SIC 2653 Corrugated and Solid Fiber Boxes

SIC 2653

This category covers establishments primarily engaged in manufacturing corrugated and solid fiber boxes and related products from paperboard or fiber stock. Important products of this industry include corrugated and solid fiberboard boxes, pads, partitions, display items, pallets, single face products, and corrugated sheets.

NAICS CODE(S)

322211

Corrugated and Solid Fiber Box Manufacturing

INDUSTRY SNAPSHOT

The United States is the world's largest producer of corrugated and solid fiber boxes, and as of 2007 it accounted for more than a third of total world volume. Corrugated paperboard products are used to ship almost all of the non-durable goods manufactured in the United States—and a majority of the durable ones as well. They face relatively little competition from alternative shipping methods.

Corrugated paperboard products have long accounted for the majority of American paperboard container shipments, holding more than 60 percent of the total paperboard container market. Corrugated product shipments also held about 25 percent of the overall domestic U.S. packaging market—which includes packaging made from wood, paper/paperboard, plastic, metal, glass, composites, and other materials.

Variations in End-Use Markets

The vast majority of corrugated products are used to package non-durable goods, such as food products. The percentage of corrugated products directed toward non-durable goods tends to rise during recessions since the number of high-ticket durable goods shipped—such as stoves and refrigerators—decreases.

Shippers and packagers of food products, the largest market for corrugated products, are likely to be the highest growth market for the corrugated industry. Also, shippers were using more corrugated pallets to replace wooden ones because of concerns about costs and recycling.

One of the key trends in corrugated boxes is recycling; this affects both the material used to make the boxes and how they are disposed of after use. Corrugated boxes are easily recycled and are biodegradable, which tends to help them compete well against plastic products among "green" consumers. Most corrugated products are unbleached, which exempts them from the controversies surrounding bleaching processes in the paper industry. Nonetheless, by 2005 solid bleached sulphate (used in pharmaceuticals and frozen foods) and unbleached kraft (for the beverage market) saw the strongest industry growth. Additionally, more than two-thirds of corrugated products were recovered for recycling into new boxes or other paperboard products, which represents the second highest recovery level of any major consumable material (aluminum cans are first).

ORGANIZATION AND STRUCTURE

The corrugated box market is about 80 percent integrated. This means that 80 percent of all containerboard (the linerboard facing and corrugated fluting that together make a corrugated box) is not sold on the open market. Instead, it is delivered from containerboard mills to corrugated box plants owned by or affiliated with the same organization.

The value of corrugated and solid fiber box shipments reflect both the economic activity of the products shipped in them and the prices paid for boxes, which are typically pegged to the price of raw materials. These raw material prices tend to fluctuate widely. The U.S. corrugated product box industry produced all-time records in volume shipments during the 1990s. In 1996 shipments reached a record 376.2 billion square feet (bsf) of finished...

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