IIPC: Through the maze

// By Peter Mackay on 1 Dec 2023
IIPC: Through the maze

Industrial packaging markets have been subject to both positive and negative trends during the Covid years, as this year's ICCR conference heard

The triennial International Industrial Packaging Conference (IIPC) follows the packaging industry around the world and provides a very useful meeting point for reconditioners and manufacturers from Europe, North America and Japan. Each iteration of the event begins with a round-up of business performance over the past three years though at this year’s event, which took place in Ghent, Belgium at the end of September, speakers had to look back five years, since the Covid pandemic had made it impossible to hold the 2021 IIPC and industry had not managed to get together since the meeting in Tokyo in 2018.

Partly as a result of that lengthy hiatus but also, as reflected in the first part of this report (HCB November 2023, page 52), because of the existential threats to the reconditioning business coming from regulators in Brussels and Washington, there was a healthy crowd in the Marriot Hotel, eager to hear from speakers representing the various trade associations.

Following welcome remarks from conference chairman Philippe Verstraete, Paul Rankin (chairman of the International Confederation of Container Reconditioners, ICCR) and Domenico Rinaldini (chairman of the International Confederation of Drum Manufacturers, ICDM), moderator Jörg Höppner of the European Association of Steel Drum Manufacturers (SEFA) first introduced Mathias de Clerq, the Mayor of Ghent, who invited the audience to make the most of their stay and enjoy the wonderful and hard-working city.


First up to report on reconditioning activities was Pim Janus, chairman of the European Association of Container and Drum Reconditioners (SERRED), which has 22 full member companies across 14 European countries. The Covid period was, he said, a good business time for industrial packaging in Europe but, more recently, inflation, weak demand, the Ukraine war and labour issues have conspired to dampen business activity.

Sales of reconditioned steel drums (open- and tight-head, 200 to 220 litres) in the EU peaked in 2020 and 2021 at around 6m units, compared to just over 4m in 2018 and 4.75m in 2022. The smaller market for reconditioned plastics drums has also come of a peak of 570,000 to 600,000 units per year in the period 2016 to 2019, falling to under 520,000 units in 2022. EU sales of reconditioned 1,000-litre rigid and composite intermediate bulk containers (IBCs), both cleaned and rebottled, were on a strong upward trend from 2.24m in 2015 to 4.32m in 2019 and have since stabilised around that level, with a slight drop last year to 4.18m.

Looking ahead, Janus said, reconditioners are seeing increasing demand for improved environmental care and energy efficiency. The proposed EU Packaging and Packaging Waste (PPW) Regulation should increase efforts to re-use packagings, which could be good for the sector, though SERRED will have to continue its lobbying work in Brussels to try to ensure a workable solution. He also noted that there is an increasing integration between the manufacturing and reconditioning sectors, with some of the major drum and IBC producers investing in expanding their reconditioning services, while users are demanding higher safety and performance from reconditioned packagings.

Things are rather different in Japan, as Noriyuki Yokoyama of the Japan Drum Reconditioners’ Association (JDRA) reported. The long-term trend is seeing sales of new steel drums rising compared to reconditioned units. Up until 2001, sales of reconditioned drums outstripped new units but, Yokoyama explained, increasing automation by manufacturers led to increased output of new drums, while also allowing the use of thinner gauge steel, which cannot be reused as many times.

Overall, just under 25m steel drums are produced each year, both new and reconditioned; of these, some 45 per cent are new drums used for chemicals. Reconditioned drums tend to be used in the petroleum and paint sectors. To help support the sector, drum reconditioners have been extending their used drum collection and transport systems; they also act as dealers for new drums.

Yokoyama looked in more detail at the Covid years, which featured a sharp drop in Japanese economic activity at the beginning of the pandemic, despite there being very few cases of the virus in the country at the time. That led to a sudden 10.8 per cent drop in output of reconditioned drums and, over the four years since the 2019 sales peak, a 21 per cent decline in business. Sales are also being impacted by rising prices, especially since 2022.


Tim O’Bryan, chair of the Reusable Industrial Packaging Association (RIPA), spoke about the reconditioning industry in North America, which he said is healthy but threatened by potential regulatory changes on the part of the US Environmental Protection Agency (EPA). Having said that, 2021 was a very poor year for business, especially for steel drums. A fall in steel production in the US during the Covid period meant that there were fewer used drums coming to reconditioners, so output of reconditioned 55-gallon steel drums dropped from an average of just under 25m per year in the period  from 2013 to 2019 to just 17.4m.

Figures for plastics drums were little better; 2.6m units were reconditioned in 2021, with 1.8m being scrapped. This compares to closer to 5m in 2019. O’Bryan had happier news from the IBC sector, where output of reconditioned composite IBCs continues to grow. In 2021, 1.16m IBCs were washed and 2.4m re-bottled or cross-bottled, giving a total of almost 3.6m. Just under 2m were scrapped.

There has been a long-term trend towards consolidation among the major players in North America, though this process slowed during the Covid period. Nevertheless, there is an appetite for more acquisitions among the major players.

