LOS ANGELES (Scrap Monster): The Coated and Laminated Paper Manufacturing industry experienced a moderate decline over the five years to 2011, with revenue decreasing at an average of 2.5% per year.
According to IBIS World industry analyst Caitlin Moldvay "during the recession, weak output in downstream industries, such as cement manufacturing, label making, printing and publishing, hampered demand for coated paper and flexible packaging. One customer market that remained relatively unchanged over the five-year period, however, was the food and beverage industry, to which paper manufacturers sell a significant portion of their products."
Operating conditions were particularly poor in 2008 and 2009. Revenue drops in those years were mainly caused by decreased demand for advertising and poor operating conditions in cement manufacturing.
The depreciated US dollar aided industry exports, however, and has led to growth opportunities for some operators. As a result, exports increased from 17.7% of industry revenue in 2006 to an estimated 23.1% in 2011, representing an average annual rise of 2.9%. Also, renewed business and consumer spending in 2010 and 2011 led to rising demand for packaging, print-based advertising and specialized paper products.
The US dollar is forecast to continue depreciating, at an annual rate of 0.2%, making imports relatively more expensive and exports cheaper. Furthermore, Moldvay adds, "environmental concerns are expected to drive industry growth as states consider banning plastic bags at grocery stores. To improve growth in the industry, companies will increasingly move into the development and sale of innovative and higher-value products to attract sales in niche markets. As a result of these trends, IBISWorld expects revenue to increase over the coming five years."
Market share concentration within the Coated and Laminated Paper Manufacturing industry is low, although the top four producers account for 36.9% of total industry revenue.
The level of concentration within the industry rose over the past five years. Companies such as Bemis gained a significant market share primarily because of its aggressive acquisitions. The industry is characterized by a large number of medium-size businesses, with about 655 firms currently operating.
The number of companies in the industry fell slightly over the past five years; in 2006 there were 700 enterprises. The second major player identified in the report is Avery Dennison Corporation.
IBISWorld Recognized as the nation's most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry.
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