Profit through Innovation - Future of specialty papers

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Future of specialty papers

Written by Pira International, 2007

Specialty papers are of considerable interest to the paper industry. They tend to be higher added-value products that attract a premium, hence a better financial performance for the producer. Pira International provides an overview.

Entering the specialty paper market is often a good way for manufacturers to improve financial performance through improved profits, better use of assets, reduced competition or high growth potential. Capital investments, barriers to entry, quality, cost and product lifecycles can grow rapidly but they can also decline rapidly. High selling prices and high growth rates should not be the only factors that decide market entry. In some situations, being a low-cost producer can be as important in specialty papers as in the commodity market, since it adds to the flexibility of the operations when competition heats up or demand falls.

Emerging technologies in specialty paper markets

Premium document paper

There are various papers for inkjet, laser and thermal printing, but inkjet and laser papers are often interchangeable. The trend is to reduce choice and obtain economies of scale by having a single premium document paper. Inkjet requires short ink-drying times and no bleeding plus a controlled spread of ink with high resolution and no feathering. Inkjet paper also needs dimensional stability so there is no curl. Laser paper needs good electrical properties, such as charge acceptance, and a smooth surface to process smaller toner particles. Mills are trying to develop a substrate that matches both sets of requirements. Thermal paper has different and specific properties, mainly affecting the thermal resistance of the substrate.

Table 1. Specialty papers by end-use market, 2001-06 ('000 tonnes).

Nanotechnology

The main potential for nanotechnology is in ultra-thin surface coatings and barriers for specialty papers. Despite their low thickness, these coatings can still change surface properties. The technology is in its infancy but there are expected to be many applications where it will achieve a strong penetration, particularly in flexible packaging.

Thermal technology

Specialty papers used in the security industry are the most advanced of any specialty papers due to their complexity and use of multilayered systems. The substrate can be modified by using hidden or coded fibres, visible only under ultraviolet (UV) light or specific refraction. Watermarks and embossing add to the security of the substrate but the surface carries most of the security features, such as special foils, holograms, markings and inks. As security features become more sophisticated, thermal printers allow security features to be incorporated on demand.

Substrates and coatings

Electrically active coatings using metal oxides can be used as component layers in high-technology papers. This development is expected to revolutionise the production of batteries, solar cells and flat panel displays.

Environmentally friendly packaging

An innovation by a Japanese paper mill involves forming specialty paper grades into plates and bottles, curved pouches, bags and carton packs, without the use of film laminates.

End uses of specialty papers

The largest specialty paper segment is paper wraps for packaging applications, followed by bags and sacks, labels, inkjet paper and coverings. The highest forecast growth is expected to be in inkjet papers, glassine, thermal papers and industrial filter papers. Segments that have a high added value are bags and sacks, wallpaper, coverings, photography papers and security papers.

Specialty segments showing low growth potential are cheques (due to competition from electronic banking and plastic cards), bags and sacks (saturated markets), engine filters (competition from non-woven polyester depth mat), coffee filters (slow growth in some countries, high growth in others) and photography (competition from digital image storage).

Markets for specialty papers

In 2006 Western Europe had a 32.4 per cent share, the US 32.0 per cent, Asia 26.5 per cent and central geographic region and Eastern Europe 9.1 per cent. Europe has the most sophisticated market with a diverse tradition of specialty papermaking mills. The five major economies dominate European consumption. Central and Eastern Europe has potential; Russia and Poland are the largest economies. Asia has the highest growth rate and potentially offers the largest future market for specialty papers. Japan is a mature but slowly growing economy. India and China have vast populations with large unsatisfied demand.

Table 2. Specialty papers by region, 2001-06 ('000 tonnes).

Over the next few years, the strongest growth performance is expected in Asia, which could eventually catch up and even surpass the US and Western European markets in volume. In Europe all markets show a robust per capita demand. Poland is growing faster and is expected to reach consumption levels similar to Spain's. Russia has a lower per capita consumption and growth is mainly limited to major population centres. The US market is mature, saturated and large but growth has shown signs of slowing. Japan too is mature but hindered mainly by population decline.

The best-performing economies for specialty papers are China and India, where high annual growth rates are expected. They have a long way to go before they reach per capita consumptions similar to those in Western Europe or the US.

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