Paper Core Market

Introduction

As sustainable packaging acquires precedence, demand for fiber based packaging is experiencing a major uptick. Prominent manufacturers are incorporating sustainable solutions, such as WestRock, which would improve recyclability of food packaging while simultaneously reinforcing the need for responsible forestry.

In 2019, Sonoco Products aligned with 4evergreen, an international industry coalition dedicated to magnifying the importance of fiber-based packaging. The forum was initiated by the Confederation of European Paper Industries (CEPI) across Europe.

Fiber based packaging has proven extremely useful in ensuring prevalence of a circular economy. As of today, WestRock has been recycling 8 million tons of materials annually, in excess of its projected target of 5.5 million tons of recycled fiber consumption. This is expected to broaden prospects for paper cores and the market is expected to grow at a value CAGR of nearly 5% through 2030.

Opportunities Abound in Emerging Economies

Prominent paper core manufacturers are increasingly seeking to leverage expansion opportunities offered by the emerging economies of East & South Asia. Amongst all countries, India and China are expected to remain the primary revenue engines, attributed to flourishing textile and yarn industries.

According to the National Institution for Transforming India (NITI), India is the 2^nd largest textiles and clothing manufacturer in the world. Additionally, it is also the second largest exporter of apparel, contributing a share of 5% in global trade. In FY 2018-19, exports amounted to over US$ 40 billion.

Likewise, China is the largest producer and exporter of clothing, apparel and textiles. In 2017, it exported a total of over US$ 250 billion of clothing and apparel. This is largely a result of a favorable business environment created by the government to encourage domestic production.  

All these trends are immensely widening the scope of growth for paper core manufacturers across these emerging Asian giants for the 2020-2030 assessment period.

Enhanced Functionality to Sustain Demand

Paper based packaging is a highly sustainable solution, with 96% of corrugated packaging across the U.S being recovered and almost most of it being recycled. Furthermore, over 60% of consumers prefer to purchase paper packaged products with the objective of reusing the packaging material.

It is also discovered that 7 out of 10 grocery purchase decisions are made spontaneously, for which paper core based packaging plays a pivotal role. Such packaging solutions are the go-to for manufacturers to enhance visual appeal across supermarket shelves, enabling them to retain customer base.

Large-Scale Deforestation to Put Brakes on Growth

The global paper packaging industry faces multiple obstacles, with the most prominent being environmental sustainability. Forests are the primary sources for paper, with coniferous and deciduous forests being the major paper yielders. Over the years, heightening paper demand has ushered in massive deforestation.

According to a recent UN Intergovernmental Panel on Climate Change report, deforestation is responsible for 30% of global greenhouse gas emissions. Additionally, wood products such as paper are responsible for a tenth of total deforestation. This loss of forest cover has attracted concern among environmentalists and government agencies.

Based on these aforementioned trends, it is expected that paper cores demand is likely to witness a downswing. However, concerted efforts are being initiated to ensure sustainable forestry, which includes silviculture. Over the years, sustainable forest management has yielded massive benefits, especially in the U.S. 

Paper Cores Market- Region-wise Analysis

North America Paper Cores Market

North America is likely to generate over two-fifths of the global paper cores market revenue until 2021. Preference for recycled paper cores is determining existing manufacturers’ new product launch strategies across the continent.

According to the American Forest & Paper Association (AF&PA), approximately 44.2 million tons of paper and paperboard were recycled in 2017 for a recycling rate of nearly 66%. The association is optimistic for this number to cross 70% by 2020-end.

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Based on these promising trends, manufacturers are increasing their foray into the North American market. Yazoo Mills Inc., for instance, is a prominent manufacturer providing a range of paper cores such as the 3” I.D. and 6” I.D. X.250 Stock Cores used across multiple industries, including textiles and films.

Europe Paper Cores Market

The Europe paper cores market is slated to reach US$ 655.3 Mn by 2020-end. Growth is underpinned by several amendments to packaging regulations since the onset of the current decade. An example of such a regulation is the Registration, Evaluation, Authorization and Restriction of Chemicals (REACH).

According to this directive, paperboard packaging is to be used to transport certain substances of very high concerns (SVHC) such as boric oxide and borate flame. Furthermore, such substances are to be transported in limited quantities, failing which regulatory authorities can fully recall the product from the market.

