Sack Kraft Paper Market Industry Analysis, Gross Margin, and Business

Posted by anagha on February 12th, 2019

A sack kraft paper manufactured from paper or paperboard made of wood pulp is a porous paper with strong tear resistance and high elasticity. Kraft paper is designed for packing products packaging and storing powder materials such as cement, flour, and animal feed. The increasing demand for bio-degradable packaging, owing to use of environment-friendly material with properties such as porosity, durability, extensibility, and printability is a factor expected to drive growth of the market. According to Coherent Market Insights’ study, the global biodegradable packaging market was valued at US$ 3,927.0 million in 2016 and is expected to expand at a CAGR of 20.8% in terms of revenue. However, the lack of raw material and its high cost are some of the factors hindering growth of the sack kraft paper market.

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White sack kraft paper segment accounted for to the largest revenue share in 2016, owing to properties of white paper to enable halftone printing and enhance the printing appearance compared to brown sack kraft paper. Among end-use industries, cement and building materials segment accounted for the largest market share, owing to rapid growth in construction and increasing demand for building materials. Various properties are considered while choosing the paper grade for construction of cement sacks, as it must be able to provide high strength. According to Department for Business, Energy & Industrial Strategy, the production of cement material was 15,004 thousand tons in 2016 for use in the construction industry.

Asia Pacific was the dominant region in the global sack kraft paper market in 2016, valued at US$ 3,314.74 million and is expected to continue its dominance over the forecast period. The market in Asia Pacific is driven by growing construction activities in India and China. According to India Brand Equity Foundation (IBEF), a part of the Department of Commerce, Ministry of Commerce and Industry, Government of India, the Indian construction industry is expected to increase to a value of US$ 5 billion by 2020 and cement production capacity is expected to reach 550 million tons by 2025. According to Ministry of Commerce People’s Republic of China, in 2016, China introduced an anti-dumping duty on imports of unbleached sack kraft paper from the U.S, Europe, and Japan, which is expected to positively affect the market in the region.

Europe is the second largest region in global sack kraft paper market, owing to increasing demand from the food industry. Governments of various countries in the region have imposed regulations to ensure hygiene and food safety of consumable products. According to European Commission, Regulation (EC) 852/2004 on hygiene foodstuff was imposed to ensure safety of food products, is one of such regulations. This has impelled manufacturers to update on materials, technology, and others required for packing of such products. Therefore, different sealing, barrier, and coatings have been developed to protect the contents from moisture, odor of mineral oil, and others to ensure a tight closure of the sack. For instance, Mondi, one of the leading player in sack kraft paper market introduced paper sack with an inner polypropylene bag for dry dairy packaging products, which can be easily separated from the outer paper plies for enhanced product protection.

The sack kraft paper market was valued at US$ 8,886.51 Million in 2016 and is expected to expand at a CAGR of 3.55%, in terms of revenue, over the forecast period (2017–2025).

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Major Players in the Global Sack Kraft Paper Market:

Manufacturers are focusing on various strategies such as developing innovating packaging solutions to expand their product portfolio and enhance their position in the global market. For instance, in 2016, Mondi plc manufactured iFoodbag from a paper-based composite material, which has ability to maintain the temperature of frozen goods for at least 24 hours

Some of the key players in global sack kraft paper are BillerudKorsnas AB, Segezha Group, Nordic Paper, Mondi plc, Natron-Hayat d.o.o., Gascogne Group, Tolko Industries Ltd., Canfor Corporation, KapStone Paper and Packaging Corporation, and Horizon Pulp & Paper Ltd. 

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