Enduring challenges in times of change
Thai can makers have faced tougher market conditions during the past 18 months. Image: Shutterstock
The Thai Metal Packaging Association (TMPA) reports mixed fortunes as Covid-19 impact on food can demand finally ends. David Hayes discusses
Thailand’s can manufacturing industry has ridden a roller coaster for the past few years, with major events outside of can makers’ control – the Covid-19 pandemic and the current El Niño weather phenomenon – causing unforeseen changes in demand for cans each year.
Thai can makers have faced tougher market conditions during the past 18 months due to increased global competition among leading canned food exporting countries in 2022, as can and food processing factories closed by the Covid-19 impact started re-opening in other countries. Meanwhile, the supply of some raw materials to the country’s canning industry this year has been disrupted by recent drought weather conditions.
The beginning of the Covid-19 pandemic created a sudden boom in food can orders for Thailand’s can manufacturers from mid-2020 as millions of families around the world started to rush out and buy canned food to store at home in case of food shortages. The sudden leap in orders lasted for just over a year. Demand for food cans then fell more than ten per cent in 2022, as canned food production bounced back in other exporting countries after being disrupted by Covid-related can and food processing factory closures. This year, Thai can makers are facing a different set of problems as the effects of the El Niño weather phenomenon have reduced Thailand’s agricultural and fisheries output.
According to figures released by Thai Food Processors’ Association, canned tuna exports fell 10.6 per cent year-on-year to 294,000 tons during the six month period January-June 2023, while canned pineapple exports showed an eight per cent year-on-year drop during the first half of 2023.
General cans made to hold dried food, including confectionery, and speciality cans are important categories. Image: David Hayes
Since 2016, total consumption of tinplate (TP) and tin-free steel (TFS) used for can making in Thailand has fluctuated between 500,000 to 600,000 tons a year, according to figures published by Thailand Customs, and depending on prevailing can market conditions. Average consumption is just over 560,000 tons annually. TP/TFS consumption rebounded sharply in 2021 after falling 7.1 per cent to about 518,000 tons usage the previous year.
“In 2021 there was TP/TFS consumption of 584,805 tons, but in 2022 consumption reduced to 517,978 tons which is a decrease of 11.5 per cent,” commented Thanasak Rojvoraporn, secretary of the Thai Metal Packaging Association (TMPA), and deputy managing director of Tin Can Industry Co Ltd, which manufactures general cans.
“If you look at the data for 2021, you can see this is during the Covid-19 pandemic period. Thailand had better control of the Covid pandemic than some other countries, allowing us to produce cans and canned food at that time. We also supplemented other places that some countries could not supply to as they were unable to open their factories for production.”
TMPA represents Thailand’s tinplate and TFS can making industry. According to the association, food cans account for about 70 per cent of Thailand’s total steel can production being filled for export worldwide.
General cans made to hold dried food, including confectionery, and speciality cans are other important categories. Similarly, paints, motor oil and edible oil cans are among other major product categories filled in steel cans.
According to Thai government figures, canned food represents an important share of the country’s total food exports. Thailand also represents the world’s number one exporter of canned tuna, canned pineapple and canned sweet corn; while the country is also a major exporter of various other canned seafood products and some other foodstuffs. As the global Covid pandemic situation has stabilised during the past 18 months, can making, food processing and many other factories have re-opened around the world and Thai food processors’ can requirements have fallen as a result. “In 2022, the Covid situation began to subside and many countries have restarted producing their own cans and canned food. This is causing Thailand’s production volume to decrease,” Rojvoraporn said. “When comparing quarterly figures for 2022 and 2023, the export rate for canned tuna and pineapple products is lower this year, but other canned food products are being exported in similar volumes as last year.
“Also, the El Niño-related drought problem has affected our country’s agriculture sector greatly this year. Of course, this affects processing into canned food and definitely is affecting this year’s canned food export trend.”
While the food can market situation continues to fluctuate, a number of Thai can manufacturers are upgrading their production facilities, including their printing technology, in response to customer requests for higher quality finishes. Other TMPA can manufacturer members are trying out new materials to meet the latest specifications and production standards.
