More UK Packaging Companies Investing Overseas

Traditionally, the major markets within the packaging industry have been across Western Europe, North America and other parts of the developed world. However, during the past decade more companies have seen the benefits of investing within the emerging markets, developing office and plant facilities in these areas. These units include all the necessary equipment, including pallet wrappers, which are required to enable the companies to expand their operations in emerging markets. However, this process isn’t without its risks, and companies can face some major challenges when establishing their operations overseas.

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The Development of Emerging Markets

Emerging markets provide packaging companies with a number of benefits, including reduced labour costs, tax advantages and a growing consumer market. Currently, these areas make up over 40% of the global economy and have around 82% of the total population. However, predictions show that within the next decade these markets will account for over 70% of the global GDP.

This means that there is a huge amount of potential for these particular markets to grow further. Mass-market retailing is yet to be fully developed, and there is a middle class who are becoming more consumer-driven. These factors are increasing the requirement for packaged goods, growing the market that is open to UK businesses.

The Challenges of Overseas Investment

Even with all of the benefits that can be achieved from investing in these emerging markets, this activity is not without its challenges. Before businesses take the first step on the ladder and invest in facilities with machines, such as those available at http://www.packaging-machines.co.uk/, they need to fully understand what is involved.

The cultural and language barriers are among the key elements, so having someone local who can interact and build up relationships would be beneficial. These countries may also lack the systems and processes, such as management and IT infrastructure, that we take for granted in developed markets. Other restrictions businesses can face overseas are under-developed transport systems and automation facilities, as well as a lack of appropriate training and education for employees. All of these elements can restrict the growth potential of companies investing in these markets, but they are not insurmountable.

As the UK market becomes more saturated, companies will undoubtedly look to the next area of development, and these emerging markets have good prospects.

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