Coated Paper Market - Forecast(2023 - 2028)

Coated Paper Market Overview

Coated paper market size is forecast to reach $60.1 billion by 2026, after growing at a CAGR of 3.4% during 2021-2026. To enhance paper surface properties such as gloss, weight, smoothness, and ink retention, the coated paper is formulated with a combination of chemicals and materials such as grounded calcium carbonate, precipitated calcium carbonate, Kaolin Clay, and more. Moreover, to improve wet strength and UV resistance, the coating material is combined with some chemical additives, such as resins and dispersants. The coating makes the base material suitable for printing applications. Over the forecast period, increasing demand for advertising and packaging in various industries will fuel product demand. The demand for goods is also fueled by the growing influence of media ads, such as newspapers, magazines, brochures, and catalogs. Also, the tendency towards creative and environmentally-friendly packaging has led to the emergence of bio-degradable packaging solutions that serve as a key driver for the coated paper industry during the forecast period.

COVID-19 Impact

For customers, companies, and societies around the globe, the coronavirus (COVID-19) pandemic is causing widespread uncertainty and economic hardship. Manufacturers face the particular challenges of the crisis and manufacturers of forests, paper and packaging are no exception. Between the demands for some goods (such as toilet paper and other hygienic products) and an unpredictable outlook for others (such as construction materials), businesses in the sector must also face the challenge of maintaining employee well-being at the same time, managing potentially disrupted supply chains, and assessing the turbulent conditions of the economic and capital markets. Newspaper demand has also decreased, with many readers resisting the prohibition of sellers from joining newspapers and housing societies as precautionary steps, although some magazines have temporarily suspended editions. Both of these factors had a significant effect on the development of the coated paper industry during the pandemic.

Report Coverage

Key Takeaways

• Asia-Pacific dominates the coated papers market, owing to the increasing demand for commercial printing in the region. The increasing urbanization coupled with the rising population in APAC is the major factor driving the demand for commercial printing.
•  Coated paper products are extensively processed along with plastics, latex, clay, and other materials to augment longevity and aesthetic appearance, and improve recyclability, which is projected to increase the market growth.
• To ensure stable growth of the segment over the forecast period, the growing use of coated paper in currencies, security papers, and checkbooks is expected. In addition, continuous use of this commodity as brochures and product manuals can keep demand steady for smartphones, laptops, and other electronic gadgets.
• Widespread digitalization across industries, however, is a major challenge that impedes the growth of the coated paper industry. Companies have been replacing digital alternatives such as videos and tutorials with brochures, catalogs, and guides, thereby discouraging the usage of paper, which restricts the growth of the coated paper sector.
• Bisphenol A is used as a color developer in a thermal paper that after a heating process reacts with a leuco dye and changes it to a colored form. The relatively large use of BPS as a BPA substitute is worrying as bisphenol A is harmful and is also poorly biodegradable, which may limit the demand for thermal coated papers during the forecast period.

Coated Paper Market Segment Analysis - By Product

The coated fine paper segment held the largest share in the coated paper market in 2020 up to 60%. The pulp that has been chemically bleached and contains less mechanical pulp is used to make coated fine paper. Its high grammar and excellent brightness of up to 96% can be attributed to the growth in the adoption of such articles. It is used prominently to generate annual reports, magazines, promotional materials, and catalogs for offset printing applications. Due to its smooth surface with substantial decreases in ink absorbency capabilities, coated groundwood paper is expected to be the fastest-growing market. In general, these papers are lightweight, finding applications in journals, brochures, and catalogs. Furthermore, coated groundwood paper is eco-friendly and economical. It also provides the high stiffness and thickness required for books, calendars, and business communications to be printed. Thus, owing to all these extensive characteristics of coated fine papers, its demand is substantially increasing during the forecast period.

Coated Paper Market Segment Analysis - By Type

The light-weight coated paper segment held a significant share in the coated paper market in 2020 and is growing at a CAGR of 3.5% during 2021-2026. The mechanical papers coated with clay or similar substances and used for printing are light-weight coated papers. Lightweight coated papers range from 35gsm to 70gsm, a wide range that provides the print with a decent amount of luminosity. They are only single-coated and therefore more affordable, considering their range in gsm. During the forecast era, all of these advantageous properties of light-weight coated paper are driving its demand for applications. In these applications, these papers are widely used as they are smooth as well as glossy and absorb less ink on the surface. According to the International Trade Centre (ITC), the world export value of lightweight coated paper used for writing, printing or other graphic purposes increased from USD 2,830,240 Thousand in 2017 to USD 2,843,285 Thousand in 2019. This increase in the export value can be attributed to the increasing demand for magazines, and packaging in the various regions.

Coated Paper Market Segment Analysis - By Coating Material

The grounded calcium carbonate (GCC) segment held the largest share in the coated paper market in 2020. GCC is extracted by fine grinding, washing, and crushing of natural white calcite from natural limestone deposits (CaCO3). GCC provides ideal high brightness particle size, which is important during the manufacturing phase of coated paper. GCC increases the coated paper's brightness, opacity, and gloss and is a cost-effective coating material hen compared with other materials such as Precipitated Calcium Carbonate (PCC), Kaolin Clay, Talc, SB latex, and more. In addition, due to its rhombohedral particle shape, GCC produces a porous surface on the paper sheet and is hydrophobic since it releases water more rapidly. All these extensive characteristics of grounded calcium carbonate (GCC) is the major factor driving its demand as coating materials for coated papers during the forecast period.

