Kraft Liner Market

Kraft Liner Market size is forecast to reach US$20.3 billion by 2026, and is growing at a CAGR of 3.2% during 2021-2026. The Kraft Liner is characterized by high strength and durability. It is predominantly produced from bleached sulphate pulp or unbleached. Raw materials required for the manufacturing of Kraft liners comprise old corrugated containers (OCC) and virgin fibers in a ratio of 80% OCC and 20% virgin fibers. It may also contain a small portion of recycled paper and wood fibers in the raw material mixture. The Kraft Liner is used as a coating layer of corrugated fiberboard. Corrugated paper sheet is a material consisting of fluted paper sheet and one or two plain linerboards. It is made on corrugators and is used in the manufacture of heavy duty containers for shipping and corrugated boxes for normal packaging. Increasing demand for lightweight packaging papers made from kraft liner for electronic devices, glass objects, and food items ordered online is expected to drive the market over the forecast period.

COVID-19 Impact

Due to the COVID-19 pandemic most of the manufacturing plants were shut down, which declined the production of raw materials and hence the production of Kraft Liners decreased during the pandemic. Also, due to supply chain disruptions such as raw material delays or non-arrival, disrupted financial flows, and rising absenteeism among production line staff, OEMs have been forced to function at zero or partial capacity, resulting in lower demand and consumption of Kraft Liners. Consumer habits changed significantly during the pandemic, affecting the packaging industry. Home delivery of food and consumer products increased the demand for packaging containers and the cartons sold or shipped-in. The e-commerce side of consumer products exploded. Hence the Kraft Liner market is having vast application in Packaging Industry, survived and is expected to recover with minor economic disruptions in the forecast period.

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Kraft Liner Market Segment Analysis – By Type

Virgin Kraft Liner segment held the largest share of 48% in the Kraft Liner Market in 2020. Virgin Kraft liner is a Kraft paper having Virgin top and Kraft on the other side. The virgin top is made from 100% virgin fibre and is widely used in food packaging and consumer durable industry. The GSM Range varies from 200 – 250 gsm. Packing boxes, Book covers are major applications of Virgin Kraft Liner Paper. White top Kraft liner is another grade of kraft paper having white top on side and kraft on the other side. White top can be coated or uncoated based on requirement of the customer and depending upon the application of paper. This board is suitable for high quality printing applications. Un-caoted White top kraft liner starts from 180 gsm and goes upto 350 gsm. Major applications include, Packaging boxes, Industrial packaging, Food packing, consumer durables. Hence the growth in Packaging industry is going to promote growth of Kraft Liner Market in the forecast Period.

Kraft Liner Market Segment Analysis – By Application

Packaging segment held the largest share in the Kraft Liner Market in 2020 and is growing at a CAGR of 4.7% during 2021-2026. According to Smithers Pira, in 2019 the total value of the packaging globally will be $917 billion. The comprehensive research employed in the Future of Global Packaging to 2024, shows that packaging demand will grow steadily at 2.8% to reach $1.05 trillion in 2024. Kraft Liner is a type of Kraft paper, which is a strong, durable and reliable material that has many purposes and is widely used across many different industries. Some of the most common uses for kraft paper include wrapping individual products for protection, economical void fill, palette lining and more. White Top Kraft Liner is typically a virgin paper, is most suitable for a great Printing surface. Made from virgin fiber, Kraft Liner is noted for its high resistance to tearing, stress and punching. These properties make it an ideal paper for manufacturing light weight packaging with complex structures and when higher levels of resistance are required. It is also particularly well suited for moist environments. Hence with growth of packaging industry, The Kraft Liner Market is going to grow in the forecast period.

Kraft Liner Market Segment Analysis – By Geography

Asia-Pacific region held the largest share in the Kraft Liner Market in 2020 up to 44%, owing to the rising demand of the corrugated packaging with kraft liner, along with prevalence of various market players. The packaging market in Asia is expanding exponentially on two fronts. Local markets are spurring massive growth in the industry and companies with Asian-based manufacturing operations are forging new strategic partnerships in the region. According to York Saw and Knife, the Asia-Pacific region represents the largest and fastest-growing corrugated fiber board packaging market in the world, accounting for 53.7% of production and shipments in 2018. More and more U.S. consumers are scanning food packages with their smart phones to find out exactly what they contain. According to York Saw and Knife, the United States accounts for approximately US$170 billion in the global packaging market.  The Flexible Packaging Association reports the flexible packaging segment accounts for 19% of the total U.S. packaging market. Hence the Kraft liner market is projected to grow with contribution from Packaging Industry globally.                   

