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Sack Kraft Paper Market – Growth, Trends, COVID-19 Impact, and Forecasts (2021 – 2026) – Press Release

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New York, Sept. 06, 2021 (GLOBE NEWSWIRE) — Reportlinker.com announces the release of the report “Sack Kraft Paper Market – Growth, Trends, COVID-19 Impact, and Forecasts (2021 – 2026)” – https://www.reportlinker.com/p06134956/?utm_source=GNW
However, by mid-year, a return to more normalized operation, lean inventories, and increased demand helped the major player operating in the market mitigate the impact of the pandemic.

Furthermore, factors, such as porosity, durability, extensibility, printability, coupled with strength equal to plastic or synthetic materials are also expected to aid the growth of the market over the forecast period.
The growing awareness among environmentalists and governments about the hazards of using plastic is forcing them to focus on greener alternatives, which is favoring the adoption of sack kraft paper. A steady rise in demand in the construction industry, owing to infrastructure projects, has contributed to the increase in the use of sack kraft paper. Recycling remains one of the major trends observed in these industries. According to Bureau of International Recycling (BIR), around 420 million tonnes of paper and cardboard are produced worldwide every year, with well over half of the raw material coming from recovered sources.
Further, the acceptance of the demand for biodegradable packaging in an alternative to plastic is expected to increase the market growth. For instance, in Canada, Plastic is polluting rivers, lakes, and oceans, harming wildlife, and generating microplastics in the water. Every year, Canadians throw away 3 million ton of plastic waste, only 9% of which is being recycled, meaning the vast majority of plastic ends up in landfills, and about 29,000 ton finds its way into the natural environment (Source: Borden Ladner Gervais).
Sacks filled with powdered materials, such as gypsum, cement, fine-grained sugar, clays, etc., which are required for papers with high quality, is also aiding the market growth exponentially. The sack also exposes to less strain during filling, leading to a lower sack breakage which increases its adoption in the cement industry.
The Tensile Energy Absorption (TEA) values of sack papers have been improved and increased owing to intensive research and development work during the past decade. The 2×70 g/sq. m sack is standard in many countries, such as the United States, Germany, the United Kingdom, and China.
The increasing popularity of e-commerce and the related developments have led to the premiumization of kraft packaging. This includes the demand for kraft material which can take high-quality graphics on short print runs. Companies like Mondi have been keeping up with such developments and have developed a new product that targets premium creative print and packaging applications, including shopping bags.
Moreover, a new capacity of sack kraft is being added to the market to address the supply-demand gap, majorly contributed by increased/restarting production, investment in new machinery and acquisitions. For instance, in February 2021, Nine Dragons announced plans for the construction of a USD 4.6 billion paper mill in southern China, one of the company’s considerable investments in response to China’s recovered fiber imports ban. Slated for completion in 2025, the mill takes in recycled pulp and have the capacity to produce almost 8 million metric ton of paper per year.
However, the emergence of alternatives, such as plastic materials and flexible intermediate bulk containers and bulk bags, rise in prices of sack kraft paper may hinder the growth of the market.

