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 Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

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

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

Industry Profile Excerpts

Industry Overview

The 2,100 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 117 workers and generates $57-58 million annually.

    • The paper product manufacturing industry consists of about 2,100 companies that employ about 272,500 workers and generate $123 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

                          Recent Developments

                          Apr 28, 2023 - Paper Manufacturers to Phase out “Forever Chemicals”
                          • In March, the Environmental Protection Agency (EPA) proposed its first enforceable moves to regulate six types of perfluoroalkyl and polyfluoroalkyl, a class of chemicals known as PFAS, according to Packaging Dive. Often referred to as “forever chemicals” because they do not break down and remain in the environment, studies have shown that PFAS exposure may be linked to harmful health effects. PFAS chemicals are used in some paper products, including food packaging, and the chemicals may also be released into the environment through paper mill effluent. Food packaging is regulated by the Food and Drug Administration (FDA), and the EPA regulates industrial effluent. In an emailed statement to Packaging Dive, the American Forest & Paper Association said its members phased out long-chain PFAS more than a decade ago and will voluntarily stop using short-chain PFAS by the end of 2023.
                          • Some large retailers are increasing their investments in machinery that makes custom-size boxes for e-commerce shipments, according to The Wall Street Journal. The machines measure the item to be shipped then constructs and seals the box, and adds a shipping label. Walmart has deployed custom box machinery at 12 of its fulfillment centers and has plans to add the machines to other facilities. Amazon began using custom packaging machinery in 2016 and has continued to add more. The speed and performance of custom box machinery has improved in recent years, and firms increased investments in the technology during the pandemic amid labor shortages and the massive increase in online shopping.
                          • According to a recent poll by Morning Consult, 30% of American adults work from home at least twice per week. Telecommuting trends are being watched closely because they are a strong indicator of the long-term value and viability of the commercial office space market. If work-from-home is accepted as a new norm in the long term and office occupancies remain low, it could significantly impact demand for printing and writing papers.
                          • A recent study by the Recycling Partnership showed that governments could increase recycling rates for printed paper and packaging materials by implementing extended producer responsibility (EPR) programs. Through EPR programs, firms that manufacture packaging products are charged fees which are used to help fund local recycling efforts, reducing the financial burden on taxpayers and local governments. The study examined the effects of EPR programs in seven international jurisdictions and six US states. The report showed that EPR policies boosted the collection of targeted recyclable materials to more than 75% in counties including Belgium, the Netherlands, South Korea, and Spain. However, recovery rates in the six US states were only 60%, and study authors suggested this was due to “the lack of sustainable funding.” California, Colorado, Maine, and Oregon have implemented EPR programs, and several other states are considering doing so.
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