JAPAN - The Japanese packaging conglomerates are not known for risk-taking, so when Nihon Canpack invests US$83.8 million in a new greenfield NASA certified 1,200bpm asceptic PET bottling and filling plant in the face of a shrinking market it is possible that they know something the others don’t.

The Japanese beverage market has been in a state of flux in recent years, brand-owners under pressure of a saturated market, static consumer prices and rising material costs have eroded Japan’s packaging industry market share, by bringing filling and packaging in-house.

Previously, Japan’s industry structure had the brand owner commission converters to supply the final formed bottle to their contract packer for filling and packaging.

However, in the past ten years the top four brand owners have opened their own bottling and filling lines. While the filler has added bottling capabilities, leaving the bottle converter with very little market space.

Some bottle makers have diversified into new markets, while others have simply become perform suppliers to brand owner and filler.

Nihon Canpack (NCP) firmly dominated the filling end of the business, first as an aluminium can packer back in 1973, and later, as beverages moved towards plastics, NCP shifted with the trend and expanded the business.

A subsidiary of the Hokkai Can Group, NCP now has a total of 20 filling lines, 11 of which are PET, and produces more than 1,500 million cases annually – with 24 bottles per case, Nihon Canpack puts a staggering 36 billion bottles into the Japanese market each year!

Even though a leader of the pack, NCP has seen market shrinkage over the past ten years: “Currently NCP’s market domain is in the : PET filling, cans & retort packaging business” says Kazuyoshi Nishimura, NCP Executive Managing Director, “But cans and retort is a declining market, so for us to stay ahead of the trend we had to outpace the steady march of the brand owner into in-house production or define new markets.

“In the old days, NCP, like others, built our market by supplying a generic bottle shape however over the past ten years the market direction has shifted to the point where it is becoming harder and harder for customers to differentiate their product brands from each other (especially in the tea market) brand owners are looking to the bottle style ans shape to give them the shelf-appeal they need. To the point where they now supply different shapes for each product line.

Since the actual production of the product is determined in collaboration with the filler, stand-alone bottle makers have been shifting capability to move into the filling arena.