Italian packaging machinery sales top 8 billion euros

The Italian packaging machinery manufacturers have recorded their fourth consecutive growth year with a 2.2% increase in turnover in 2019. It is the only capital goods sector to see an upturn

The Italian automatic packaging machinery manufacturers are the only Italian capital goods producers to report growth in revenues in 2019 (+2.2%), thereby confirming the world leadership position of a niche mechanical engineering sector which for the first time in its history has broken the 8 billion euro revenue barrier..

The number of operative companies decreased in 2019 (down 2.4% to 616) as a result of the series of M&As underway in the sector, while the number of employees rose to 33,304 (+2.1%). 

These results were revealed in the Ucima-MECS Research Department’s 8th Statistical Survey, unveiled at the annual meeting held on 6th July in Modena. Over these last eight years (2012-2019), packaging machinery manufacturers have seen an almost 50% increase in turnover (from 5.5 to 8.04 billion euros), 40% growth in exports (from 4.56 to 6.35 billion euros) and the creation of 7,000 new jobs.

International markets

79% of the sector’s turnover was generated abroad, amounting to 6.35 billion euros, an increase of 2.3% compared to 2018. This export growth is half a percentage point higher than that of domestic Italian sales (+1.8% in 2019 to 1.69 billion euros). The European Union remains the main destination area for Italian packaging machinery and accounts for 37.5% of total turnover (2,383 million euros) including sales in Italy, followed in second place by Asia with a value of 1,402 million euros and a 22.1% share, then North America in third place with 814 million euros (12.8%). With respect to 2018, non-EU Europe (637 million euros; 10% of the total) has overtaken South America (559 million euros; 8.8%), followed by Africa (449 million euros; 7.1%) and Oceania (107 million euros; 1.7%).

Client sectors 

In the breakdown of turnover amongst the various client sectors, food and beverage maintained the previous year’s dominant position in 2019, when it accounted for 56% of total turnover. More specifically, food alone accounted for 29.6% of total sales (2,377 million euros) and beverages 26.4% with 2,120 million euros.

The pharmaceutical sector was in third place in terms of market volumes with revenues of 1,475 million euros (18.3% of the total), followed by the “Others” category (mainly tobacco and tissue) which accounted for a further 18.2% with 1,461 million euros of machinery purchases and the highest export propensity among all client sectors (84%).

Closing out the rankings were clients from the cosmetics industry (312 million euros), the most dynamic client segment in 2019 (+10.1%), and chemicals (stable at 292 million euros). 

The production structure

The 626 Italian packaging machinery manufacturers are mainly concentrated along the Via Emilia between Piacenza and Rimini (the so-called Packaging Valley), with further production districts located in Piedmont, Veneto and Tuscany. The Emilia-Romagna region alone accounts for 36% of industrial activities (221 companies), over 56% of employees and more than 63% of the sector’s total turnover. The three provinces of Bologna, Parma and Modena account for half of the sector’s 8 billion euro turnover.

The analysis by turnover class reveals a marked predominance of small companies (companies with revenues under 5 million euros make up two thirds of the total), although they account for just 8.4% of total turnover and 5.4% of exports. By contrast, the more structured industrial companies (there are 25 with revenues of over 50 million euros) account for 58% of turnover and 64% of exports. Company size also significantly influences profitability per employee, which ranges from 126,000 euros for smaller companies to more than double that figure (281,000 euros) in the case of companies with turnovers in excess of 50 million euros, making for a sector-wide average of 241,000 euros. There is a similar disparity in terms of qualifications: the proportion of graduates (and engineers in particular) is almost twice as high in companies with turnovers of more than 50 million euros as in smaller companies. 

2020 forecasts 

“We had predicted a slowdown in 2019 after four years of growth and the 9.4% increase recorded in 2018, but we are well aware that this year we will have to deal with the effects of the Covid-19 pandemic and consequently much lower performance figures to what we are used to,” notes Ucima’s outgoing chairman Enrico Aureli. “Most of our companies continued to operate during the lockdown, but our performance will be impacted by the overall slowdown in production activities and the drop in global demand.” For the first time after seven editions of the Ucima Statistical Survey, the percentage of Italian packaging machinery manufacturers expecting to see growth in business over the coming months has fallen to 20% (in 2019 the optimists made up half the sample), while more than 40% of entrepreneurs are anticipating a decline in revenues.