Coated and Laminated Paper, NEC

SIC 2672

Companies in this industry

Industry report:

This industry covers establishments primarily engaged in manufacturing coated, laminated, or processed paper and film from purchased paper, except for packaging. Also included are establishments primarily manufacturing gummed paper products and pressure sensitive tape with backing of any material other than rubber, for any application. Establishments primarily engaged in manufacturing coated and laminated paper for packaging are classified in SIC 2671: Packaging Paper and Plastics Film, Coated and Laminated; those manufacturing carbon paper are classified in SIC 3955: Carbon Paper and Inked Ribbons; and those manufacturing photographic and blueprint paper are classified in SIC 3861: Photographic Equipment and Supplies.

Industry Snapshot

This classification incorporates a wide variety of products and companies. As a whole, the industry shipped goods valued at $12.62 billion in 2008. This industry grew rapidly from the late 1970s to the late 1990s as more specialty applications for its products were developed. For example, in the late 1990s, the U.S. Postal Service rapidly expanded its use of self-stick postage stamps, representing an enormous market for this industry. However, by the late 2000s, the pressure sensitive market had matured, and the industry was being negatively affected by a recession that was driving down demand.

Organization and Structure

Most companies in this industry limited their activities to the coating of paper or other materials, but produced diverse products from this process. Of the many products in the industry, the vast majority of shipments came from one of two sectors: pressure-sensitive products and "other" coated and laminated paper not produced at paper mills. The pressure-sensitive products group included cellophane tape, almost all labels, and a variety of other pressure-sensitive adhesives (PSAs), but did not include gummed tape. Other coated and laminated paper products included paper that was treated or coated to enhance the paper's utility. PSAs were by far the largest product class produced by this industry, accounting for $6.28 billion, or about 50 percent, of all shipments in 2008, according to the U.S. Census Bureau. The next largest category was printing paper coated at establishments other than where paper was produced, which held 12.3 percent of all shipments in 2008, followed by gummed paper products (3.3 percent), wall coverings, (3.2 percent), and gift wrap (1.9 percent). All other products accounted for roughly 29 percent of the total.

Pressure-Sensitive Products
Even within this subsegment of the industry, there was a great deal of diversity. Pressure-sensitive products ranged from cellophane tape to shrinkable labels to sealing tapes. Advances in adhesive technology and continuing development work by manufacturers of PSAs led to increases in applicability and quality. Lighter weight products offering greater flexibility and lower cost than traditional materials allowed some types of adhesives to be used in place of rivets, bolts, and chemical compounds in assembly processes. Even heavy industrial processes such as engine manufacturing and truck frame assembly found applications for PSAs.

To produce PSAs, manufacturers use paper, plastic films, non-woven cloth, or polyethylene as a base. A chemical solvent or waterborne acrylic, which provides the adhesive necessary for the PSA to stick, is applied to the base, usually to one side. PSAs can be measured using three criteria: tack, the PSA's bonding quality with a given surface; peel, difficulty of removing the tape from the surface; and shear resistance, PSA's response to "creep" over time. The type of adhesive that coats the film depends on the PSA's desired application. Labels can be made of paper, polystyrene, film, or other materials, but the defining feature of a label is its mode of application.

Competing Technologies.
Pressure-sensitive labels faced competition from several technologies, the two most common being wet glue and shrink sleeve. Wet glue applications affix a paper or plastic label using a pre-applied adhesive. Beverages and foods in glass containers often use wet glue labels. Glue-applied labels were the leading labeling method, holding an estimated 50 percent share of the total label market compared to about 40 percent for PSAs. All other technologies had about 10 percent of the market.

Shrink sleeve applications, in which the label is wrapped around the product and shrunk directly onto it to form a bond, were most common on batteries and film products. Other competing technologies included heat transfer, heat seal, and in-mold labels. Gummed labels, with about 25 percent of the label market in the 1960s, dropped to about three percent in the late 2000s and were not a significant competitor. Most of the erosion in the gummed label market has been linked to increased use of pressure-sensitive labels.