Key Market Trends

Food is Estimated to Have Significant Share in the Market

Amongst various end-user verticals, the food industry is a significant deployer of sack kraft paper and is driven by the ancillary demand of the food industry. This can be identified by the growing consumer spending on the food industry, which reached GBP 103,379 million in 2020, according to the Office for National Statistics as published in March 2021.
Sack kraft paper is mainly used to transport food products, such as flour, sugar, starch, food additives, processed or dried fruit, eggs, or milk, etc. Mostly used in the form of open mouth or valve sacks, the sack kraft for food packaging contains two to three layers of paper and is often combined with a polyethylene (PE) free film tube inliner and/or coated paper. The increase in popularity of quick-service restaurants among urban youth is catering to the demand for sack craft paper. According to International Franchise Association, in 2021, Franchising is projected to open more than 26,000 locations, add nearly 800,000 new jobs, and contribute USD 477 billion to the US GDP.
Furthermore, kraft paper bags are one of the most common bags that are available in most departmental stores and grocery stores. According to the US Census Bureau, the total sales generated by grocery stores in the United States in 2020 amounted to USD 759.57 billion from USD 682.86 billion in 2019. The US grocery retail market is dominated by chain supermarkets. The leading American supermarket in terms of sales is the Kroger Company, which owns and operates several smaller supermarket chains across the United States.
Moreover, the consumer’s preference along with the green regulations from the FDA across the regions also promotes sack kraft packaging in the food industry. The European paper sack and sack kraft paper industry have contributed many developments that make paper sacks the perfect packaging for food. According to Paper Shipping Sack Manufacturers’ Association (PSSMA), paper shipping sacks and consumer bags used in the food industry have emerged into a billion-dollar industry with shipments of over three billion sacks annually.

Europe has Significant Share in the Market

The region is driven by the demand for sack kraft paper as a primary packaging format for transportation of various products in bulk to lower the total packaging expenditure. For instance, sack kraft paper is largely used for the packaging of pet food in the region in large quantities and is supported by the growing demand for pet food in the region.
Furthermore, the UK region is marked with various major global key players offering sack kraft paper with production units in the region. Companies, like Mondi Group, operating throughout Europe with a significant presence and headquartered in the United Kingdom offer brown, white, and PE-coated paper grades for sack kraft papers used in valve and open mouth industrial bags.
According to the Confederation of Paper Industries (CPI), the United Kingdom region has 47 mills operating throughout England, Scotland, Wales, and Northern Ireland, which produces 4 million tons of paper, with exports of 1 million tons. Furthermore, the country has a consumption nearing 10 million tons, which results in heavy exports of the material.
The food sector is one of the areas in which the European paper sack industry is projected to show its commitment to customer needs over the forecast period. there are challenges in dairy and cocoa industry and drives the vendors in the region to reach such a platform. For individual packaging needs, major international companies are investing heavily in the sack paper kraft R&D activities and establishing new warehouses to cater to the increasing demand.
Moreover, companies in the region are involved in capacity expansion to strategically improve their business opportunity. For instance, Mariinsky Pulp and Paper Mill, a prominent Russian supplier of sack paper, including other paper products is investing in modernizing the existing refining process (two-stage, low-consistency). Segezha Group similarly is investing in modernization and expects to increase the sack kraft paper production to 450,000 metric ton per year by 2021.

Competitive Landscape

The sack kraft paper market is a relatively fragmented market that consists of a large volume of players, including Mondi, Nordic Paper, Segezha, among others, which have the capability to cut out co-packers in the market. Further, the presence of the players’ distribution channel and access to raw material impacts the competition in the regional market. Vertical integration which means raw material suppliers being acquired by converters/packaging companies has been a continued trend since the past couple of years.

January 2021 – Mondi, started up its new specialty kraft paper machine at its Št?tí mill in the Czech Republic. The EUR 67 million investment in the machine makes it Europe’s first dedicated paper machine for specialty kraft paper grades made out of fresh and recycled fiber for retail and online shopping bags. The paper machine is expected to produce up to 130,000 tonnes of specialty kraft paper per year. This recent investment is expected to make the company the largest product portfolio holder for consumer shopping bags in Europe.
March 2021 – Segezha Group and machine manufacturer Bellmer agreed to build a new paper machine at the Group’s paper factory in Sokol, Vologda Region. The new machine is expected to come online in 2023. This project is part of Segezha’s attempts to modernize paper production at its Sokol factory and is projected to increase the Group’s paper output capacity fourfold, from 20 to 80 thousand tonnes per year.

Reasons to Purchase this report:

The market estimate (ME) sheet in Excel format
3 months of analyst support
Read the full report: https://www.reportlinker.com/p06134956/?utm_source=GNW

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