14.06.2023 - Aluminium Association

Current trends in the aluminium packaging mar-ket were discussed by the participants of the plenary session organised by the Aluminium Association as part of the 27th international packaging industry exhibition RosUpack.

Environmental friendliness and practicality The session on "Challenges of import substitution and labelling of aluminium packaging" at the RosUpack exhibition in Crocus Expo was attended by representatives of the Russian Chamber of Commerce and Industry, food, processing, chemical industry, medicine and pharmaceuticals, as well as catering, wholesale and retail companies.

The session was moderated by Elena Asanova, Director of the Aluminium Association for Coordination and Market Engagement. She outlined the range of issues that concern consumers and producers of different kinds of packaging. Is there a decrease in consumer demand for certain types of goods against the background of falling purchasing power? What is happening now with the withdrawal of major European packaging manufacturers from the Russian market? What impact will the introduction of ROP and mandatory labelling of certain products have on the aluminium can market?

Artem Asatur, deputy chairman of the Aluminium Association, noted that of all packaging materials, aluminium embodies the concept of lean consumption most fully. Metal is becoming increasingly sought after due to its safety, practicality and environmental friendliness. "Over the past few years we have seen a rapid growth in demand for aluminium cans. Producers saw this as a long-term trend and embarked on capacity expansion projects. Undoubtedly, the demand for eco-friendliness will remain one of the main market drivers," emphasised Artem Asatur.

Aluminium is the champion of recycling

What the coming ROP is preparing for us?
Natalia Kudenkova, head of the TNP sector of the Aluminium Association, noted that the beer market is the key consumer of aluminium cans in the country - more than 66%, while the share of aluminium in this segment has grown to 30%. She also recalled that in 2022, US aluminium can maker Ball sold its assets to Russian aerosol manufacturer GK Arnest.

Among the main challenges for the packaging industry, Natalia Kudenkova mentioned the decline in consumer power, the introduction of mandatory labelling of beer in aluminium cans from 15 January 2024 and mandatory labelling of soft drinks in aluminium cans from 1 March 2024, as well as the availability of spare parts and software for production equipment under sanctions.

Commissioning of new capacities:
2022 - opening of KazAlPack plant in Kazakh-stan
2024 - opening of Arnest plant in Ulyanovsk
2024 - commissioning of additional capacity of KazAlPack in Kazakhstan
According to experts' estimates, by the end of 2024 the production capacity of the EAEU for aluminium cans will increase by 25% compared to 2022, with an increase of 2 billion cans per year.

From 2019, mandatory labelling of goods has been introduced in Russia. A special Data-matrix code on the packaging helps prevent counterfeiting and adulteration. The aluminium foil lid plate solves the task of marking on aluminium cans, ensures leak-proof and hygienic packaging, and serves as a marketing tool.

Platinum material - fully domestic, more than 10 manufacturers of platinum in the Russian Federation and EAEU

Natalia Kudenkova paid special attention to extended producer responsibility (EPR). The introduction of ROPs means shifting the responsibility for the payment of the eco levy and the responsibility for packaging recycling to the packaging producers.

Natalia Belyaeva, Chair of the Commission on Ecology of the Council of the Chamber of Commerce and Industry of the Russian Federation on RESEE, member of the Russian Bar Association, General Director of the Delphi law firm, also addressed the topic of ROP. "Any obligation presupposes its fulfilment, so the key issues of both the current ROP model and the proposed one are the possibility of ensuring recycling standards through the involvement of industrial waste in recycling and the legal uncertainty of the status of ferrous and non-ferrous metal scrap and the procedure for handling them. At the same time, the removal of administrative barriers for companies to independently fulfil their extended responsibilities is of paramount importance for achieving the declared goals of transforming the ROP mechanism. Selective application and (or) interpretation by control and supervisory authorities of the norms of the current legislation now has a negative tendency. Requirement to obtain SEE for widely used equipment, technologies, giving ROP entities obligations that are absent in the law (e.g., to transfer waste from their goods for recycling), refusal to accept PSAs drawn up by scrap metal procurement companies as evidence of involvement of scrap metals in recycling, etc. All this discourages business and requires the regulator's intervention," says Natalia Belyaeva.

Anna Markina, head of corporate affairs at Arnest Packaging Solutions, the country's largest aluminium packaging manufacturer, also addressed the topic of the introduction of ROP next year. Amendments to the federal law on waste suggest that packaging producers are responsible for its recycling, with a recycling rate of 100%. However, mechanisms for implementing the provisions of the ROP, as well as incentives for producers, are still under development. Anna Markina cited the example of Belarus, where aluminium has been removed from ROP regulation and incentives include full compensation of the levy if the packaging contains a certain percentage of recyclable materials.

Demand for domestic
As noted by experts who spoke at the session, the departure of global brands and the hindrance of exports to the EC is making room for Russian producers. For example, there has been an increase in demand for combination materials, laminated paper foil and plain foil, particularly in the dairy, baby food, cigarettes and animal feed segments.

Demand for aluminium caps and capsules for champagne and wine and spirits products increased. In 2022, RUSAL covered the entire demand for raw materials for capsules and caps for spirits, which increased due to the withdrawal of imported raw material suppliers and increased domestic production of still and sparkling wines. Aluminium foil is widely used in the food and packaging, container and pharmaceutical industries.

The session presentations are available on the Aluminium Association's website: link.