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Chart one illustrates the long-term growth of unit volume in the recycled
boxboard market compared to gross domestic product (GDP) and Caraustar’s
performance. Over the last twenty-five years our industry has grown
at a compound annual growth rate of 2.1 percent compared to a 3.4
percent growth rate in the general economy. Caraustar, on the other
hand, has grown at a rate over three times the industry, averaging
7.1 percent. Approximately 70 percent of Caraustar’s growth has
come from acquisitions. More recently, the growth rate of the recycled
boxboard industry has flattened and departed from its historical relationship
to GDP. Over the last five years the recycled boxboard market grew
at 1.1 percent and over the last three years grew at 0.8 percent.
Compared to 1999, the industry’s unit volume declined by 0.9
percent while Caraustar’s unit volume declined by 4.0 percent.
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 Chart
two depicts the growth of unit volume in the tube, core and composite
container market. This market has historically been the most stable
market in which the company participates. Industrial production accounts
for approximately 75 percent of demand in the tube, core and composite
container market, while construction spending accounts for an estimated
17 percent and consumer non-durable consumption accounts for eight
percent. Over the last twenty-five years the compound annual growth
rate has averaged 3.0 percent. Over the last five years the compound
annual growth rate declined to 1.7 percent, and in the year 2000 unit
volume increased by 7.0 percent compared to 1999. A slowdown in the
general economy, weak industrial production and a decline in construction
spending have contributed to the recent weakness in this market. |
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