riven largely by demand for recycled content oackarring, recvcled boxboard holds nearly 60-pertent ofvthev foldhg boxboard market.
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1 D riven largely by demand for recycled content oackarring, recvcled boxboard holds nearly 60-pertent ofvthev foldhg boxboard market. by Bill Moore It s likely that any consumer product that s cycled boxboard industry, which emerged as They produced virgin linerboard, fine paper ever needed to be packaged has been placed an important segment of paperboard packag- and a number of other paper and board pro in a boxboard package at one time or another. Recycled boxboard, which is produced from 100 percent recovered paper, is widely used in consumer packaging applications such ing after World War 11, is quite interesting, and is a recycling story in its own right. ucts. When these paper mills were built, they were the state of the art and many of them were located relatively close to urban the centers of the early 20th century U.S. as cereal boxes, laundry detergents, pizza box- The birth of a recycling industry By the middle of the 20th century, these es and a host of other uses too numerous to In general, the paper machines used in the re- mills had become less efficient in output ad mention. cycled boxboard industry are a group of old- quality than the newer paper machines. Many In 1993, the recycled boxboard industry er, relatively small-output units that, in the of these small paper mills were then idled produced 2.15 million tons of clay-coated re- first half of the 20th century, were the first- the operations became uneconomic, becaus cycled board. All recycled boxboard grades, line producers in the pulp and paper industry. of their small size, outdated design and Un- I including clay-coated, laminated and darker recycled varieties, constituted 2.9 million tons Bill Moore is a partner with Atlanta-based Thompson Avant International, Inc., a consulting firm to the t produced in The evolution of the re- pulp, paper and recycling industry.... Resource Recycling November RECOVERED PAPER SUPPLEMENT. ri 4
2 Austell, desirable location. (By mid-century, operating a paper manufacturing facility based on virgi.rl pulp didn t make good economic sense in urban areas. due to emissions. effluents and depleted forest resources.) Beginning in the late 1940s and 1950s, a number of entrepreneurial companies took these idled or inefficient paper mills and created the recycled boxboard industry by truly recycling the mills themselves. The virgin pulping capacity of these mills was idled or dismantled, and secondary fiber processing systems were installed to produce recycled pulp. These machines, although not capable of makmg state-of-the-art low-caliper (thickness), high-quality products, were quite suitable for making recycled boxboard with its relatively low strength and low quality. (This recycling of the mills themselves fol- lows the natural progression of a paper machine. Boxboard production is actually the middle stop on the way through the life of a paper mill. It is generally accepted that when a recycled boxboard mill is no longer capable of producing boxboard because of size and quality concerns, the last stop on the road Major U.S. recycled boxboard producers (1) Number of Company Headauarters boxboard mills Capacity (21 Caraustar Industries, Inc. GA ~ Federal Paper Board Company, Inc. Montvale, NJ James River Corporation Richmond, VA Jefferson Smurfit Corporation St. Louis, MO The Newark Group, Inc. Cranford, NJ Packaging Corporation of America Evanston, IL Rock-Tenn Company Norcross, GA Waldorf Corporation St. Paul, MN (1) The mills fisted above are the boxboard manufacturing companies whose capacity is 150,000 tons per year or greater. Mill capacity was defined by assigning a mill s entire output to its predom product, so capacity numbers actually overstate demand at each company. (2) In thousand tons per year. This capacity is not solely folding boxboard, but includes and tube chip board, which use similar feedstocks and paperboard machines for their production. Sources: Thompson Avant International, 1994; Jaakko Poyry Consulting, component of the Canadian pulp and paper industry because of Canada s abundant forest resources. At one time, however, in Ontario, companies like Strathcona and Belkins did produce substantial quantities of recycled to the scrap yart is to become a tube and core boxboard. In the late 1980s, these mill commill.) panies, which operated as a legal cartel al- There are a number of major producers of lowed by Canadian law, were forced out of recycled boxboard (see Table 1) in the US., business by the wholesale movement of Canabut no major Canadian producers of recycled dian converters to less expensive U.S. recyboxboard. This sector was never a very large cled boxboard producers. 100 percent recycled The recycled boxboard producers are one of the ultimate users of recovered paper. Their furnish is based on 100 percent secondary fiber and they use a wide variety of grades, ranging from pulp substitutes all the way down through mixed paper and even wastewater treatment sludges. The importance of this sector to the recovered paper market is reflected in its use of approximately 45 percent of the old corrugated containers (OCC),
