Key Market Overview:
Kraft paper market size was worth over 17.28 USD in 2022 and is anticipated to reach over USD 22.06 by 2030, registering a CAGR of 3.1% during the forecast period (2022-2030).
First invented in 1879 by Carl. F Dahl, Kraft paper is naturally biodegradable, machine-made paper. Just like any other paper is made, kraft papers are also produced by the chemical conversion of wood into wood pulp. However, kraft paper is made by layering and corrugating the material into something much stronger and more durable than other types of paper. They have strong tensile strength, and durability, and are relatively coarse. Several chemicals are added to the kraft paper to make it thicker and stronger while keeping it lightweight.
With ever-growing awareness regarding environmental issues among consumers, the demand for eco-friendly products is increasing. Kraft paper, being fully recyclable as it is made from the cellulose fiber of the wood, fits the list of such environment-friendly products. This paper also has a high demand in a wide variety of applications such as pouches, bags, cans, and cartons. The kraft paper market is also expected to grow with increasing advancements in the packaging and e-commerce industries. Additionally, other sectors like transportation and building & construction are also set up to surge the market growth.
|Report Attributes||Report Details|
|Market Size in 2030 (USD Billion)||22.06 Billion|
|By Product||Specialty Kraft Paper and Sack Kraft Paper|
|By Type||Virgin Kraft Paper and Natural Kraft Paper|
|By Grade Type||Bleached and Unbleached|
|By finished Type||Glazed and Finished|
|By Packaging Form||Bags and Pouches, Sacks, Envelopes, Corrugated Sheets, Cartons, and Others|
|By End User||Food and Beverages, Pharmaceuticals, Building and Construction, Cosmetic and Personal Care, Electronics and Electricals, and Others|
|By Geography||Asia-Pacific [China, Southeast Asia, India, Japan, Korea, Western Asia] Europe [Germany, UK, France, Italy, Russia, Spain, Netherlands, Turkey, Switzerland] North America [United States, Canada, Mexico] Middle East & Africa [GCC, North Africa, South Africa] South America [Brazil, Argentina, Columbia, Chile, Peru]|
|Key Players||Roxcel Handelsges.m.b.H, Eagle Paper International, Inc., Thai Paper Mill Company Limited, International Paper, Hazel Mercantile Limited, Mondi Group, Nine Dragons Paper (Holdings) Limited, Groupo Europac, Astron Paper & Board Mill Smurfit Kappa|
The market is estimated to grow substantially due to its heavy demand in the packaging industry owing to numerous factors like high tensile strength, good folding resistance, and durability. Along with that, stringent regulation set by the government on the usage of plastics has increased the need for kraft paper which is biodegradable in nature and bio-compatible. Additionally, the significant demand from the transportation industry for food products such as flour, sugar, eggs, and many more is also increasing the market share. Furthermore, with rising advancements in the e-commerce sector, the demand for kraft paper in different applications is expanding. Hence, all these factors serve as major drivers for the kraft paper market.
Uncertainty in the availability of raw materials is the major restraint faced by kraft paper manufacturers that hinder the market growth. Even if the raw material is available, fluctuation in its cost hampers the market share. Moreover, the lack of expenditures by the government coupled with limited knowledge regarding the material, especially in developing countries also restricts market growth.
Growing demand for the biodegradable alternative to existing plastic materials and strict rules implemented by the government of many countries in terms of environmental issues on plastics are expected to create opportunities for manufacturers. This popularity along with smart packaging and the latest trends in packaging is also anticipated to offer lucrative opportunities for the market.
The kraft paper industry has been significantly impacted due to the COVID-19 pandemic in many different parts of the world. The factors such as limited availability of raw materials, reduced material sourcing, and economic slowdown are the major impacts of COVID-19 which hampered market growth. Shipments were impacted during the initial lockdown owing to the disrupted supply chain, stringent government regulations especially lockdowns, infection awareness, and travel limitations. That caused the complete shutdown of businesses like hotels, restaurants, and other food outlets were closed due to the lockdown, resulting in a decline in kraft paper usage. However, the e-commerce platform surged the demand for kraft paper online and hence had a positive effect on the kraft paper market.
Kraft Paper Market Segmentation:
The product segment is divided into specialty kraft paper and sack kraft paper. The sack kraft paper segment dominates the kraft paper market with the fastest CAGR of over 4.04% in the forecasted future. With the increasing expansion of the building and construction sector, the demand for sack kraft paper is expected to witness an increase attributed to high mechanical strength. In addition, these papers find wide applications such as coating, packaging & wrapping, laminating, and spiral-wound products as sack paper contain up to 5% recycled materials. Further, the food industry also takes advantage of sack kraft papers owing to the factor that it meets all the food contact requirements for greasy, wet, and dry food below 220°C, if it is produced naturally.
The type segment is bifurcated into virgin kraft paper and natural kraft paper. Virgin kraft paper is the largest contributor in the world of papers due to which these papers are estimated to dominate the market in the forecasting period. Owing to its strong, durable, and clean fiber content, they find many heavy-duty applications in several different sectors. Additionally, they are suitable for printing which makes them suitable for industrial branded packaging, pallet interleaving, protective layering, and wrapping.
