SIC 2676 Sanitary Paper Products
SIC 2676
This classification covers establishments primarily engaged in manufacturing sanitary paper products from purchased paper, such as facial tissues and handkerchiefs, table napkins, toilet paper, paper towels, disposable diapers, and sanitary napkins and tampons.
322291
Sanitary Paper Product Manufacturing
The sanitary paper products industry manufactures paper into finished products with sanitary applications. There are three broad subcategories within the sanitary paper products industry: disposable diapers was the largest segment, sanitary tissue paper products was second, and sanitary napkins and tampons comprised the third category. Other industry products include adult incontinence products and baby wipes. According to U.S. Census Bureau, shipment values in the sanitary paper industry were approximately $8.4 billion in 2005.
Many of the products within this classification are considered nondiscretionary and, as a result, sales within this classification have followed different business cycles than those of more commodity-oriented paper lines. Although new sanitary products, such as adult incontinence products, have helped to expand the market, this industry tends to grow only as fast as overall gross domestic product.
As in many mature markets, competition for customers is fierce. Tissue manufacturers, for example, continually seek to lower production costs because small gains can lead to major gains in either profit margins or market share. Since a large majority of the products contained in this classification are branded consumer products sold in many different retail outlets, the sanitary paper industry spends more on advertising than any other part of the paper industry.
In order to maintain growth, firms have begun to focus on expansion abroad, while at the same time continuing to segment the market and introduce new products domestically. Production of sanitary paper products is one of the few areas of the paper industry where major global corporations—notably Kimberly-Clark Corporation and The Procter & Gamble Company—operate manufacturing facilities in many locations around the world.
Most of the major companies in the sanitary paper products industry are integrated, in that they produce the raw materials for finished products, such as parent rolls of tissue at large paper mills, as well as the converted sanitary paper products, such as packages of bathroom tissue.
The majority of sanitary paper products are made from pulp or paper, although a significant percentage are made using the "nonwoven" process, in which natural or synthetic fibers are bonded together by cohesion, friction, or adhesion. Sanitary paper products are usually divided into two sectors: consumer or commercial and industrial (C&I). Customers in the C&I category of sanitary paper might be schools, hospitals, or offices.
Sanitary tissue products represent the second largest segment of this industry, after disposable diapers. It is divided into several subcategories. The largest of these is retail toilet tissue, which accounts for about a third of all sanitary tissue product shipments (by value). Other segments include retail paper towels, industrial paper towels, facial tissues, industrial paper napkins (hand towels), and retail paper napkins.
The processes used to make sanitary tissue products are very similar to those used to create other types of paper. In the standard papermaking process, wood fibers are stripped from wood chips in either a chemical or mechanical process to produce wood pulp. This pulp, a combination of wood fibers and water, is then spread on a continuous fine screen. The resulting mat is then passed over vacuum boxes to remove some water, and run through successive drying and pressing processes until the finished paper product is achieved.
The major differences between general paper manufacture and tissue manufacture lie in the type of raw material used and the converting processes. Because of the relationship between the softness of the raw material and the softness of the final product, lightly refined softwood fibers are generally preferred for consumer-oriented products. These fibers come both from virgin fiber (wood) and from recycled fiber. In fact, the sanitary tissue products industry is one of the largest recycling industries in the United States. The majority of all U.S. tissue is produced with fiber from purchased wastepaper (recycled paper). The remaining fiber is either produced from purchased virgin pulp or produced on site at integrated pulp and paper mills. Products for the C&I market typically place a higher premium on strength as opposed to softness, and are made from recycled paper or coarser grades of wood.
Once the tissue paper is formed, large, integrated producers typically convert it into consumer products on-site. (Smaller, nonintegrated converting operations purchase "jumbo rolls" of tissue paper on the open market.) Depending on the type of product, dyes and perfumes may be added and the paper may be embossed. The tissue is then prepared for market—facial tissues are folded and boxed, and bathroom tissue is rolled and prepared for shipment.
The nonwoven sanitary paper market consists of products that incorporate nonwoven fabrics in their manufacture. Nonwoven products include disposable diapers and training pants, feminine hygiene products, adult incontinence products (including consumer and institutional adult pads and bed pads), and premoistened tissues (including baby wipes). Advances in nonwoven technology have increased the number of nonwoven applications and enhanced the use of nonwovens in existing applications.
Nonwovens are so named because the fibers (synthetic or wood pulp) used in their fabrication are bonded together instead of woven, as they would be in textile-type products. This bonding can take the form of an adhesive applied to the fiber mat before or after forming, or it can be the result of a chemical reaction. The typical nonwoven product incorporates many steps into its fabrication. A diaper, for example, will begin with a polyethylene outer shell. Dry formed wood pulp (fluff pulp) within layers of impervious nonwoven fabric is bonded to the shell. Glues, resins, and adhesives are used to bind the various components to one another. The typical adult incontinence pad, sanitary napkin, and tampon incorporate many of the same steps into their manufacture.
In the manufacturing process, nonwovens are often treated with super-absorbent polymers (SAPs) which can absorb as much as seventy to eighty times their weight in liquid. A further distinguishing feature of SAPs is that, unlike a sponge or other woven absorbent products, SAPs retain water even when squeezed. A sponge, for example, retains water in channels or pores. SAPs chemically bind with the fluid to form a gel. Under extremely heavy pressure, SAPs might release a type of gel, but most liquids remain in their chemical compound.
Aside from sanitary applications, nonwovens also can be found in other applications, either as a substitute for cloth or in applications requiring a high degree of absorbency (filters, car covers, durable shop towels). Because most producers of nonwoven sanitary products also produce nonwoven fabrics, the strength of these related industries can impact these companies' results.
After the final product is ready, the process moves from manufacturing to marketing. The need to market effectively drives two additional defining features of the industry. First, there is the need for extensive promotion: companies within the sanitary paper industry spend the highest percentage on advertising of any paper-producing industry. Second, companies also have recognized the need for sophisticated marketing techniques. Important success factors in the industry include increased segmentation and "database marketing," which uses elaborate information banks to determine lifestyle predictors for a target segment.
Unlike other grades of paper, many sanitary paper...
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