Coated Paper Market Segment Analysis - By Application

The packaging segment held the largest share in the coated papers market in 2020 and is growing at a CAGR of 3.8% during 2021-2016. Coated papers are typically used in packaging applications such as folding cartons, beverage carriers, book and report covers, mailing tubes, video cassette boxes, and more. The coated paper used in food packaging is food-grade paper. It prevents moisture and oxygen from moving through, keeps the food content fresh, and gives an extended shelf life. The paper also offers thermal stability against different packages of hot and cold food. In drug and pharmaceutical packaging, coated paper often finds extensive use as it provides sterility and avoids contamination. In addition, the coated paper offers high-end branding with superior styling and varied printing choices, which is the key factor driving demand in the packaging industry for the coated paper during the forecast period.

Coated Paper Market Segment Analysis - By Geography

Asia-Pacific region held the largest share in the coated papers market in 2020 up to 36%, owing to the increasing demand for coated papers from the advertising and food packaging industry in the region. According to India Brand Equity Foundation (IBEF), India’s advertising revenue is projected to reach Rs. 789 billion (US$ 10.81 billion) in FY22 from Rs. 726 billion (US$ 9.94 billion) in FY20. India's advertisement revenue is expected to increase between FY20 and FY22 at a CAGR of 4.3%. In FY20, print platforms stood at Rs. 306 billion (US$ 4.19 billion). According to the Ministry of Industry and Information Technology (MIIT), retail sales of grain, oil, and food reached 499.6 billion yuan (about $70.41 billion), up 13.8% from last year in China. During the period, beverage sales stood at 63.5 billion Yuan in China, a 6.3%growth year-on-year. With the increasing retail sale, the demand for packaging materials will also see an upsurge in its demand. The increasing population and rapid urbanization in these countries are enhancing the demand for advertising through newspapers & magazines, and food retail thereby, accelerating the growth of the coated papers market in the Asia-Pacific during the forecast period. 

 Figure: Asia-Pacific Coated Paper Market Revenue, 2020-2026 (US$ Billion)

Coated Paper Market Drivers

Increasing Demand of Coated Papers for Various Applications

The usages of coated papers are ever-increasing for applications such as printing, business communication, labels, and more. Coated papers, for example, are largely used in packaging materials such as boxes, paper board containers, cartons, packets, cans, and other materials for paper packaging. In printing applications, coated paper is used extensively to improve aesthetic characteristics. Coated paper is often used to communicate critical business information in business communication applications as it provides superior finish and consistency needed to highlight the essential messages. The paper finds its use in business communication in annual reports, catalogs, business documents, office papers, and other corporate communication papers. In addition, coated papers are also used for bottled beverage labels and other items. For hot and cold storage applications, papers in labels exhibit high-temperature stability. Glossy surface, finish, wetting strength, quick ink setting, and extended durability is provided by cast coated labels. Thus, the increasing application of coated papers will eventually drive the market growth.

Increasing E-Commerce Platform Bolstering the Demand for Packaging

The rapid development of the e-commerce industry has paved the way for decorative and luxury packaging, expanding the reach of the demand for coated paper. On the heels of strengthening the presence of online retailers, the growing preference for home delivery services has increased the consumption of coated paper in packaging activities. According to the International Trade Administration (ITA), Malaysia is an attractive e-Commerce market in Southeast Asia because of its competitive economy and its built infrastructure for digital technologies. Malaysia's e-Commerce sector is benefiting from the introduction of programs under the National E-Commerce Strategic Roadmap (NeSR). According to the U.S. Census Bureau forecasts, US retail e-commerce revenue for the first quarter of 2020 at $160.3 billion, a rise of 2.4 percent (±1.1 percent) from the fourth quarter of 2019. Demand for online shopping is growing in developing countries, and labels, plastic bags, and invoices are used for packaging that eventually requires coated paper to mark deliverable packages. The development of the e-commerce platform is therefore a catalyst for the demand for coated paper.

Coated Paper Market Challenges

Drawbacks Associated With Coated Paper

The volatility in the price of wood pulp during the forecast period will have an adverse effect on the growth of the coated paper industry. A substantial change in wood pulp prices is triggered by economic cycles and global supply & trade disruptions. Also, the need for massive capital investment will impede the growth of the market in the future. This investment includes land-related expenses, the setting up of the production facility, the requisite infrastructure, permits, and more. In addition, constraints related to places with plenty of forest reserves, environmental clearances, and water availability can present difficulties for producers of coated paper. Major players, however, align their business models and implement vertical integration strategies to increase their production performance and improve overall process quality.

Market Landscape

Technology launches, acquisitions, and R&D activities are key strategies adopted by players in the coated paper market. Major players in the coated paper market are Oji Holdings Corporation, Nippon Paper Industries Co., Ltd., Stora Enso Oyj, Sappi limited, Asia Pulp & Paper, UPM, J&J Green Paper, NewPage Corporation, Michelman Inc., BASF SE, Imersys, Arjowiggins SAS, and Penford Corporation.

Acquisitions/Technology Launches

• In August 2020, J&J Green Paper launched a unique, environmentally friendly pellet that produces water-resistant coatings for paper and paper packaging without the use of toxic oil-based products.
• In October 2019, Sappi Europe signed a collaboration agreement with HP Indigo to print media in its wood-free coated paper using HP Indigo’s digital imaging technologies. 

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