Declining sales for downstream companies hampered demand for industry products.
New York, NY (PRWEB) January 20, 2014
The Coated and Laminated Paper Manufacturing industry's performance over the five years to 2014 was lackluster, largely due to deteriorating demand levels from cement manufacturers and publishers. During and subsequent to the recession, declining sales for these downstream companies hampered demand for the coated paper and flexible packaging offered by industry operators. While the food and beverage sector was relatively unaffected by the weakening macroeconomic environment, given the nondiscretionary characteristics of its products, this was not enough to sustain demand for the industry. Over the five years to 2014, revenue for the Coated and Laminated Paper Manufacturing industry is anticipated to increase slowly, largely due to the low base that 2009 provides, at an annualized rate of 0.9% to $21.0 billion, which includes an anticipated 1.8% rise in revenue in 2014 alone.
According to IBISWorld Industry Analyst Stephen Hoopes, “Not all trends have proved detrimental to the industry over the five-year period.” For example, a beneficial circumstance for the industry has been subdued growth in the value of the US dollar, which has boosted industry exports and provided growth opportunities for a number of coated and laminated paper manufacturers. As a result, exports are anticipated to increase at an annualized rate of 4.9% over the five years to 2014, rising as a share of revenue from 19.1% in 2009 to an estimated 23.2% in 2014. Furthermore, recent improvements in domestic publishing and construction have increased the need for coated and laminated paper and multiwall sacks, respectively, in the past few years.
“Over the five years to 2019, escalating demand from emerging markets will continue to fuel export growth,” says Hoopes. However, rising competition from low-cost imports is anticipated to prompt additional players to offshore production or exit the industry entirely. Nevertheless, environmental concerns are expected to drive revenue for industry operators, as more states consider banning plastic bags at grocery stores in favor of paper bags or reusable canvas bags. Moreover, companies in the industry are anticipated to increasingly develop and sell innovative products in order to attract sales in niche markets and ultimately differentiate themselves in this competitive industry. As a result of these trends, industry revenue is projected to increase over the five years to 2019.
Market share concentration within the Coated and Laminated Paper Manufacturing industry is low. Many of the industry's largest players have expanded their share of the market over the five-year period through aggressive acquisitions. There is sufficient competition in the industry to ensure that no single operator has the ability to take a large share of the market. However, the industry is in the decline stage of its economic life cycle, as indicated by high levels of competition, poor returns on investment and low profitability for most companies. Consolidation in the industry is expected to continue over the five years to 2019, as larger firms buy smaller struggling ones or merge with other major players.
For more information, visit IBISWorld’s Coated and Laminated Paper Manufacturing industry in the US industry report page.
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IBISWorld industry Report Key Topics
Companies in the Coated and Laminated Paper Manufacturing industry primarily manufacture products that include coated or laminated paper and packaging, multiwall bags and laminated aluminum foil for flexible packaging. Operators in this industry also purchase raw materials, such as paper and paperboard, and process them with plastic, clay, latex and metal to create industry products. This industry does not include companies that manufacture paper from pulp (see IBISWorld report 32212).
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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