Aside from the threat from EPA, US economic activity is not helping reconditioners. Inflation has remained stubbornly high and, along with a tight labour market, this has resulted in significant rises in wage costs – a problem that is affecting all manufacturing companies. Wages for employees at reconditioning plants have increased by at least 30 per cent over the past 18 months, O’Bryan said, and most reconditioners are finding it very difficult to hire enough workers to maintain production at the desired levels.

A welcome addition to the line-up of speakers was Raj Lochan, CEO of the South African Industrial Container Reconditioners Association (SAICRA), which was formed in 2012 (with help from SERRED and ICCR) to promote the role of the sector and to help it deal with the new wave of extended producer responsibility (EPR) legislation and the National Waste Management Strategy in South Africa. The EPR Regulations themselves were published in November 2020 and amended in May 2021 for implementation; since then there have been new requirements coming into effect for many industrial sectors, including paper and packaging, lubricants, pesticides and portable batteries. SAICRA now acts as the producer responsibility organisation (PRO) for the drum reconditioning sector, which now numbers between 35 and 40 companies across the country.


After a quick break for coffee it was the turn of producers to take the stage, with SERRED’s Michael Eigner acting as moderator. First up was SEFA’s Domenico Rinaldini, who said that output of new steel drums (185 to 250 litres) has fallen sharply since the Covid emergency began, from 31.2m in 2019 to 26.8m in 2022. At the same time, turnover has shot up as a result of input costs (both for raw materials and energy) that have been passed on down the chain.

The average weight of a new steel drum continues to fall, from 17.6 kg in 2000 to 16.4 kg last year, as a result of technical improvements that have allowed tighter tolerances. European drums are also very much lighter than those produced in Japan, Rinaldini noted, which are mostly around 23 kg.

European drum manufacturers are now facing several issues, Rinaldini added, handing over to his colleague Niko Tessin to take the audience through the EU’s draft PPW Regulation. There are some good things on offer, not least that, by replacing the current Directive with a Regulation, there will be a harmonised approach across the EU. In addition, recycling will be promoted. But, for SEFA, the main problem is that drums (as well as pails, IBCs and other primary packagings) are listed as ‘transport packaging’ in Article 26, which will set re-use targets that will likely be unrealistic for European-gauge steel drums.

Paul Rankin enquired why the term ‘industrial packaging’ was not used; this would give an opportunity for the EU to establish a difference between ‘industrial’ and ‘consumer’ packaging that could be helpful to industries in other parts of the world.

This is not a problem facing the Industrial Steel Drum Institute (ISDI) in the US, though chairman Kyle Stavig, CEO of the Stavig Group, did remark that the discussion about the EU’s PPW Regulation was one of the reasons that industry had made the trip to Ghent. He also had to reveal that he was unable to bring updated production survey data to present to the audience, since the Industrial Packaging Alliance of North America (IPANA), of which ISDI is a member, has not been able to meet the Federal Trade Commission’s anti-trust requirements for information exchange. Ongoing consolidation has made it impossible to comply. However, it is clear that more industrial packaging is being used in North America as a result of comparatively low energy costs that have encouraged some relocation of manufacturing activity to the US.

One major problem area for ISDI is the calculation of Scope 3 emissions, where significant differences remain across rating agencies. It is working with other associations and has also opened a dialogue with its own manufacturer members to establish how each calculates the greenhouse gas emissions involved in the production of a new steel drum. ISDI believes it would be beneficial to all if there is a consistent methodology, particularly as customers and regulators are pushing for the information.


Torben Knoess, general secretary of the International Confederation of Plastics Packaging Manufacturers (ICPP) spoke about how, along with ICCR, it had worked to get a change adopted into the UN Model Regulations on the use of recycled plastics in IBCs. A lot of ICPP members have shown that high-quality dangerous goods packaging can be produced from recycled material, he said, and, as the regulators have become more comfortable with the idea, industry has managed to get a reduction in the batch testing requirements accepted. The aim is to maintain batch tests for recyclate in order to ensure consistent quality but to require only an initial type test for finished packaging, as for new material.

There were also presentations on fibre drums. Rob Lee, president of the European Association of Fibre Drum Manufacturers (SEFFI) said that the European market for fibre drums is steady at around 5m units per year, though this is much lower than the levels seen prior to 2008, when production by SEFFI members exceeded 12m drums per year. Still, SEFFI is optimistic that environmental regulation will support growth in demand.

Greif’s Lacy Winchell gave the audience an introduction to the International Fibre Drum Institute (IFDI), which is one of the four members of IPANA. Winchell, vice-chair of IFDI, highlighted the fact that it has only two members: Greif and Mauser. Together, they were responsible for selling some 16m fibre drums in North America in 2022. The market remains strong but it is getting easier to recondition or recycle other packagings, which makes fibre drums less attractive from the standpoint of sustainability. Fibre drum producers are also using more liners and other non-renewable items in fibre drums that means they cannot be recycled through older paper mills in the US. Still, fibre drums have advantages in terms of cost, ease of handling, customisation and the range of products they can handle.

Next month’s HCB will report on other presentations from IIPC 2023.

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