Malaysia Corrugated Packaging Market SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024 - 2031)

Malaysia Corrugated Packaging Market Analysis

The Malaysia corrugated packaging market size is expected to reach US$ 1.60 Bn by 2031, from US$ 1.00 Bn in 2023, growing at a CAGR of 6% during the forecast period. Corrugated packaging is made from a combination of sheets of paper called liner and flutes. Corrugated boxes protect the products due to their cushioning qualities, rigidity, bursting strength, puncture resistance, and edge crush resistance, which enables them to bear impact through movement and transportation.

Malaysia Corrugated Packaging Market Drivers

• Growth in the e-commerce sector: The rise of e-commerce has led to a significant increase in the demand for corrugated packaging solutions in Malaysia. As more consumers opt to shop online instead of visiting physical stores due to convenience and availability of a wide array of products, the need for secure and sturdy packaging for delivering goods has expanded multi-fold. Corrugated boxes and containers have emerged as the packaging of choice for e-commerce entities as they provide protection from damage during storage and shipping activities.
• The growing adoption of e-commerce is being facilitated by increasing internet and smartphone penetration in the country. According to the Malaysian Communications and Multimedia Commission, the internet usage in Malaysia grew by 8.4% to reach 31.3 million users in 2021 compared to the previous year. This spike in online activities and transactions has necessitated the use of corrugated packaging for wrapping, carrying and protecting items purchased digitally. E-retailers are opting for corrugated packaging solutions in large volumes as they offer cost-efficiency compared to alternatives while providing the needed protection and convenience in online deliveries.

• Increasing demand for sustainable packaging solutions: The growing awareness surrounding sustainability and environmental protection has significantly fuelled the demand for eco-friendly packaging solutions across industries in Malaysia. Companies are under increasing pressure from consumers as well as regulations to reduce waste and adopt sustainable business practices. This has provided a major impetus for the growth of the corrugated packaging market in the country.
• Corrugated packaging is widely regarded as one of the most sustainable options available due to its properties. It is made wholly from renewable and biodegradable materials like paper. A single corrugated box can be reused and recycled multiple times, thus allowing products to be transported efficiently while minimizing the negative environmental impact. It also provides excellent protection to products during shipping and distribution. These advantages have made corrugated boxes very popular for packaging goods in industries like consumer goods, food and beverages, pharmaceuticals, and personal care.

Malaysia Corrugated Packaging Market Restraints

• Strict government regulations: Strict government regulations on raw material sourcing and production processes are placing considerable restraints on the growth of the Malaysia corrugated packaging market. The industry has to comply with stringent guidelines pertaining to sustainable sourcing of raw materials like paper, plastic and adhesives. Only suppliers that can provide proof of using recycled content and materials from renewable tree plantations are approved as vendors. This makes the procurement process very lengthy and increases overheads for manufacturers.
• These regulatory challenges are slowing the pace at which the local market can scale up to fulfil the growing packaging needs of various end-use industries. As per the Food and Agriculture Organization (FAO) database, Malaysia's food production had grown at an average annual rate of 2.7% during 2010-2020, driven by rising consumer demand as well as exports of agricultural goods. 

• Fluctuations in raw material prices: Fluctuations in raw material prices have presented a significant challenge for the growth of the Malaysia corrugated packaging market in recent years. Corrugated packaging is heavily dependent on raw materials such as containerboard, which is manufactured using recycled paper and virgin pulp. However, the prices of these key inputs have experienced considerable volatility over the past few years. For instance, the price of pulp reached close to RM 3000 per tonne in January 2022, representing an increase of over 30% compared to January 2020, according to statistics from the Federation of Malaysia Manufacturers. Similarly, prices of recovered paper, another crucial input used in containerboard production, surged by around 25% between 2020 and 2022 according to data compiled by the Environmental Protection Department, Ministry of Energy and Natural Resources, and Government of Malaysia. This rise in raw material costs has negatively impacted producers' margins and restricted their ability to scale up operations and cater to the growing packaging demand.

