Paper Products Manufacturers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 2,200 companies in the US manufacture paper products by cutting, shaping, coating, or laminating paper and other materials. End products are often referred to as converted paper goods. Product categories include paperboard containers, paper bags, coated and treated paper, stationery products, and sanitary products.

Competition From Imports

With the exception of a brief dip during the last recession, imports of converted paper products have grown at a healthy rate over the last decade.

Variability In Raw Materials’ Costs

The paper industry is cyclical and cost of wood pulp (primary material in paper manufacturing) can fluctuate depending on global supply and demand.

Industry size & Structure

A typical paper product manufacturer employs 116 workers, and generates about $50 million annually.

    • The paper product manufacturing industry consists of about 2,200 companies that employ about 264,000 workers and generate $114 billion annually.
    • The 50 largest firms account for 62% of industry revenue.
    • Some large companies are vertically integrated and own paper mills.
    • Large companies include Kimberly-Clark, WestRock (formerly RockTenn and MeadWestvaco), and Amcor (Bemis Company).
                          Industry Forecast
                          Paper Products Manufacturers Industry Growth
                          Source: Vertical IQ and Inforum

                          Coronavirus Update

                          Apr 19, 2022 - Russia’s Invasion of Ukraine Disrupts Paper Trade Flows
                          • Russia’s invasion of Ukraine is disrupting global wood product trade flows, especially in Europe. According to Wood Resources International, Russia, Belarus, and Ukraine exported 34 million tons of lumber in 2021, and 25% of that volume was exported to countries that have sanctioned Russia and Belarus. Europe’s timber imports from Russia and Belarus accounted for nearly 10% of the continent’s consumption in 2021. Wood certification organizations Forest Stewardship Council (FSC) and Programme for the Endorsement of Forest Certification (PEFC) have designated all timber from Russia and Belarus “conflict timber,” which cannot be used to manufacture certified products, including pulp and paper. Even after peace returns to Europe, timber trade flows have likely been permanently altered.
                          • Seasonally adjusted manufacturer shipments of paper products rose 0.9% in February compared to January. Shipments by pulp, paper, and paperboard mills increased 0.8%, and paperboard container shipments rose 1.4%. On an unadjusted basis, paper product shipments grew 6.2% in the first two months of 2022 compared to the same period in 2021.
                          • Industry giant Kimberly-Clark's adjusted earnings in 2021 were $6.18 per share, down 20% from the $7.74 it earned in 2020. Earnings in 2020 were boosted by windfall profits of selling huge amounts of paper products to stockpiling consumers, so the drop-off in 2021 was not unexpected, but industry experts note that a big part of the issue was rising costs, given that sales were up slightly overall. Company officials cite pandemic-related issues including rising input and shipping costs as key causes. The higher input costs are likely tied to commodity prices for the wood products that go into the company's paper goods.
                          • Health experts have determined that the risk of coming in contact with the coronavirus by handing grocery items like packages of fruits and vegetables is minimal. Information on the Centers for Disease Control and Prevention website says that “because of the poor survivability of these coronaviruses on surfaces, there is likely a very low risk of spread from food products or packaging.” The site also notes that no cases of COVID-19 have been linked to people touching food or food packaging and then touching their faces. There is now wide agreement among health experts that the coronavirus is spread primarily through droplets in the air, according to USA Today.
                          • Early in the pandemic, some paper products manufacturers lost access to some or all of the recycled pulp and paper used as inputs. A key cause of the declining availability of recycled pulp and paper was the business closures during the lockdown. Businesses are the source of most recyclable paper. The material is typically higher quality than what is gotten from residential recycling and is less expensive to collect. Higher demand for corrugated containers used in e-commerce combined with reduced paper recycling efficiency drove up prices for old corrugated containers (OCC) used to make recycled fiber-based containerboard.
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