Consumer markets driving sack and kraft paper market to $80 billion by 2021

AREPORT* FROM THE UK’s Smithers Pira, based in Leatherhead, Surrey, says that steady growth in consumer markets will buoy the sack and kraft paper industry to growth of about 3%/y for 2016–2021. This will push global market value to $80 billion in 2021, up from $66 billion in 2016.

The report identifies how expansion is being driven by numerous factors – like the demand for higher quality graphics, which is pressing papermakers to develop suitable and appropriate printing surfaces. This includes the evolution of digital printing technology for the sack and kraft segment which is creating opportunities for converters and challenges for papermakers.

Report author Stephen Harrod notes that environmental concerns are also helping to transform this industry with the adoption of sustainability practices being fairly widespread with many suppliers now sporting “a plethora of environmental certificates in various forms.” He notes it is possible that mills may develop entire product ranges marketed on a sustainability platform.

Also, he says, some kraft paper producers are attempting to increase the amount of recycled material in their products. Pressure to reduce costs is leading to technological advances that now enable much lighter weights of paper to achieve the same results as heavier grades. Grammages are declining significantly, in some cases from 55 to as low as 20g/m2, a shift that increases the importance of sheet uniformity, bulk and thickness, absorbency, opacity, dimensional stability, surface finish, printability – as well as reducing volume off-take for raw material suppliers.

The reduction in volume caused by down-gauging is, however, mitigated by the trend to smaller pack sizes, as smaller packs tend to use more material to hold the same contents. This trend also increases the demand for other consumables – such as inks and adhesives – adding more value to the segment for packaging converters. This evolution is being driven by demographic changes worldwide, where there is a general increase in single parent families and smaller family units. Such downsizing is also being supported by health and safety concerns, with many 50- kg industrial packs being reduced to 25-kg content weights for this reason.

The report is based on a combination of in-depth primary and secondary research. Primary research included telephone interviews for an up-to-date, accurate picture of the market and information on the sack and kraft paper segments not available from published sources. Secondary research was based on analysis of published data and trends collected from leading companies worldwide.

*The Future of Sack and Kraft Paper to 2021, Stephen Harrod, £4,500. Smithers Pira, www.smithers.com

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