Paperboard Containers and Boxes
SIC 2650
NAICS 32221
Sometimes known as the converted paperboard industry, these manufacturers produce packaging often from purchased paperboard, the manufacture of which is discussed in greater depth under Paperboard Mills. Major segments include folding boxes, set-up (or rigid) boxes, corrugated boxes, fiber cans and tubes, and food containers.
Paperboard container and box makers provide the global economy with packaging and foodservice products. Used in both commercial and consumer applications, such products serve the needs of every industry. The primary application for paperboard containers and boxes is packaging. Boxes can be bright, visually attractive, and informational if they contain individual products, or they can be useful for their sturdiness—including corrugated containers in which various products get sent to consumers or sellers. The first use might be for folding paperboard box manufacturers that produce cereal boxes. The second might be a corrugated container manufacturer's box, to keep the cereal boxes undamaged en route to supermarket shelves. According to Paper, Film & Foil Converter magazine, the challenge for manufacturers in the 2000s will be how they can please their customers' need for "lower costs; quicker turnaround; lower quantity minimums; warehousing of packaging; and faster delivery."
Until the 1970s, and Earth Day awareness programming, paper and paperboard packaging was a largely uncontroversial, almost ignored, aspect of a worldwide product distribution system. Then, as concern over landfills, solid waste, and recycling mounted, packaging was singled out as a major source of waste. Pressure grew in Europe and North America to eliminate or recycle packaging. In Germany, legislation was passed requiring packaging producers to collect and recycle their products. Paperboard packaging has now been banned from landfills in many U.S. states.
To comply with such regulations, packaging producers agreed to use more recycled paper and paperboard in their products. Also, many industrial countries introduced the collection of used packaging for recycling. Packaging producers defended their products, explaining that packaging was vital for the maintenance of public health and economic well-being. Packaging producers maintained that by protecting against damage and spoilage, packaging reduced, rather than added to, the solid waste stream.
Producers claimed that competition with suppliers over packaging materials usually spurred suppliers to find ways of using less packaging, since that reduced the cost of their products to end users. This practice provided an automatic "source reduction" without the need for governmental regulation. (On the average, packaging represented 7 percent of the cost of goods sold.) In food and beverage packaging, the industry's reliance on single-use containers helped to improve public health by virtually eliminating one possible method of disease transmission. According to packaging producers, these benefits meant that packaging could be environmentally compatible and would continue to have a prominent role in the world economy.
Globally, the category of corrugated paperboard boxes has been the largest component of the converted paper and board products industry. By the beginning of the 2000s, corrugated boxes were used to ship 90 percent of the goods manufactured throughout the world. Major industrial users of corrugated products included food and beverages, agricultural products, paper and fiber products, petroleum, petrochemical resins, plastics, and rubber products. In order to reduce costs, some manufacturers began to examine the use of reusable plastic containers for business-to-business shipments (such as automobile components). In general, however, corrugated box manufacturers had relatively little need to consider alternative shipping methods. Corrugated containers, in the form of point-of-sale displays, were increasingly used as an integrated transportation and marketing device.
As of 2003, corrugated and cartonboard materials accounted for 30.2 percent of global paper and paperboard demand. World demand for containerboard grew from 91.8 million tons in 1999 to 102.2 million tons in 2003. Asia was expected to have the greatest growth potential, with demand expected to grow 4 percent per year through 2005. China has been the biggest factor in industry growth, due to the rapid expansion of its manufacturing industries and the consequent need for corrugated boxes for shipment.
Consumption of corrugated products tends to reflect the overall standard of living and economic activity in most countries. Highly developed countries with complex, consumer-oriented economies are typically heavy users of corrugated boxes. Paper, Film & Foil Converter magazine also revealed that demand for corrugated and paperboard boxes was projected to climb 2.8 percent per year, reaching more than $35 billion in 2007, with corrugated and solid fiber boxes offering the best prospects during the period.
The primary raw material in making both corrugated boxes and folding paperboard boxes is paperboard. The types of boxes and packages they are used to make classify various grades of paperboard. Cartonboard is usually defined as board of various compositions, used to make folding boxboard and set-up (or rigid) boxes; foodboard is defined as single or multi-ply paperboard, used for food and liquid packaging; and corrugated is typically defined as board for containers, consisting of two or more linerboard grades separated by corrugated medium (fluting) glued to the liners.
In the early 2000s, a large share of the global corrugated box market was integrated; that is to say, the containerboard (linerboard facing and corrugated fluting) used to make corrugated boxes was never sold on the open market. Instead, product was shipped directly from containerboard mills to corrugated box plants, within the same organization. In the United States, 80 percent of corrugated box production was integrated, with just 20 percent produced by independent box plants. The European market was more fragmented—many small independent boxmakers still operated—but a steady trend of consolidation began in the 1990s, with production expected to be under the control of fewer companies in the twenty-first century.
Shipments of corrugated and solid fiber boxes mirror the demand for products that are shipped to market in box containers. When worldwide industrial activity picks up, so does box shipments. When industrial activity increased in most of the major economies worldwide in the early to mid-1990s, corrugated container producers around the world struggled to keep up demand. For example, there was a 6 percent increase in demand for corrugated and solid fiber boxes in 1994. As the economy in the 2000s showed signs of weakening and then definite areas of collapse, the packaging industry's profits reflected a drying up of commercial opportunities as well.
Since there are thousands of different applications for corrugated boxes, many weights, various degrees of thickness, and combinations of liners and corrugating medium, are used to make different types of corrugated board. The corrugating process begins when flat, corrugating medium board is softened with heat and moisture and sent into a set of corrugating rolls. These rolls form the board into curved "flutes." The flute tips on one side of the medium are then coated with adhesive, and a separate, single face-piece of linerboard is laid onto the fluted medium to produce a "single face" web. This sheet of corrugating material is sent to the "double backer," where adhesive is applied to the other side of the flutes, and then back liner is applied to form "combined corrugated board." This combined corrugated board is cut into individual "blanks" on a trimmer-cutter, which, in turn, are passed to a printer-scorer-slotter that converts them into flat boxes. The flat boxes are shipped—usually by truck—to the end user, who opens and glues the box prior to use. Corrugated containers are generally delivered by truck because of the large number of customers and a (traditionally commonplace) demand for timely service. Shipping costs are a relatively high percentage of total costs due to the dispersion of customers and the fact that boxes are high-bulk, low-density, and low-value products. As a result, box plants tend to be located close to customers to reduce shipping costs.
Corrugating materials can be made from a wide variety of materials. The outside linerboard is usually a mix of virgin softwood pulp, virgin hardwood pulp, and/or recycled paper and board. The inner corrugating medium is typically made of virgin hardwood pulp and/or recycled paper and paperboard. In the pulping process, most pulp used as a corrugating medium is not fully "cooked" in the digesting process, since it is beneficial to keep some of the lignin in the pulp (see Pulp Mills for more information). This lignin, which acts as glue, helps give the corrugating medium added stiffness.
Corrugated boxes have been recycled for years to make them into new containers. However, events in the latter part of the twentieth century put more emphasis on recycling of OCC, which accounted for the majority of all paper products recycled around the world, from the late 1990s through the early 2000s.
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