First Research US Industry Profile

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Converted Paper Products Manufacturing
SIC Codes: 265 , 267
NAICS Codes: 3222
Last Quarterly Update: 8/26/2019
Companies in this industry make paperboard and corrugated boxes, paper bags, stationery, and sanitary paper products. Major companies include Kimberly-Clark, Packaging Corporation of America, and WestRock (all based in the US), as well as Mondi (UK), Rengo (Japan), Smurfit Kappa Group (Ireland), and Svenska Cellulosa (Sweden).
Leading countries for converted paper products manufacture include China, Japan, Sweden, the UK, and the US. Growth in GDP is a strong indicator of demand for many kinds of converted paper products, including paperboard containers and boxes, paper bags, and sanitary products. Between 2019 and 2023, annual average GDP growth in emerging markets and developing economies is expected to be nearly double that of advanced economies, according to the Conference Board.
The US converted paper products manufacturing industry includes about 3,600 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $105 billion.
Competitive Landscape
Demand is driven by general commercial activity and population growth. The profitability of individual companies depends on efficient operations, as products are sold mainly based on price. Big companies have advantages in distribution and can supply large customers. There are few economies of scale in manufacturing; large and small producers operate the same kinds of plants -- large producers just have more of them. Small companies can compete successfully by making specialty products or serving a small geographical market. The US industry is concentrated: the top 50 companies account for about 60% of industry revenue.
Companies in this industry typically make products from purchased stock. However, over the last few decades the industry has undergone considerable consolidation, and the US market has come to be dominated by large, multi-national companies that are vertically integrated. The operations of these large companies often include ownership and management of timberlands, pulp and paper mill operations (pulp, paper, and paperboard), and production of value-added, end-use products (boxes, stationery, diapers, feminine hygiene products, toilet paper, paper towels, and facial tissue).
Competitive Advantages:
Innovating New Products - E-commerce is driving demand for corrugated packaging, but growth is strongest for innovative, lightweight packaging that protects products while reducing shippers' costs. Online subscription services are driving demand for unique packaging designs that help brands stand out. Retailers increasingly require retail-ready packaging that easily transitions from warehouse to store shelf. Packaging with tech-enabled security features, such as RFID, is another key growth segment amid rising concerns about product counterfeiting, especially in the pharmaceutical industry.
Executing Effective M&A Strategy - Many large converters have grown in recent years through M&A activity. While packaging demand has risen, prices have remained relatively flat. Large converters and paperboard producers hope to offset the weak pricing environment by buying up smaller competitors and shuttering underperforming locations. Companies increasingly select potential acquisitions based on their proximity to the expanding distribution networks of major customers.
Touting Sustainability - Paper converter customers are making aggressive public commitments to increasing packaging sustainability, which creates opportunities for converters to win market share from competing materials. Converters work to promote their products as a renewable, sustainable alternative to other packaging materials, such as plastic. Major companies including Coca-Cola, Walmart, and McDonald's have said all their packaging must be 100% reusable, recyclable, or compostable by 2025.
Companies to Watch:
Kimberly-Clark - One of the world's largest makers of personal paper products, Kimberly-Clark's consumer care products include diapers, feminine care items, and incontinence care products. The company also offers facial and bathroom tissues, paper towels, and other household items. To reduce dependence on US sales, Kimberly-Clark is focusing on further expansion into emerging markets, especially China.
Mondi - A global paper and packaging company, Mondi's offerings include packaging paper and converted packaging products (containerboard and corrugated boxes, as well as kraft paper for industrial and consumer bags, and extrusion coating products for consumer packaging), uncoated fine paper (office and printing paper), and newsprint. Its strategic interests dot Europe, North America, Russia, and South Africa.
Packaging Corporation of America - One of the largest containerboard manufacturers in the US, Packaging Corporation of America (PCA) produces nearly 4 million tons of containerboard a year, most of which is converted into corrugated boxes, and ships about 56 billion square feet of corrugated products. The company sells to a diverse group of industries. Its corrugated packaging includes shipping containers for manufactured goods, retail boxes and displays, and wax-coated boxes and meat boxes for agricultural use.
Svenska Cellulosa - The company is one of the world's largest paper and forestry enterprises. Its forest group churns out paper, pulp, and timber. In Europe it is a leading maker of facial tissue, toilet paper, and personal care products, and it is a global leader in incontinence products. The group owns more than 2.6 million hectares (about 6.4 million acres) of timberland in Sweden. Svenska Cellulosa develops, produces, and markets products in more than 100 countries.
WestRock - One of North America's containerboard giants, WestRock produces packaging for food, hardware, apparel, and other consumer goods. The company's lineup includes recycled and bleached paperboard, containerboard, consumer and corrugated packaging, and point-of-purchase displays. Specialty paperboard is also converted into book cover and laminated paperboard and sold to other manufacturers for such applications as furniture, storage, and automotive components.
Products, Operations & Technology
Major products include paperboard containers (about 60% of US industry revenue), paper bags and coated paper (20%), sanitary paper products (10%), and ... plus:
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