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    Packaging Power


    © International Trade Centre, International Trade Forum - Issue 4/2004

    Photo: ITC Top-end, high-quality packaging is the "front-line ambassador" that attracts and informs prospective customers and differentiates a product from its competitors. Asia's flourishing packaging industry has a full range of design, printing and production skills, making the region a packaging powerhouse.

    High-quality packaging is becoming a key to successful competition in the most lucrative developed markets. ITC is spreading both the message and the means for small and medium-sized enterprises (SMEs) worldwide to embrace better packaging. ITC's work in Sri Lanka since the early 1970s exemplifies a turnaround in a country's packaging industry.

    The scene appeared to be the same as it always had been during the old man's long life. A terrace high above Sri Lanka's tea country, aged hardwood chairs and an elegant tea table looked down on lush tropical plantations. The flat, post-dawn light blessed the early part of the day before the heat began to build. The familiar rhythms and sounds of breakfast being served were part of a world the tea planter had always known. And yet, there was something different today.

    The old man's grandson, who was to inherit the 200-year-old family tea business, had joined him for breakfast. "We sell an organic Earl Grey blend to specialist shops in London, San Francisco and Hong Kong and a breakfast tea to one of the largest supermarket chains in Ireland. Our packaging doesn't just protect and keep the tea fresh but it tells a story of where it's from and what meal it is best to drink with," explained the young businessman.

    The older man, a sharp trader and businessman in his time, was impressed by his grandson's passion and - after carefully examining a range of packaged speciality teas placed on the table - motioned for him to continue. "These are exciting times, Grandfather. We have just received fair-trade certification because of the profit- sharing agreement we implemented with our tea pickers, which helped them create a micro-lending bank. All our packaging is now marked with the fair-trade logo. Some of the biggest European buyers of specialist teas have contacted us and want to know more about how we achieved fair-trade status," he added.

    The elderly patriarch saw the business sense of the new approach to packaging - and using packaging to market the different types of tea for a broad spectrum of retail clients - in a flash. This was an educated young professional adapting the family business to the changing demands of new world markets, he thought. As he sipped his favourite dark tea, the old man reflected on how the world had changed since Sri Lankan tea was shipped as a raw commodity to Western capitals in simple wooden tea chests.

    Helping Sri Lanka

    In the early to mid-1970s, ITC consultants working in the Sri Lankan packaging industry were, quite literally, rolling their shirt sleeves up and getting their hands dirty. In those days, ITC technical support often required international packaging specialists to take tools onto the factory floor and adjust the packaging machines themselves. Advising selected companies directly was the most efficient way for them to learn and benefit from the exporting advantages that higher-quality packaging brings.

    The results of providing direct, targeted expertise can still be seen in exports of Sri Lanka's most economically important product. ITC's efforts, with financial support from the government of the Netherlands, helped boost the added value to the country's vital tea exports by introducing more sophisticated packaging and branding. In less than two decades, Sri Lanka's tea exports shifted from 100% exported as a bulk commodity to as much as 30% sent overseas in the form of value-added products.

    A driving force

    The vision and passion of a few men helped spark the packaging revolution in Sri Lanka and lay the foundation for better in-country capacity to provide packaging advice. A few leading Sri Lankan industrialists, along with the Export Development Board and the late Johan Selin, ITC's Senior Packaging Adviser, were the driving force which saw the creation in 1975 of the Sri Lanka Institute of Packaging and subsequently, in 1983, the country's National Packaging Centre.

    In an assessment in 1973, Mr Selin concluded that the country's packaging industry was in a "desperate and deplorable" state. The forceful report prompted action. The creation of the packaging institute, which followed ITC's recommendations, saw leading figures in the country's packaging industry come together to share information and experiences with the goal of raising standards and offering better services to the country's exporters.

    Dharma Ratnayake, a Sri Lankan packaging expert and now President of the Sri Lanka Institute of Packaging, joined the institute shortly after its creation and established a close working relationship with Mr Selin after he carried out an assessment of the Sri Lankan packaging industry in 1983.

    Mr Ratnayake, a member of the institute's Governing Body since 1978 and now President of the Asian Packaging Federation (APF) and Vice President of the World Packaging Organization, remembers Mr Selin's drive, energy and commitment to packaging in Sri Lanka. "Mr Selin is regarded as the 'father of packaging' in Sri Lanka and was active in improving packaging standards in many other Asian countries," he explains. Mr Selin's influence on Sri Lanka's packaging industry was such that he was made the only non-national honorary member of the Sri Lankan institute, which brings together major packaging suppliers and users.

    Promoting packaging quality

    ITC's approach to building in-country capacity for packaging advice - in Sri Lanka and across countries in the region - was based on developing long-term relationships with key players in the packaging industry. It was underpinned by energetic promotion of new ideas to consistently improve packaging quality. In time, ITC's support of the Sri Lankan and Asian packaging industries allowed a "packaging quality revolution" to take hold in the region.