“A few of our members are investing in new lines – both digital printing and conventional 6-colour printers. They want to improve their printing quality for general cans,” Rojvoraporn commented. “Some are testing digital printing for short orders. To give a big volume order some customers want to have short orders made as well. Can manufacturers cannot select just big orders, they must do small jobs as well. Some companies also use digital printing to make samples for proving or to see a printed design.”
According to the association, food cans account for about 70 per cent of Thailand’s total steel can production being filled for export worldwide.
Image: David Hayes
When talking about the introduction of thinner tinplate used to make thinner can walls, Rojvoraporn noted that not all food canners want to convert to thinner, less expensive tinplate due to the technical challenges they may face changing their canning line settings.
“Not all canners can accept thinner tinplate cans as they must change their line settings,” Rojvoraporn explained, “0.14 is the thinnest tinplate used for food cans in Thailand – it’s for fish cans, mostly for tuna and sardines. 0.15 or 0.16 is the average thickness.”
New coatings, on the whole, are introduced to satisfy individual customer requests; “New coatings generally are to follow regulation requirements in customers’ countries. Mostly they are for food cans, there is normally not much change for general cans,” Rojvoraporn remarked.
Thailand’s tinplate and TFS coil imports account for about 50 per cent of the total coil used by the three-piece can industry, compared with about 75 per cent in 2020. Most imports are from suppliers in China and South Korea.
Thailand’s domestic tinplate manufacturers continue to lobby the government to introduce anti- dumping legislation. Following the recent national elections, Thailand’s new government is due to review the current tinplate situation later this year, in November. TMPA, in its role of representing the steel can industry, is also in discussion with the government, having earlier requested the launch of a review to update Thailand’s tinplate industry production standard specification.
“We want the Thai industry standard regarding the percentage of tin on the surface of tinplate to be increased, so that the specification we now use and the Thai government standard are the same,” Rojvoraporn explained. “The government standard uses less tin and is outdated. The new government took office only recently so it will take time to arrange this review.”
Meanwhile, a number of Thai three-piece can makers have diversified and installed new non- tinplate food packaging production equipment at the request of food can customers themselves diversifying to use the new packaging.
“The tin plate can industry is not so good, but not so bad,” Rojvoraporn commented. “We can survive but we have to adapt and look for new ideas. During the past few years, producing some substitute products, especially retort pouches for packaging ready-to-eat food products, have begun to appear as an option. Some TMPA members are now making retort pouches for the same customers they supply with cans.”
Thailand’s two-piece can sector is growing in size this year with the commissioning of Crown TCP’s new beverage can plant on a 26,400m2 site in Nong Khae Industrial Estate in Saraburi Province. Designed to produce 820,000 aluminium cans per year, the plant will supply its entire output to fill with TCP’s famous Red Bull energy drink for export to the Asia-Pacific region.
TCP Group and Crown Holdings Inc have invested THB 1.5 billion opening the new state-of- the-art plant which, according to the joint-venture partners, produces the lightest aluminium can in the energy drink industry, using 0.245mm thick aluminium coil. Commissioning the new plant has increased Thailand’s total aluminium beverage can production capacity to an estimated 10.3 billion two-piece cans annually, according to CanTech’s calculations.
Most aluminium cans made in Thailand are used to fill with beer. However, the number of energy drinks cans being produced continues to rise. Crown Holdings already owns several two-piece can lines in Thailand. These include a single-line beverage can plant located in Nong Khai in northeastern Thailand, on the border with Laos, which opened in July 2020.
Another nearby beverage can plant equipped with two aluminium can lines, is also located in Nong Khai. Crown TCP’s new Saraburi plant is the second can factory in Thailand dedicated to producing energy drinks cans. Competing energy drink company, Carabao has operated a one billion cans per year two-piece can plant in Thailand since 2018 in joint venture with Showa Denko of Japan. Most of the cans are used to fill for export.
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