Other Coated and Laminated Papers.
The products produced through the coating and laminating process ranged from specialty papers to wax paper, carbonless paper, and thermographic business papers. For this category, the U.S. Census Bureau includes only paper produced at establishments other than base paper producers. As a result, this category does not include the vast majority of coated paper produced in the United States, which is produced on site at paper mills (see SIC 2621). Most coated paper manufacturers have off- or on-paper machine coaters that can be set to coat the paper (or be left off to produce uncoated paper) as it leaves the production line. Paper produced in this fashion (coated on site) is classified under SIC 2621. The coated and laminated paper that is included in SIC 2672 is produced by companies that purchase "base stock" paper from paper mills and coat or laminate it. In fact, three-fourths of the "other coated and laminated papers" category in SIC 2672 is accounted for by carbonless paper coated at establishments other than where the paper was produced.
The value of coated printing paper included in SIC 2672 (paper coated at establishments other than where the paper was produced) is smaller than the value of the entire coated printing paper market, which is included in SIC 2611. For example, U.S. shipments of paper coated at establishments other than where the paper was produced had a 2008 value of $1.53 million, compared to the value of coated printing paper produced at U.S. paper mills, which amounted to more than $5 billion.
Some of the factors involved in coating papers included the printing process (offset, rotogravure, non-impact, etc.), the type of ink used (colored, black and white, thickness), and environmental considerations. Coating must take into account the uniformity of the coating application, the evenness of the coat weight, and the smoothness and uniformity of the coat. There are five grades of coated paper, the first one being the heaviest and generally the highest quality.

Paper is coated with pigments, which can consist of either chemical solutions or clay compounds. Titanium dioxide has long been a favorite coating material because of its opacity, though substitutions are usually sought since titanium dioxide is fairly costly. Other popular coatings include calcium carbonate and kaolin (clay), a naturally occurring mineral.

Within the coated and laminated paper sector, converters may apply any number of coatings to change the function or quality of paper, such as gummed resins to make flypaper or gummed adhesive tape, or cloth or fluids to produce cloth-lined or porous impregnated papers. The carbonless paper segment of this industry grew through the 1990s and early years of the first decade of the 2000s. This type of paper is manufactured by weaving small beads of ink into the paper fiber itself. When pressure is applied, the beads are broken and ink darkens the paper to emulate the pen strokes of the writer. However, environmental issues caused some concerns in the latter 2000s, leading manufacturers to look for and develop organic-based solvents in the carbons. In all, this segment contracted during the late 2000s, but new interest from the digital and laser markets slowed the market's decline.

Background and Development

Technological advances in coatings, paper manufacturing processes, and adhesives have long been the driving force behind developments in the coated and laminated paper industry. One clear event that prodded the growth of the label industry was the development of the self-adhesive label by Stanton Avery in 1935. From this initial product line came a whole range of self-adhesive (now called pressure-sensitive) products, including thermal films, airline bag tags, computer imprintable films, and thermal transfer self-adhesives. A wide range of industries in the early years of the first decade of the 2000s made extensive use of pressure-sensitive labels, including airlines, automotive, consumer durables, food and beverages, health and beauty aids, chemicals, pharmaceuticals, retailing, and transportation.

In 2001, the value of shipments for the laminated and coated paper industry declined to $10.61 billion, down from nearly $11.19 billion in 1997, but still higher than the $8.87 billion worth of goods shipped in 1994. Industry establishments employed approximately 38,824 workers in 2001, down from 41,541 workers in 1997. The industry's 26,867 production workers earned an average hourly wage of $16.28.

The coated and laminated paper industry is generally characterized by small firms that have sought to stake out dominant shares in niche markets. However, one industry giant (3M Corporation) and several other relatively large companies (Appleton Papers, Nashua Corporation, and Wausau-Mosinee Paper Corporation) hold commanding positions in this industry segment.

Coated Paper Markets.
Along with much of the rest of the paper industry, the coated market experienced slow growth through the downward business cycle of the early years of the first decade of the 2000s. This trend was exacerbated by the fact that publishers, who had been faced with enormous price hikes in 1994 and 1995 (as much as 75 percent in a 12-month period), cut back on the number of magazine or catalog pages they printed or dramatically trimmed circulation in order to conserve paper. Many publishers had turned to online publications as a means of circumventing these price increases. As a result, by early in the decade, the value of coated paper shipments was on the decline.

One problem facing producers of coated papers in the early 1990s, demands for more recycling, has eased for two reasons: in the late 1990s and early in the first decade of the 2000s, manufacturers began producing more coated papers made at least partially from recycled paper, and magazines and catalogs printed on coated paper were being recycled in greater volumes. While paper recyclers once shunned coated paper because of the coating materials used, recycling operations have learned how to process this type of paper. Still, coatings and fillers typically account for a large part of the paper. When the paper is recycled, these materials have to be separated, removed from the process, and sent to landfills. Some coated papers can consist of as much as 50 percent coating and filler, which greatly reduces the amount of recoverable paper fiber. As a result, most recycling operations tend to mix small amounts of coated paper with much larger volumes of uncoated paper.