    The APF President says that the emergence of Sri Lanka's packaging institute as a forum to exchange information and promote common interests, and the subsequent creation of the packaging centre, drove a sea change in the country's approach to packaging. These institutions were instrumental in creating a focal point for "qual-
     ity upgrading of packaging through information, training and other forms of capacity building". He adds, "Once the National Packaging Centre was founded, Sri Lankan experts travelled abroad to learn advanced packaging techniques and the country's industry moved rapidly away from crude approaches to packaging."

    Asian packaging: A revolution unfolds

    From their early work together in Sri Lanka, Mr Selin and Mr Ratnayake became part of a forward-looking vanguard of professionals who spread the ideas and methods of the packaging revolution across Asia. "ITC has helped many countries in Asia to upgrade the standard of their packaging industries and was also instrumental in creating the Asian Packaging Federation. ITC promoted a national packaging organization as being vitally important for any country. It also supplied testing and other equipment, business-friendly technical information and export packaging notes, and manuals on export packaging around the region," explains Mr Ratnayake.

    The APF President highlights several ITC-promoted developments that helped lay a strong foundation for the promotion of packaging in a number of Asian countries:

    • In the early 1980s, ITC was involved in restructuring and expanding the functions of the Pakistan Design Institute.
    • In 1988, ITC and other bodies supported the development and publishing of the Asian Packaging Directory.
    • ITC helped develop packaging capabilities at the Thailand Institute of Scientific and Technical Research and encouraged the Thai Packaging Centre to become active in the APF.
    • In 2003, the Thai Packaging Centre received support from ITC to organize a seminar on export packaging for fresh fruit and vegetables.Mr Ratnayake believes the early foundations for the Asian packaging industry were critical and that the relationship between APF and ITC will continue to flourish. Through ITC, the Asian Packaging Federation is now linked to more than 120 packaging industry associations and groups worldwide, which share a wealth of experience. The network is promoting intra-industry cooperation. For example, Canada now directly supports efforts to upgrade packaging in Tanzania and Ghana.
    For Mr Ratnayake, the relationship between ITC and packaging advisory centres across the region remains crucial in efforts to bring packaging up to world-class standards in many Asian countries. "Although we've made great strides in packaging in Asia, there are a large number of mdeveloping nations in our region without recognized national packaging bodies. It is critical for a country to have a recognized packaging institute or centre if support from organizations like ITC, the World Packaging Organization or the Asian Packaging Federation is to be effective in upgrading its packaging industry."

    "The recent arrival of Jacky Charbonneau as the new ITC Senior Adviser, on Export Packaging is a very positive development. He has shown a keen interest in working closely with APF and its member countries," he adds.

    Building on traditional skills

    The world of packaging is moving to adjust and adapt to emerging standards and client demands. Thanks notably to the last three decades of ITC's packaging work in the region, Asian packaging is well placed to respond to the new challenges. The graphic, colour and structural components of successful packaging design are all growing in importance in international markets. Many of the new skills in Asian labour forces, building on traditional artistic, design and printing skills, are a competitive advantage that can be built upon further.

    "These skills will be critical for the future," explains Mr Charbonneau. "Although preservation and protection of products are important, they are no longer enough. The use of packaging as a front-line ambassador to market and sell products, as well as to mindicate compliance with emerging standards through certification, is coming to the fore."

    He continues: "Increasingly, SMEs understand that they are competing in international markets and packaging is an important part of thatmcompetition. How do products stand out in the supermarket? A company's answer to that question greatly depends on the care, effort and creativity they put into packaging and how they use packaging to profile, differentiate and communicate their products. Packaging matters more than ever before."

    Asian packaging: Future trends and new challenges

    In coming decades, experts predict that the packaging industry in the Asia-Pacific region will outstrip other parts of the world in terms of volume and technique. A number of factors are at work, including: the sheer growth of business volume in the region and the growing demand for high value-added packaging; the sophistication and knowledge built up by the Japanese packaging sector that is being embedded in other Asian countries; and the development of world-class packaging and printing skills in China.

    The industry in Asia, however, is facing new challenges and needs to continue to adapt and upgrade its capabilities. Emerging regulations and standards, as well as health, environment and security concerns, notably in Europe, North America and Japan, are creating new and increasing demands on the packaging industries and their SME clients. With security issues gaining prominence, there is a greater demand by consumers to know not only the origin of a product, but also to be sure that it has not been tampered with anywhere along the supply chain. Traceability is just one example of the way in which packaging has to stay at the forefront of societal trends and perceptions.

    Packaging gains ground across Asia

    In recent years, ITC activities for Asian packagers have included:

    • Information seminars for executives and SME training programmes.
    • Facilitating SMEs' access to packaging knowledge and information through one of the most active networks of packaging information centres worldwide.
    • News, bulletins, toolkits and ad hoc advice on technical and

    • commercial issues related to packaging.

    • Country- and product-specific modules of PACKit, ITC's integrated packaging information kit for developing countries, providing practical information required by exporters.

    Writer: Alison Clements-Hunt

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