Kraft Liner Market–Drivers

Growth in the packaging industry

    Growth & potential in consumer packaged goods is very significant in countries such as China and India due to solid demand from the food and Pharmaceutical industries. This is increasing demand for packaging solutions that are convenient and portable. ProVantage Kraft liner is 100% recyclable and therefore is ideal for environmentally sound packaging. By offering superior run ability, this paper withstands the most demanding corrugating and converting processes. It is Stable and uniform moisture and glue absorption properties. ProVantage Kraftliner Aqua is partly water-resistant and used mainly for packaging applications in very humid environments. From food sachets, banderols for yoghurt pots and tea envelopes to cigarette innerliners and softpacks lightweight packaging paper is suitable for a wide range of enduse applications in food and non-food packaging. Hence the widely used lightweight Packaging solution with Kraft liner is going to drive the market in the forecast period.

Rapidly growing e-commerce Sector

The global market for online retailing continues to grow rapidly, driven by penetration of the Internet and smart phones. According to India Brand Equity Foundation, The Indian E-commerce industry has been on an upward growth trajectory and is expected to surpass the US to become the second largest E-commerce market in the world by 2034. The E-commerce market is expected to reach US$ 200 billion by 2026. India’s E-commerce market has the potential to grow to reach US$ 150 billion by 2022 supported by rising incomes and a surge in internet users. This will elevate the demand for Printing and Packaging solutions, especially corrugated fibre board formats that can safely ship goods through the more complex distribution channels. This is simulating an interest in customized or lightweight packaging and packaging solutions that can create an impact with them. This further aligns with the desire for integrated marketing, with packaging providing a gateway to link into social media. Thus, the Kraft Liner Market is growing in the forecast period.

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Kraft Liner Market Challenges

Volatility in the prices of raw material

Kraft Liner has 80% Virgin fibers obtained by the chemical sulfate or soda processes. The kraft process also known as kraft pulping or sulfate process is a process for conversion of wood into wood pulp. Wood products prices typically fluctuate more than most goods. Lumber and plywood prices are so high now because of the short-run dynamics of demand and supply. Wood demand shot up in the summer of pandemic. Demand for virgin pulp, from trees as opposed to recycled cardboard and paper, has been on the rise in China, which has limited scrap imports that it once bought by the boatful to feed its factories. Pulp producers in Europe and North America have been diverting shipments from local spot markets to China to capture the surging prices, analysts say. These factors constrain the growth of the market.

Kraft Liner Market Landscape

Technology launches, acquisitions, and R&D activities are key strategies adopted by players in the Kraft Liner Market. Kraft Liner Market top companies are WestRock Company, DS Smith Plc, Mondi Plc, Stora Enso Oyj, International Paper Company, BillerudKorsnäs AB, Metsä Board Oyj, Klabin SA, Nine Dragons Paper Holdings Ltd., Smurfit Kappa Group Plc, Lee & Man Paper Manufacturing Ltd., Packaging Corporation of America, and Georgia-Pacific Llc.

Acquisitions/Technology Launches

In March 2021, Packaging Corporation of America (PCA) announces a US$440m conversion project aimed at reducing its exposure to fine paper markets and boosting kraftliner capacity. 

Key Takeaways

Asia-Pacific dominates the Kraft Liner Market, owing to the rising demand for corrugated packaging from developing economies on account of growing manufacturing sector.

Kraft Liner with higher GSM (grams per square meter) grades are expected to register significant growth as these products are multi-layered, thick in size, and are attached with cardboard flute which provides a cushion to the object and helps protect it during transportation

Technological developments to produce material grades suitable for lightweight packaging in Food Packaging which can  protect food products from accidental damages and external environment. This factor is anticipated to drive the demand for the product in corrugated fiber board and other packaging products.

Growth in import and export of goods in industries, such as pharmaceutical, textile, consumer electronics, and household appliances have a significant impact on the demand of Kraft Liner and hence the growth of the market is anticipated.

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