3 45 Frcent of mixed papers and 30 percent of the old newspapers (ONP) utilized by- paper mills in the U.S. today. Before the large increase in the use of ONP in neu,sprint in the early 1990s, the predominant use of ONP, in the form of No. 6 news, was in recycled boxboard. The most common recycled boxboard product is a clay-coated one-side board. The top coating is a high brightness titanium dioxide clay coating, which is generally kept very thin because of its high cost and is usually ap plied over a relatively bright substrate made from either pre-consumer white pulp substitutes or bleached virgin market pulp. At this point in time, we are not aware of any deinking taking place to produce this substrate. These products are produced on cylinder paper machines that are generally capable of malung paperboard with six to eight layers. The number of layers depends on how many different pulping systems the mill has. The core layers (or plies) of the boxboard are produced from a mixture of recovered paper containing primarily old newspapers, old cormgated containers and mixed ). The primary finishes on the backside of the board are knbwn as newsback, brownback or pearlback. These finishes are obtained by using either ONP, OCC, double-lined kraft cuttings (DLK) or a mottled news finish. The use of OCC and DLK vary based on desired
4 .)urce of fotding boxboard. From the late 950s to the early 1980s, solid bleached sul- Ite (SBS) grades gradually gained market New recycled boxboard demand in Canada hare, moving up to approximately 35 perent of the boxboard consumed domesticaly. During the fust half of the 1980s, the mar-.et was roughly stable 65 at percent recycled )oxboard and 35 percent SBS. In 1993, SBS production had slipped to hut 29 percent of folding boxboard, because )f price competition from less costly sorid un-,leached sulfate (SUS), also known as coat- -d unbleached kraft, and recycled boxboard gades. htially in the latter half of the 1980s, recycled boxboard and SUS grew at an even rate. Toward the end of the decade, however, growth in the recycled boxboard grade increased more rapidly because of environmental concerns, which placed a stronger emphasis on greater use of recycled paperboard fibers. That emphasis, coupled with the lower raw material costs of recovered paper, make recycled boxboard even more price competitive. All of the increase in the market share of recycled boxboard.versus virgin SBS occurred without any legislative mandates. The gain Over the past five years, coated recycled Including all of the recycled boxboard grades was market-driven in two ways: the lower boxboard had the largest growth of all fold- (clay-coated, laminated and darker recycled prices of recycled boxboard and demand from ing boxboard grades. Approximately 43 per- varieties), a total of 58 percent of the folding consumer product makers for recycled con- cent of the folding boxboard industry's con- boxboard industry's total production was sumption oxes. tent was 100 percent recycled boxboard. made from recovered paper.
5 Because of the growth of this sector of the paperboard industry in the last 25 years, the major producers created what is today the paperstock industry. All but two of the major recycled boxboard producers in Table 1 - James River and Federal Paper Board - are back-integrated into the recovered paper collection and processing business. In many respects, this sector of the paper industry created the recycling collection and processing infrastructure because they had other no way to get their raw materials other than to develop it themselves. An ambiguous future There is some uncertainty about the future of the recycled boxboard industry. This industry sector experienced extraordinary growth and strong profitability over the last five years. As a result of this profitability, small, family-owned boxboard companies like Caraustar and Rock-Tenn were highly successful in recent initial public stock offerings. The current industry forecast for growth over the next five years in the recycled boxboard sector is a minimal 1 to 2 percent per year. There is some concern among strategic ex- ing. The major virgin-based SBS and coatperts in the paper industry that recycled ed, solid, unbleached sulfate board producboxboard producers may have seen their day ers with high-efficiency, -quality and -output in the sun and that they may actually experi- paper machines are beginning to add recyence a decrease in their market share. cled content to their sheet to satisfy market The bases for these forecasts are interest- demand. This means that, combined with the recent rapid rise in the cost of virgin raw materials (and expected continued strong prices for recovered paper), the recycled boxboard sector will suffer erosion of the favorableconomics that this sector has enjoyed for almost seven years.
6 In this school of thought, when the major SBS and SUS mills can produce a product with a recycled content satisfying the market's desires, then their economies of scale and quality will be an inroad to the recycled boxboard recent market share gains. The recycled boxboard industry crept up slowly at frst and then more rapidly in recent years took market share away from this sector, an the SBS companies took quite a long time to notice what were once considered fringe, u start producers. It will be difficult, however, especially for the SBS users, to obtain high recycled content board. The SBS sector is considering bleaching OCC and deinking office paper to get recycled content; in the coated SUS sector, OCC, ONP and mixed papers can be used. Regardless of the outcome of this competitive and dynamic situation, the recycled boxboard industry remains one of the jewels in its use of recovered paper in the US. The industry is often overlooked for the role it played in closing the loop in the recovered paper cycle. For many people in the recycling field, the recycled boxboard producers are the ultimate recyclers. RR
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