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 3,200 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.

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.

Competition from Imports

Imports of converted paper products have grown at a healthy rate over the last decade.

Industry size & Structure

A typical paper product manufacturer employs 84 workers and generates $38-39 million annually.

    • The paper product manufacturing industry consists of about 3,200 companies that employ about 269,000 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, Smurfit Westrock (formerly Smurfit Kappa and WestRock), and Amcor (Bemis Company).
                          Industry Forecast
                          Paper Products Manufacturers Industry Growth
                          Source: Vertical IQ and Inforum

                          Recent Developments

                          Jun 5, 2024 - Slower Industry Growth
                          • The paper product manufacturing industry is expected to experience weaker sales growth in 2024 after a slight improvement in demand in 2023. The industry’s year-over-year sales growth declined 2.3% in 2022, according to Inforum and the Interindustry Economic Research Fund, Inc. Sales growth rose 2.6% in 2023 and is projected to moderate to 0.8% in 2024 and 1.7% in 2025 then see steady average annual growth of about 1.7% through 2028, according to Inforum and the Interindustry Economic Research Fund, Inc.
                          • Even with the pandemic in the rearview, ecommerce spending has remained robust, and much of that online shopping is being fueled by hybrid workers who make purchases during the workweek, according to The Wall Street Journal. According to a report by researchers at Stanford University, Northwestern University, and the Mastercard Economics Institute, in 2023, consumers spent $375 billion more on online shopping than they would have if the pandemic had never happened. The study’s authors suggest much of that increase is due to people who still work hybrid or fully remote schedules. Sustained ecommerce demand is a significant business opportunity for manufacturers of paper packaging.
                          • Consumer packaged goods firms are making progress in developing a paper-based bottle, according to The Wall Street Journal. Packaged goods firms, including Procter & Gamble, Coca-Cola, Diageo, and PepsiCo, hope to develop a shelf-stable paper bottle that can tempt consumers concerned about plastic pollution and the carbon emissions of glass. However, making a purely paper bottle that keeps drinks fizzy and doesn’t get soggy or leak has proven challenging. Paper bottles currently on the market have a plastic liner, which can make them hard to recycle. Danish packaging firm Paboco is working on a paper bottle with a plastic liner that’s less than 5% of the package’s weight, which the company says is thin enough not to interfere with the recycling process.
                          • In early March, British paper and packaging firm Mondi reached an in-principle deal to acquire fellow UK paper producer DS Smith in an all-share deal that valued DS Smith at 5.14 billion British pounds, according to Reuters. About three weeks later, US-based International Paper (IP) made a counter all-stock takeover offer for DS Smith, which valued the UK firm at 5.8 billion pounds. The IP offer would give DS Smith shareholders a 33.8% stake in the combined company. In mid-April, DS Smith accepted IP’s offer, marking a continued consolidation in the global paper and packaging industry. In September, US packaging firm Westrock agreed to be acquired by Ireland-based Smurfit Kappa, which would create a new firm, Smurfit Westrock. The new company will be headquartered in Ireland and have estimated revenue of $34 billion. The Westrock- Smurfit Kappa deal is expected to close in early July 2024, according to Packaging Dive.
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