Trends in the Paper Packaging Market 2017 – 2027
Paper packaging: Market Dynamics
Paperboard is estimated to be the fastest growing product segment with estimated growth rate of 7.5% among all other product segments of paper packaging. APAC region leads the paper packaging market (estimated revenue share of 35%). Europe region follows APAC, North America follows Europe. The demand in APAC is driven by India & China. The carton board market is dominated by European paper packaging manufacturers because of lack of facility and capacity in APAC region. Flexible plastics packaging is posing a tough competition to paper packaging. Rising oil prices work in favor of paper packaging market, but in recent times the oil prices are so volatile and declining due to over production and over supply. The rise in the number of hypermarkets and supermarkets is influencing the growth of the paper packaging market. A rapidly growing organized retail sector is leading to rise in demand of food & beverages and other. Paper packaging not only helps retail stores to pack the food but also to protect and maintain nutritional values.
Global paper packaging market is consolidating to gain new capacities, expertise and new markets. Major M&A deals happened in 2016. Clearwater Paper Corporation has acquired Manchester Industries of Richmond, Virginia, from PaperWorks Industries, an integrated full-service packaging provider for a purchase price of $68.25 million. Mondi Group has acquired 100% of the outstanding share capital of LLC Beepack from a private investor for a consideration of RUB 2,825 million (EUR41 million) on a debt-and-cash-free basis. Packaging Corporation of America acquired Columbus Container, Inc., an independent corrugated products producer in a cash-free, debt-free transaction of $100 million.
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Growing public private deals in forest leasing or opening the management of forest land management to private players helps paper and paperboard packaging market players to secure the supply of raw materials (timber). Recently Indian government opened up the management of almost 40% forest land by private players.
Paper packaging: Market Segmentation
Different grades of paper used in paper packaging market are Solid bleached sulfate, coated recycled board, MET-PET Board, uncoated recycled board, Clay Natural Kraft, Coated Unbleached Kraft Paperboard, FBB, WLC, Glassine & Greaseproof, and Label Paper. On the basis of application paper packaging market is segmented into food & beverages, pharmaceuticals, personal care, cosmetics, homecare, and others. The paper packaging market has been segmented by product as container or corrugated or shipping box, kraft paper or paperboard or cardboard, folding carton and others.
As we said earlier, paperboard dominates the paper packaging market. Application wise food & beverages creates highest demand among others. SBS is extensively used in North America and European region. Uncoated recycled board and coated recycled board are produced from 100% recycled paper and containers including newspapers, old containers etc. Paper industry is an energy intensive industry. So growing crude oil prices is the major concern. However R&D, Innovation and explorations are happening to optimize energy consumption and producing 100% recyclable paper.
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Paper packaging Market: Regional outlook
Paper packaging market has been segmented on the basis of region into North America, Latin America, Eastern Europe, Western Europe, Asia Pacific Excluding Japan (APEJ), Middle East & Africa (MEA), and Japan.
United States has the highest density of usage (More than 50 times). It shows there is high penetration ability. Countries like Russia, China and Brazil have excess supply, so they are exporting to other nations. APEJ and Japan collectively dominate the paper packaging market. Above 25% population in Africa region are below 25 and by 2100 it is expected to reach 50 %. Changing lifestyle, growing consumer consumption power in MEA driving the demand for paper packaging. Paper packaging costs low compared to other packaging. So it is best suitable for the price sensitive markets, where GDP and purchasing power is low. Manufacturers of paper packaging can tap these untapped markets by innovating and exploring low cost paper packaging solutions for low GDP under developed and undeveloped markets.
Per capita paper consumption in US is estimated to be around 300Kg and in China it is around 150 Kg. In India per capita paper consumption is around 6 to 8 Kg and in Africa (all 20 nations) it is 3-4Kg. Due to stagnation in population growth and rise in migration in United States, UK, Canada and Russia demand for paper packaging is declining. Growing population in India and China driving demand for paper packaging. China paper packaging growth rate stands at 7 to 8% and India at 3-4%.
Paper packaging Market: Key players
Some of the players in the global paper packaging packaging market are Amcor Ltd., International Paper Company, Kapstone, Evergreen Packaging Inc., West Rock Packaging Company, Packaging Corporation of America, Sappi Limited, DS Smith, Mondi Group, Oji Paper Company, Smurfit Kappa, Metsäliitto Cooperative, Tetra Laval Group, Georgia-Pacific, Sonoco Products Company, Caraustar Industries Inc., Clearwater Company, Rengo, MeadWestvaco Corporation, Graphic Packaging International Corporation, Sappi Limited, DS Smith, Austrlian Paper, Visy, GH Packaging, KR Papers, GS Paper and Packaging group, Malex Paper products, Junopack, Napco, Middle East paper company, AlMasah, Transpaco.
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