This article first appeared in the February 2025 issue of ProPack.pro, authored by Impact International’s Aleks Lajovic

2024 was a tale of two halves. The first six months was extremely busy, with order levels very strong.

We then saw a decline in order levels in the second half of the year. Ever increasing costs – especially government-controlled costs – and a lack of skilled staff were two major issues that we had to face in 2024.

No matter how we tried, we could not get the percentage increase to our cost base anywhere near the official inflation rate. Sadly, we continued to see our supplier base shrink in 2024. On the positive side, Impact International installed two production machines in 2024, further adding to our capabilities.

Throughout 2024, we maintained focus on quality and sustainability. Our sustainable forest program remained well supported and we continued to work with our customers to move from non-recyclable packaging formats into packaging that is designed to be recycled.

Back in August 2022, we planted more than 5000 trees at the Impact Forest. These trees are growing well and as a result our carbon capture rates for the forest are increasing. We remain the only packaging company in Australia who operates their own forestry infrastructure to offset the carbon footprint of the packaging that we manufacture.

We also continued to support the Penrith Museum of Printing, the Zen Tea Foundation, and the Exodus Foundation – all worthy causes close to our hearts.

We also communicated regularly with our customers, informing them of the current market conditions and updating them on projects that we were working on.

This year, we will be focusing on further strengthening our position in the market by offering an improved value proposition. We firmly believe that cheapest is not best; however, customers must see clear value in accepting a superior product which comes with a higher price tag.

We will also continue to develop new product offerings in accordance with the guidelines issued by APCO. Staff retention will also remain a priority as will supporting suppliers who manufacture in Australia.

The next 12 months will be uncertain for the broader packaging market. I expect our cost base to continue to increase, and a lack of skilled production staff will remain an area of concern.

I predict further consolidation in the packaging landscape, as higher electricity pricing and other fixed costs erode the bottom line of many packaging business. As many packaging companies are heavily reliant on overseas-based supply chains, the value of the Australian dollar versus other major currencies will add further pressure on Australian packaging companies. The decreased value of the Australian dollar will also weaken the business case for purchasing new production equipment.

Achieving meaningful growth in 2025 will be challenging, due to a lack of available skilled staff and softer consumer demand. If a business can offer an ‘add on’ to existing customers (think of McDonald’s, ‘do you want fries with that?’), then these sort of increased sales values to existing customers offer the good growth opportunities in 2025.

We were surprised to be told by some of our customers in 2024 that Black Friday sales were more (or equally) important to their business than the Christmas trading period.

My predictions for 2025 are that sustainability will continue to be at the forefront of the industry although the customers’ ability to pay a higher price for a more sustainable form of packaging may be reduced.

Global shipping may become more expensive and prone to longer delays as international supply chains adjust to the new geopolitical landscape that we find ourselves in. I also expect interest rates to stay at current levels for the majority of 2025, which will further restrict economic growth.

As part of our sustainability commitments, Impact International is also working on a new cap design, which is currently in the trial stage, and if successful, will help many of our customers with their sustainability goals.

My message to the industry for 2025 is to support each other. Sadly, we regularly hear about packaging and/or printing companies closing. Successful stories about new packaging or printing businesses opening are rare.

As an industry, we must do what we can to support the other companies in our industry. For example, we could purchase pallet wrap from overseas at a slightly cheaper price, however, we choose to purchase Australian made pallet wrap.

Our view is, the stronger the packaging industry is as a whole, the stronger our business will be. We need to keep focusing on key points of difference that will help our customers, and that the end consumer sees the value in Australian made packaging. The weaker the industry gets, the harder this becomes.