Growth in Pressure-Sensitive Products.
Applications for pressure-sensitive products have been driven by the bewildering array of technology options available to manufacturers and new products targeted toward the consumer sector. Removable adhesives--such as those found in Post-It notes--have driven growth, as have new applications of traditional products. For example, the U.S. Postal Service has converted most of its stamp products to PSAs. The value of pressure-sensitive product shipments increased from $6.99 billion in 1998 to $7.17 billion in 1999 and to $7.22 billion in 2000. Due in large part to the softening of the U.S. economy, particularly in technology sectors, the value of these shipments declined to $6.83 billion in 2001.

Label markets grew faster than the U.S. gross domestic product (GDP) in the late 1990s and early years of the first decade of the 2000s. Some of the factors contributing to the growth of this sector include increased use of bar codes at end point-of-sale processors (such as supermarket deli counters); legislation requiring food manufacturers to disclose an increased amount of information on food labels; and advances in application and material technologies, which have allowed manufacturers to increase the use of labels.

In terms of the "face stock" used to produce pressure-sensitive labels, the fastest growing segment is sheeted laser paper, reflecting the increase of in-house printing of information by label users. Laser paper accounts for more than 15 percent of the face stock used by pressure-sensitive label manufacturers. Despite the growth of laser paper usage, general paper remains the largest single face material used, accounting for about 50 percent of the market. General paper is said to be growing more slowly than the market as a whole, reflecting displacement by film face stock in some applications. Film prices are declining and approaching high-end paper grade prices. Film accounts for roughly 25 percent of the market.

While the use of pressure-sensitive labels is growing, they face more competition from other technologies. For example, the use of shrink sleeve and in-mold labels greatly increased in the late 1990s. Shrink sleeve labels, which dominated much of the plastic beverage bottle market, grew seven percent annually in the late 1990s and early years of the first decade of the 2000s. In-mold labels, used on blow-molded plastic containers, had a high penetration rate in the health and beauty products and household chemicals markets and had an annual growth rate of 10 percent in the late 1990s and early years of the twenty-first century's first decade.

According to Dun and Bradstreet, 793 establishments were engaged in manufacturing coated, laminated, or processed paper and film from purchased paper, except for packaging, in 2007. Industry sales totaled close to $12.7 billion with industry-wide employment of 37,100 workers. States with the majority of concentration in descending order were California, Ohio, New York, Illinois, and Pennsylvania. Collectively, these states accounted for roughly 35 percent in market share.

In 2007, glue-applied labels were clearly the market leader with 43 percent of the market, followed by shrink sleeve labels and in-mold labels representing 8.6 percent and two percent respectively. Although domestic demand for pressure-sensitive labels has waned from the levels of the 1990s, industry watchers forecast moderate growth at a compounded annual growth rate of 1.2 percent between 2007 and 2012.

Issues surrounding the coated and laminated paper industry include cost pressures as well as environmental concerns. For instance, industry leader Appleton Papers, Incorporated, reported a $51.3 million loss through the first three quarters of 2008, compared to a $5.5 million gain during the same period in 2006, citing higher costs for raw materials, energy, and transportation. On the environmental front, waste management paper product manufacturers may be negatively impacted if companies are forced to pay for packaging disposal because products may be redesigned to require less packaging material.

Current Conditions

Like many specialty paper markets, the carbonless paper sector was struggling at the beginning of the 2010s. Dealing with environmental issues and higher prices for wood pulp, the industry was also suffering from declining demand as more and more people turned to electronic correspondence and record keeping. Although carbonless paper was well past its glory days of the 1970s, manufacturers were working to make copies less flimsy and more durable. Precollated sets were a popular, cost-effective method to make exact copies.

The industry also faced an uncommonly difficult economic environment during the last years of the 2000s as the United States sank into an economic recession in 2008. The industry's largest players, such as 3M, weathered the rocky times by cutting costs and contracting its operations to focus on its core businesses. Nonetheless, after increasing net sales each year between 2005 and 2008, 3M's revenues dropped by 8.5 percent to $23.1 billion in 2009. As is common in difficult economic periods, the industry contracted as some smaller companies were incorporated into larger companies. For example, in 2009, 3M purchased Compac Corp.'s pressure sensitive adhesive tape business. Compac Corp., of Hackettstown, New Jersey, provided services in coating, laminating and converting flexible substrates.

In general, the industry continued to trend toward pressure sensitive products. According to a 2009 study by the Freedonia Group, world demand for labels was expected to increase by 4.3 percent annually through 2013, totaling 49 billion square meters. Market value should grow annual at 5.3 percent to reach $105 billion. The pressure sensitive segment is expected to grow at a faster than average pace and account for roughly 55 percent of the total label market. According to the report, wet glue labels were set to experience continued declines. Other segments that were expected to grow included plastic-based labeling including shrink sleeves, wrap-around film and in-mold labels. Although the beverage label market is relatively mature, the strongest growth was expected in pharmaceutical labels.