Attributing to this, player such as PAKEA have become highly prominent. The paper packaging giant offers a wide array of production lines for paper tubes and cores, with diameters ranging from 6 to 1.250 mm and a belt speed up to 120 m/min.

East Asia Paper Cores Market

East Asia is expected to generate prolific expansion opportunities for the global paper cores market, registering an annual growth rate exceeding 7% in forthcoming years. A booming packaging industry across emerging economies is the primary reason for the region’s promising growth.

China is expected to be the kingpin of the East Asian market. With an ever burgeoning number of small businesses and start-ups taking off, demand for customized packaging solutions is spawning. As of September 2020, startup investment exceeded RMB 43 billion.

By 2020-end, the Chinese packaging industry is likely to reach US$ 2.5 trillion, as e-commerce rapidly expands in the wake of growing reliance on digital marketing and sales platforms, which is likely to generate credible opportunities for market players to increase their regional presence.

Category-wise Insights

Recycled Paperboard Acquiring Prominence

Recycled paperboard is acquiring immense popularity, reaching US$ 1.4 Bn in revenue until 2019. According to the US EPA, paper and paperboard products comprise the largest proportion of solid waste stream, thus offering immense recycling opportunities.

Manufacturers such as Sonoco Products Company and International Paper have enhanced their presence across key geographies, offering innovative and sustainable paperboard packaging solutions as a part of their commitment to uphold environmental sustainability, thus widening scope of paper cores sales.

High Uptake across Paper & Polyester Industries

By end-use, the paper & polyester industry is witnessing significant paper cores adoption in recent years. Rising adoption of polyester films for insulation purposes across key industries is driving the growth of this segment. By 2020-end, the segment is expected to yield over 40% in revenue.

Demand for paper cores across the textile industry is witnessing substantial increase. The segment is likely to expand at over 5% CAGR through 2030, as numerous technological advancements prompt textile manufacturers to adopt new production and distribution solutions.  

Hygiene & Tissue Paper Cores to Experience Notable Upsurge

By application, winding and rewinding is likely to generate maximum expansion opportunity, yielding nearly two-fifths of the global paper cores market revenue share in the next half-a-decade. Growth is underpinned by increasing demand for textiles across prominent markets.

Interestingly, paper core demand for hygiene & tissue paper manufacturing has registered an incline, likely to witness Y-o-Y growth exceeding 4% throughout 2020. Rising purchases of hygiene products to safeguard against the COVID-19 pandemic is acting as the primary catalyst.

COVID-19’s Impact on the Paper Cores Market

The coronavirus pandemic ushered in a temporary trough across the global packaging industry in Q1 2020, attributed to stringent government imposed shutdowns to prevent contagion. Consequently, demand for paper cores was impacted substantially, as distorted supply chains rendered production largely impossible.

Fortunately, as the months progressed, production levels have been reverting to normal. Rising e-commerce transactions for various consumer and producer goods have largely helped sustain demand for paper core packaging solutions. In addition, flattening of infection curves have made it possible to resume on-site operations, albeit with strict social distancing protocols.

International Paper, for instance, reported net sales exceeding US$ 5 billion, while its earnings amounted to US$ 204 million as of September 2020. These figures are largely an end product of surging at-home consumption which has accelerated the need for robust packaging solutions.

Moreover, demand is also surging due to the rising need for hygiene and tissue papers. As consumers strictly observe basic hygiene practices, households have been stockpiling on disposable tissues, which is likely to catapult adoption of high-grade paper cores. 

Paper Cores Market- Competition Analysis

Future Market Insights’ analysis has incorporated the following key players operating in the paper cores market*:

• Sonoco Products Company
• CPPC Public Co., Ltd.
• Advanced Paper Tube, Inc.
• YAZOO MILLS Inc.
• Eerste Nederlandse Rondkartonnagefabriek B.V. (ENR)
• Smurfit Kappa Group
• Eco Canister, Kunert Group
• ALBERT EGER GmbH & Co. KG
• Hansen Packaging, Callenor Co Inc.
• Ace Paper Tube Corporation
• ImPakt packaging
• Valk Industries, Inc.,
• Western Container Corporation
• Chicago Mailing Tube Co.
• Romiley Board Mill.

*This list is indicative- full list of prominent paper cores market players is available upon request.

