Key factors driving change in the North and South American specialty-papers market reflect society’s increasing interest in embracing options that are lower cost, more efficient, and more environmentally friendly. As larger, faster paper machines making commodity grades are shut down due to declining markets; papermakers are transferring to producing high-volume, specialty-paper grades, such as release liner and flexible packaging. As an incentive to their customers, they are using innovative technologies to offer lighter, stronger paper, or higher quality finishes.
Concern for the environment and circular economy models has driven a demand for more sustainable materials. The ideal materials are not only bio-based, but are also reusable, recyclable and compostable – and paper scores well in all these categories. This includes moves to switch from multilayer packaging made of paper, plastic and aluminum to paper-based packaging with water-based barrier coatings.
Smithers’ detailed survey profiles historic, current and future demand (2015-2025) for 37 different paper grades in each region and the six leading national markets (US, Canada, Mexico, Brazil, Argentina, and Chile).
The key findings from Smithers investigation are:
- Grades that will see the highest increase are those linked to retail sales of food and other items: laminating base is growing, as multilayer packaging for standup pouches takes market share from glass and metal packs; as are machine-glazed, greaseproof and parchment papers
- C1S packaging also has good growth prospects as food retailers call for packaging that can display high-quality graphics
- C1S labels and release liner grades are showing growth too, as labels become more important not only for pricing information, but also for locally required product information printed in-store, or at warehouses for products shipped online
- Thermal paper is showing growth for printing receipts in-store and from point-of-sale machines that process card payments
- In contrast, grades in decline due to electronic alternatives or outdated technology include photographic paper, cheque paper, ticket paper, and postage stamps
- Cigarette paper demand is declining as rates of cigarette smoking decrease.
The COVID-19 pandemic has inflicted high (and rising) human costs worldwide, and in the major specialty paper markets of the US and Brazil.
The shutdown of many manufacturing and retail businesses, has impacted economic activity severely, with both North and South American economies forecast to shrink in 2020. This will affect specialty-paper sales, but not all segments are being affected equally. Paper grades associated with food packaging will be least directly impacted, but there could still be an effect due to lower spending power caused by job losses during the lockdown.
Other grades of paper related to retail sales will be more affected, such as paper for pricing labels. The segments most affected will be industrial grades of paper, such as electrical papers and automotive filter paper; and ticket paper, due to the widespread cancellation of cultural and sports events.
As it recovers innovation will be necessary for survival in the specialty paper market. Many of the newest ideas are coming from third parties, such as chemical suppliers or research institutions, or from open innovation concepts. Smithers’ research identifies the following technologies as most important to the future of the industry:
- Microcellulose and nanocellulose, either as strengthening additives or coatings
- Green chemistry concepts, to move away from bisphenol-A (BPA) and per- and polyfluoroalkyl substances (PFASs)
- Water-based barrier coatings for food packs, cups and food service containers
- Coatings that give anti-corrosion, anti-microbial, or other value-adding functional properties
- Implementing Industry 4.0 concepts on paper machines to allow more precise control leading to higher quality paper grades.
Smithers’ comprehensive coverage of the specialty paper markets in North and South America combines both qualitative and quantitative analysis for 2015-2025 to enable navigate the disruption of the COVID-19 pandemic and beyond.
More info: The Future of Specialty Papers in North and South America to 2025