Malaysia Corrugated Packaging Market Opportunity

• Innovation in packaging styles and designs: Innovation in packaging styles and designs could provide significant opportunities for growth in the Malaysia corrugated packaging market. As consumption patterns evolve and more products are purchased online, there is a growing demand for eye-catching and sustainable packaging solutions. Corrugated packaging manufacturers that invest in research and development of new designs, materials and printing technologies will be best positioned to capture this demand. Some areas that show promise for innovation include customizable and personalized packaging that allows brands to engage customers on a deeper level. Customers are increasingly looking for packaging that reflects their individual style and values. Tailored designs for specific products or occasions could help products stand out on shelves and online. Furthermore, virtual and augmented reality printing that brings packaging to life through interactive and immersive digital experiences may gain popularity among younger consumers. For example, QR codes on packages could link to product videos, assembly instructions, or other digital bonus content. However, those able to provide differentiated customer and planet-friendly packaging experiences will be well positioned for ongoing success in this dynamic market.
• Export opportunities to other Asian countries: Export opportunities to other Asian countries could provide immense potential for growth in the Malaysia corrugated packaging market. As emerging economies in regions like Southeast Asia continue to industrialize rapidly, the demand for packaging from key industries is set to increase substantially. With its strategic location within Asia and strong manufacturing base, Malaysia is well-placed to capitalize on the emerging needs of proximate markets. Malaysia already exports corrugated packaging products to several regional countries. However, there remains significant untapped potential in further expanding to smaller Asian nations. For instance, Cambodia, Laos, and Myanmar are growing steadily but have underdeveloped packaging sectors currently. Their manufacturing and consumer sectors will undoubtedly require greater packaging volumes in the coming years as incomes rise across the population. By establishing early relationships and investing in distribution/warehousing infrastructure within these developing Asian markets, Malaysian corrugated packaging producers can gain an advantageous foothold.

Analyst View Point:

The Malaysia corrugated packaging market is expected to see steady growth over the next five years. The expanding e-commerce sector will be a key driver of demand as online shopping continues gaining popularity in the country. Growing consumerism and industrialization will also contribute to higher needs for corrugated boxes and packaging for shipping various goods. That said, availability of alternatives like flexible packaging may pose a challenge to volume growth of corrugated products to some extent. On the positive side, Malaysian government initiatives to promote domestic manufacturing and exports are likely to benefit corrugated packaging companies by spurring demand from industries.

The eastern region of Peninsular Malaysia housing major industrial hubs around Klang Valley holds the largest share currently. However, the northern states could emerge as fast expanding markets going forward. Sarawak on Borneo Island also shows significant potential for corrugated packaging manufacturers given ambitious plans to develop itself as a key manufacturing center. Overall, demand for high-quality corrugated packaging from multinational companies establishing operations in Malaysia is expected to rise. At the same time, strict environmental norms may push players to develop sustainable corrugated packaging solutions using recycled content.

Malaysia Corrugated Packaging Market Trends

• Shift towards lightweight and customized corrugated packaging: The demand for more sustainable and environment-friendly packaging solutions has been steadily increasing in Malaysia over the past few years. Manufacturers are under pressure to reduce the amount of material used in packaging without compromising on protection and functionality. This has led to a significant rise in the demand for lightweight and customized corrugated packaging options. By utilizing new design techniques and materials, corrugated packaging manufacturers can now offer solutions that use 15-20% less paper fiber while still meeting the packing needs of their customers. This allows businesses to lower packaging costs as well as their carbon footprint. It has also opened up opportunities to produce packaging targeted for specific products or of non-standard dimensions, helping brands better utilize space and shelf presence. This will encourage more companies to adopt eco-friendly packaging and push corrugated product developers to innovate even lighter designs. Those that can meet these rapidly evolving needs of the market are projected to see continued growth.
• Advancements in corrugated packaging machinery: Advancements in corrugated packaging machinery is having a significant influence on the Malaysia corrugated packaging market. The new generation machines are much more automated and come equipped with advanced digital technologies that are improving both efficiency and sustainability in production processes. For example, new fully automated corrugated sheet production lines with integrated management software allow operators to digitally monitor and control the entire manufacturing workflow from raw material feeding to packaging of finished goods. This level of automation and digitization streamlines operations, reduces human errors, and improves overall equipment effectiveness. It maximizes production output while minimizing material wastage from the factory floor. For instance, as evidenced by the Ministry of Health Malaysia reports, advanced packaging had played a vital role in the successful transportation of COVID-19 vaccines across the country in 2021. In summary, technological progressions are positively impacting production capabilities as well as boosting sustainability and competitiveness of the Malaysia corrugated packaging market.

Figure 1. Malaysia Corrugated Packaging Market Share (%), By Product, 2024

Recent Developments in Malaysia Corrugated Packaging Market

Malaysia Corrugated Packaging Market Segmentation