become the practice of the industry. Due to the improvement of assembly performance, the price of Tetra Pak equipment quickly decreased from 15million yuan to 2million yuan, or even free gifts, because the bag acquisition rate of Kangmei bag can usually be stabilized at more than 99%, while Tetra Pak's bag acquisition rate is more than 85%. Due to the huge investment of dairy enterprises in the production line, the cost of converting packaging material suppliers is very high, otherwise they will lose after-sales service and spare parts supply. Tetra Pak KCM team is also one of the key reasons for its market share of more than 90%

among domestic enterprises, although Quanlin packaging has made a lot of efforts and developed a filling machine with independent intellectual property rights (which has not yet been put into production), it is difficult to shake Tetra Pak's monopoly position, mainly providing packaging materials for some small local dairy companies

since entering China in the 1970s, the price of Tetra Pak paper has increased by about twice on average. The last price increase of Tetra Pak in China was about 1998. Tetra Pak's explanation of this year's price rise is that "this price adjustment is the last choice because it has been under the dual pressure of rising raw materials and transportation costs for a long time"

from the perspective of cost, since most of Tetra Pak's raw materials come from Europe, the change of the exchange rate of the euro against the US dollar and RMB has increased its cost burden. However, from the perspective of the future trend of the RMB exchange rate, it is unlikely that the RMB exchange rate against the euro will continue to rise in the medium and short term, but may decline. At the same time, we expect that the logistics cost is currently at the peak of the cycle, and the possibility of continuing to rise is also very small

from a comprehensive perspective, with the increasingly fierce internal competition of international packaging giants, possible technological breakthroughs of domestic packaging enterprises, possible substitution of PET packaging, and the constraints of downstream dairy prices, we believe that the price of packaging materials will remain stable in the next few years and will not continue to rise sharply