Rising timber and energy costs are squeezing margins across Australia’s paperboard container industry, widening the gap between large, vertically integrated groups and smaller regional producers, according to IBISWorld’s latest market update. The report claims that revenue stands at $452 million per year and has declined by about 1.4% every year since COVID-19 (2020), a contraction driven by elevated input prices and softer downstream demand.
IBISWorld counts 70 businesses nationally and identifies Opal, the Detmold Group and Graphic Packaging International Australia as the market’s dominant players, firms that have used scale and backward integration to blunt recent input‑price shocks. Smaller manufacturers, by contrast, are contending with what the report calls “higher input costs from a double markup on timber,” a dynamic that has materially eroded profitability for many SMEs and left a long tail of vulnerable operators facing margin compression or exit.
Location is increasingly decisive, with Victoria emerging as the national centre for paperboard container manufacture. Strong state recycling policies, reliable access to recycled feedstock, and sustained demand from dense food-processing clusters have made the state the most attractive destination for capacity and investment, reinforcing local supply chains for converters and brand owners.
And despite the recent downturn, IBISWorld expects the industry to return to growth over the next five years as food, beverage, retail and e‑commerce demand recovers and as suppliers respond through consolidation, vertical moves and product differentiation. The near‑term contest will be decided by which firms can secure cheaper, reliable feedstock and translate scale into lower unit costs.
For investors, consolidation and vertical integration will be the trends to watch; for smaller makers the options are stark — specialise and capture niche margins, or pursue partnerships and scale to blunt the input‑price squeeze, otherwise margin pressure is likely to force further exits or sales to larger groups.