The aforementioned players emphasize on expanding their geographical presence along with strategic acquisitions and collaborations to remain afloat. Tier-3 players comprise nearly three-quarters of the global market share, thus rendering it highly fragmented.

In August 2020, Sonoco Products Company successfully acquired Can Packaging based in Habsheim, France, for a sum of nearly US$ 50 million, to develop innovative and patented technology for producing recyclable and high-performance all-paper package.

Capacity expansion is yet another reliable strategy for expanding market presence. In 2018, Yazoo Mills Inc. constructed an additional manufacturing facility in Hanover, Pennsylvania. Measuring 90,000 square feet, the facility has enabled the packaging giant to maintain consistency in quality, service and fast turn-around times.

In April 2020, Smurfit Kappa Group joined forces with KHS to launch its TopClip multipack solution for bundling canned beverages. The collaboration is aimed at providing an end-to-end solution for beverage companies. The packaging is 100% plastic free, allowing for easy removal of cans.

Paper Cores Market- Report Scope

Key questions answered in the report

• How will the global paper cores market expand through 2030?

  According to FMI’s analysis, the global paper cores market is expected to register positive growth, likely to expand at a value CAGR of nearly 5% between 2020 and 2030. Growth is underpinned by increasing demand for sustainable packaging solutions

• Which is the most promising paper cores market?

  East Asia is expected to be the fastest growing market, with China pivoting growth as a result of a flourishing textile and other industries. Favorable investment climate is attracting a plethora of manufacturers, regional and global, to initiate business across the region

• Which is the most preferred paper core type?

  Preference for recycled paperboard is acquiring major traction, with countries emphasizing on implementing the concept of a circular economy and reducing carbon footprint

• How is COVID-19 influencing the said growth projections?

  The COVID-19 pandemic has rendered the paper cores market quite strong, despite severe recessionary impacts experienced by dependent industries in the initial months. Demand is largely being sustained across the instant food and beverage and hygiene products segments respectively

• Which are the prominent paper cores market players?

  Some leading paper cores market players include Sonoco Products Company, CPPC Public Co., Ltd., Advanced Paper Tube, Inc., YAZOO MILLS Inc., Eerste Nederlandse Rondkartonnagefabriek B.V. (ENR), Smurfit Kappa Group, Eco Canister, Kunert Group, ALBERT EGER GmbH & Co. KG, Hansen Packaging, Callenor Co Inc. and Ace Paper Tube Corporation

Enquiry before Buying

• Is the paper cores research conducted by Future Market Insights?

  Yes, the paper cores report has been compiled by expert analysts of Future Market Insights through a combination of primary and secondary research. To know more about how the research was conducted, you can speak to the research analyst.

• What research methodology is followed by FMI?

  FMI follows a methodology that encompasses the demand side assessment of the market, and triangulates the same through a supply side analysis. This methodology is based on use of standard market structure, methods and definitions.

• Who are the respondents for primary research?

  FMI speaks to stakeholders across the spectrum, including C-level executives, distributors, product manufacturers, industry experts. For a full list of primary respondents, please reach out to us.

• What are the sources of secondary research?

  FMI conducts extensive secondary research through proprietary databases, paid databases, and information available in the public domain. We refer to industry associations, company press releases, annual reports, investor presentations, and research papers. More information about desk research is available upon request. 

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PAPER CORE MARKET TAXONOMY

Material Type

• Kraft Board
• Virgin
• Recycled
• Paperboard
• Virgin
• Recycled

Diameter Type

• 23 mm-76 mm
• 77 mm-152 mm
• 153 mm-229 mm
• 230 mm & above

Application

• Paper & Polyester
• Winding & Rewinding
• Decoration & Specialty Paper
• Hygiene & Tissue Paper
• Printing & Coating

End-Use

• Paper & Polyester
• Electronic
• Textile
• Constructing
• Beverage Packaging

Region

• North America (U.S & Canada)
• Latin America (Brazil, Mexico, Argentina & Rest of Latin America)
• Europe (Germany, Italy, France, U.K., Spain, BENELUX, Nordics, Russia, Poland & Rest of Europe)
• South Asia (India, Thailand, Indonesia, Malaysia & Rest of South Asia)
• East Asia (China, Japan & South Korea)
• Oceania (Australia & New Zealand)
• Middle East & Africa (GCC, Turkey, Northern Africa, South Africa & Rest of MEA)