However, natural kraft papers are not as strong and tear-resistant as virgin kraft paper but still have the strength to perform jobs like void filling and liners for boxes and trays. Moreover, they are recyclable which makes them biocompatible and cost-effective. Due to this factor, they are gaining popularity among the food & beverages, packaging, and e-commerce industries.
By Grade Type
The grade type segment is divided into bleached and unbleached. The bleached segment also known as white kraft papers is estimated to dominate the market and is projected to increase the market growth in the coming future. These papers undergo several chemical and bleaching treatments that make stronger and more durable kraft papers than the known conventional ones. Due to their high mechanical strength, they are used in packaging & wrapping, and protective layering sectors. These papers are 100% recyclable and eco-friendly which promotes their usage in varied sectors for several applications. Further, unbleached softwood kraft pulp is also used in electrical transformer boards, cement, fiber, and packaging along with insulation papers and specialty papers. Thus, it is typically noticed by major end-use customers to differentiate between bleached and unbleached kraft paper as unbleached ones are offered only in brown color. Being completely free of chlorine, this paper is widely used as the perfect option for disposable packaging purposes by end-use industries, especially hotels and restaurants.
By Finished Type
Based on finished the market is segmented into glazed and finished. The finished segment is further sub-segmented into machine finished and smooth-finished. This segment is anticipated to hold dominance in the market growth in terms of the largest market share. The factors such as superior print quality, smooth texture, and convertibility are considered during using these papers in carrier bags, wrappings, PE laminated products, fill and seal applications, and aluminum foil applications. Further, the glazed component is also projected to support the market growth in terms of value. Glazed paper is bleached kraft paper that has a high glossy texture on one side of the paper making them opaque, durable, and printable. Thus, these papers are predominantly used in industrial coating & lamination and food packaging & wrapping applications for increased aesthetics of the end product.
By Packaging Form
Based on packaging form, the market is divided into bags and pouches, sacks, envelopes, corrugated sheets, cartons, and others. Among these packaging forms, corrugated sheets hold the market dominance of over 36.5% share. These sheets are widely used in the shipment and transportation industry owing to the factors that they protect the goods and offer easy handling of shipment. Moreover, they are recyclable and reusable, hence minimizing waste. Different sectors such as construction & building, food & beverages, personal care & cosmetics have a high demand for corrugated sheets. Moreover, the bags and pouches segment is also anticipated to contribute substantial shares in terms of volume. This packaging form witnesses high demand especially in food delivery services. Such favorable preference is due to the heat-sealed closure type and matte finish of the pouch.
By End Use
The end user segment is separated into food and beverages, pharmaceutical, building and construction, cosmetic and personal care, electronics and electrical, and others. The food & beverages (F&B) industry contributes the largest market share in terms of volume and revenues. This industry is responsible for maintaining high product quality in terms of biodegradable grade, ease of transportation over long distances, and high weight capacity. Furthermore, the construction & building segment is also projected to support the market growth in terms of revenue. Heavy duty application required in this segment is filled by the kraft papers owing to their high tensile strength, strong durability, and flexibility. These properties are of high use in the manufacturing of building products such as protective sheets over the flooring, cabinets, and countertops which reduces the fear of foot traffic, paint, spills, or any type of staining.
The regional segment comprises Asia Pacific, North America, Europe, Latin America, the Middle East, and Africa. North America led the market growth, accounting for a sizable market share. Due to advanced technology, and the rising food industry, the kraft paper market is estimated to grow substantially in this region. Additionally, the government is encouraging manufacturers and consumers to use recyclable and environment-friendly products which primarily supports the demand for such environment-friendly alternatives to plastic sheets.
Further, Asia-pacific is also estimated to support the market growth in terms of steady shares. With the increasing population the rise in demand for food increases leading to the need for the packaging & wrapping industry. Thus, resulting in increasing demand for kraft papers. Developing infrastructure in countries like China, Japan, South Korea, and India increases the demand for these materials in the construction and building sector.
Kraft Paper Market Competitive Landscape:
The nature of competition in terms of the global market is primarily competitive due to the presence of extensive numbers of market players. These industry players have adopted multiple business strategies through product innovations to attract more profits to the market. As a result, other players are also engaging to form collaborative efforts and joint ventures for the creation of revenue generation opportunities in the coming years. Mentioned are the prominent market players that consist of the latest market concentration–
• Roxcel Handelsges.m.b.H
• Eagle Paper International, Inc.
• Thai Paper Mill Company Limited
• International Paper
• Hazel Mercantile Limited
• Mondi Group
• Nine Dragons Paper (Holdings) Limited
• Astron Paper & Board Mill
• Groupo Europac
• Smurfit Kappa
• In October 2022, Mondi, the leader in wrapping & packaging, and paper publicized the approval of Euro 400 million investment in a new and advanced paper machine to increase growth in ecological packaging.
• In August 2020, a firm named Naini, located in Uttrakhand, India introduced their absorbent kraft paper possessing properties like excellent formation, low MD/CD tensile strength, and good dimensional stability.