Industry Leaders

The fragmented and specialized nature of the coated and laminated paper industry makes true dominance across all sectors a virtual impossibility. Certain firms, however, have managed to carve out strongly defensible niches and have consistently maintained innovation and expertise to keep a strong position in their particular sector. Appleton Papers, Incorporated, a division of the United Kingdom-based firm Arjo Wiggins Appleton (AWA), was a market leader in carbonless and thermographic papers. Sales in 2009 totaled $964.6 million and the firm employed 2,210 workers. Among the notables in the pressure-sensitive products area was the Minnesota Mining & Manufacturing Company (3M), which posted 2009 sales of $23.1 billion and employed 74,835 workers. Of that total, consumer and office business segment accounted for $3.47 billion, although 3M's pressure sensitive products are spread across other business segments also. 3M pioneered cellophane tape and manufactures some of the best known brand names in the industry with its Scotch tape and Post-It notes. 3M manufactures only part of its products within this industry but still has a sizeable representation within the industry leaders.

America and the World

A high value-to-weight ratio along with the unique nature of many of the products within the industry have contributed to a globalization of the industry. Since technologies are often proprietary, few barriers existed to stop products from migrating from one market to another. A list of the world's leading thermal coaters, for example, would list few U.S. firms. Another factor hindering U.S. growth in this sector is the fact that many of the advances in coating equipment technology have come from overseas. This has meant a delay in the diffusion of technology to the United States and a subsequent lag in U.S. competitiveness in certain sectors.

© COPYRIGHT 2018 The Gale Group, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. For permission to reuse this article, contact the Copyright Clearance Center.

News and information about Coated and Laminated Paper, NEC

Research and Markets Adds Report: 'All Other Converted Paper Product Manufacturing Industry in the U.S. and its International Trade [2010 Edition]'
Manufacturing Close-Up; August 12, 2010; 700+ words
...Other Converted Paper Product Manufacturing...engaged in converting paper or paperboard into...containers, bags, coated and treated paper...pasted, lined, laminated, or surface coated paperboard and die...Paperboard Products, NEC ( except corrugated...
Research and Markets Adds Report: All Other Converted Paper Product Manufacturing Industry in the U.S. and its International Trade - The Updated 2010 Year-End Edition.
Entertainment Close-up; January 18, 2011; 700+ words
...Other Converted Paper Product Manufacturing...engaged in converting paper or paperboard into...containers, bags, coated and treated paper...pasted, lined, laminated, or surface coated paperboard and die...Paperboard Products, NEC ( except corrugated...
Research and Markets Adds Report: All Other Converted Paper Product Manufacturing Industry in the U.S. and its International Trade.(Report)
Health & Beauty Close-Up; December 16, 2009; 700+ words
...Other Converted Paper Product Manufacturing...engaged in converting paper or paperboard into...containers, bags, coated and treated paper...pasted, lined, laminated, or surface coated paperboard and die...Paperboard Products, NEC ( except corrugated...
Table 5. Producer price indexes for the net output of selected industries and their products, not seasonally adjusted.(Part 2)(Statistical table)
PPI Detailed Report; September 1, 2007; 700+ words
...packaging uses 322221-1 Multiweb laminated rolls and sheets, except...Secondary products 322221-S Coated laminated paper manufacturing 322222 Primary...products 322222-P All other coated and processed papers 322222-B Printing paper...
PPI Detailed Report: Data for April 2016
PPI Detailed Report; April 1, 2016; 700+ words
...code code base Multiweb laminated rolls 322220-13 12...flexible packaging uses Coated and 322220-2 12/03 laminated paper Printing paper, coated at 322220-21 12...establishments other than where paper was produced Pressure...322220-29 12/11 papers, except for packaging...
Table 6. Producer price indexes and percent changes for commodity groupings and individual items, not seasonally adjusted.(Part 2)(Statistical table)
PPI Detailed Report; April 1, 2009; 700+ words
...single and multi-web paper 0913-0321 Coated and laminated single and multi-web film 0913-0322 Coated and laminated paper, n.e.c. 0913-05 All other coated and processed papers 0913-0502 Paperboard 0914 Corrugated paperboard in...
Monthly sector analysis.
Acquisitions Monthly; March 1, 2005; 700+ words
Table 15. Commodity price indexes based on the movement of corresponding industry-based product price indexes, effective January 2007.
PPI Detailed Report; January 1, 2007; 700+ words
...Fabricated textile products, nec. 3132303132303 3149993149998...3211133211135 09130118 Clay coated printing and converting 3221213221211 paper 3222223222221 09130321 Coated and laminated single and 3222213222211...3222213222213 09130322 Coated and laminated

Search all articles about Coated and Laminated Paper, NEC