specialty papers 2014 webinar prequel

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What does the future hold for the specialty paper sector? Prequel to 2014 Specialty Paper Conference Webinar Dr GK Moore Smithers Pira

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Specialty Papers 2014 taking place September 16-18, 2014 in Milwaukee, WI has expert presenters like Graham Moore taking the stage. Moore, a Smithers Pira consultant will be available to chat in Milwaukee!

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Page 1: Specialty Papers 2014 Webinar Prequel

What does the future hold for the specialty paper sector?

Prequel to 2014 Specialty Paper ConferenceWebinar

Dr GK MooreSmithers Pira

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Agenda

• Definition

• Market overview

• Influence of key factors and trends on the sector

• Raw material use

• End use market opportunities

• Determining future prospects

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Definition

Specialty paper –

Paper or board that is manufactured, or subsequently converted, for a specific use. These grades usually cannot be used for anything else other than their intended special purpose.

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Market Overview

http://social.csptoday.com/files/csptoday/images/US_market_overview.jpg

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Global production of specialty papers by region

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Sum of TPY Queried Products by Machine

Asia Pacific 31%

Europe 42%

Latin America 3%

North America 23%

All Other 0%

Total = 14,771,731 FMT

© 2006-2013 Fisher International, Inc.Source: FisherSolve™

Europe accounts for 42% of global output

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Market share by company

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Sum of TPY Queried Products by MachineAhlstrom 3%APP 3%Arjowiggins 1%BillerudKorsnas 1%Delfort 2%Domtar 2%

Expera 4%

Glatfelter 2%Henan Jianghe 1%IP 2%

KapStone 3%

Kingdecor 1%

Koehler 3%

Kotkamills 1%Mitsubishi 2%Mondi 1%Munksjö 3%Oji Holdings 2%Qunxing 2%Schoeller Technocell 4%Shandong Huajin 1%UPM 2%

All Other 53%

Total = 14,771,731 FMT© 2006-2013 Fisher International, Inc.Source: FisherSolve™

No single company has more than 5% of the market

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Specialty paper machines are small

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0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

FM

T

0 - 25,000 25,000 - 50,000 50,000 - 75,000 75,000 - 100,000 100,000 - 125,000 125,000 - 150,000 150,000 - 175,000 200,000 - 225,000

TPY Queried Products by Machine, FMT

Asia Pacific

Europe

North America

Asia Pacific

Europe

North America

Europe

North America

North America

Europe

North AmericaNorth America

Europe

North America

© 2006-2013 Fisher International, Inc.Source: FisherSolve™

Most specialty machines make less than 50,000 tpa

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Influence of key factors and trends

http://www.masternewmedia.org/images/online-video-trends-tubemogul-brightcove-data_and_visualization_id71388.jpg

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Influencing factorsSpecialty sector, as with other paper and board areas, is affected by a number of ‘mega’ factors.

• Global economics – influencing business and consumer spend. Growth in speciality products in many developing economies, e.g. China linked to continued growth & wealth

• Consolidation – number of players reducing in developed economies through M&A

• Rise and rise of e-technology – technology substitution is reducing demand for printed products. Packaging products benefiting from technology derived enhancements and growth in on-line business

• Green related issues – paper based products benefitting from sustainability credentials. Fibre and product accreditation becoming the ‘norm’.

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Raw materials considerations

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http://www.irnase.csic.es/users/delrio/Web-project-ELLE/Project-ELLE.htm

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Principal materialsMajority products made from:

•Wood pulp – e.g. bleached kraft (softwood/hardwood); BCTMP; and conventional mineral fillers

•Ratios of pulps used will vary with end use requirements and geographic considerations

Where additional functionality required use can be made of:

•Alternative fibres to wood derived e.g. non wood and synthetic

•Alternative pigments

•Composites

•Nano based materials

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BCTMP – bleached chemithermomechanical pulp; PCW – post consumer waste

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Pulp Use by Type for Speciality Grades

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Sources: PPPC, Poyry & Brian McClay & Associates, Inc.

Global End Uses for Different Pulp Types, 2012, (estimated)

NBSK - Northern bleached softwood kraft; BEK – bleached eucalyptus kraft;BCTMP – bleached chemithermomechanical pulp

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Nanocellulose

Definition/characteristicsLightweight, flexible, concentrated plant matter derived from wood pulp used for• reinforcing •increasing absorbency

Technology demand drivers•Strength - stronger than steel and stiffer than Kevlar•Conducts electricity•Potentially cheaper alternative to glass, carbon fibre and existing absorbency mediums, kitchen towels, tampons, etc.•Very safe and green – potential alternative for petroleum-based plastics used in packaging.

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Nanocellulose

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Numerous research initiatives – examples include:

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NanocellulosePotential nanocellulose end uses.

• Aerospace & Automotive – e.g. lightweight construction• Biodegradable food packaging and lighterweight, stronger paper products• Consumer products - e.g. kitchen towels, tampons, etc• Electronics – e.g. flexible OLED displays • Food products –e.g. a low-calorie food thickener • Hygienic operational processes - e.g. water and energy hygiene• Medical devices and bio-medical products - e.g. implants, scaffolds in tissue

engineering, artificial skin and cartilage, wound healing and vessel substitutes • Military - e.g. lightweight armour

Caveats • Currently not proven that sufficient nanocellulose can be produced at low enough

cost to be genuine commercial alternative to established product materials• More research required to establish that total energy use for nanocellulose

production is truly green.

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Nanopigments• Synthetic silicate nanofibers/materials

- high surface area; high aspect ratio

• plus nanoclustered PCC

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Nanopigments

Commercial example:

Imerys has developed water-based barrier coatings using novel kaolins as part of the BARRISURF™ product line. These hyper-platy, nano-dimensional crystals create a tortuous path for moisture, oil, grease and oxygen transmission.

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End use markets

http://www.google.co.uk/imgres?imgurl=

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End use markets

End use markets associated with packaging provide opportunity……..

• Luxury packaging• Functional and barrier coated products• Active and intelligent products

……while those associated with graphic applications are declining….

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Luxury packaging

Luxury packaging defined as primary and secondary packaging used specifically for goods at the premium price end of consumer goods

Sectors include:• Confectionery • Luxury food • Luxury beverages (e.g. wines and spirits, coffee, tea, herbals and chocolate)• Fragrances, cosmetics and toiletries• High value consumer goods (e.g. jewellery, watches, clothing etc)• OTC* healthcare and ethical pharmaceutical products• Carrier bags• Tobacco

* OTC over the counter

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Luxury packaging

Packaging examples

– Folding cartons - e.g. solid bleached sulphate (SBS) and metallised polyester or silver board

– Gift-wrap– Floral wrap– Box wrap – Top end retail carrier bags– Microflute grades: F-, G-, N-, or O-flute (0.3mm)– Labels (e.g. specialty C1S, uncoated, wet glue and

pressure-sensitive)

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Functional and barrier paper

• Cover a broad spectrum of materials that are coated onto paper and board. Provide a barrier to protect materials inside and/or enable a substrate to act as suitable packaging

• Barriers are required for a variety of reasons including water and water vapour, oil and grease, oxygen, aroma, fire and corrosion inhibition

• Grease resistant barriers are now mainly used for food and pet food products and also for limited machinery packaging applications

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Performance comparison of different barrier systems

Polyolefin coatings High barrier coatings

Special barrier coatings Biopolymer coatings

Performance rating : 1 moderate; 2 good; 3 excellentSource: StoraEnso 23

Choice of coating will depend on barrier functionality required and cost considerations

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Material shiftsEnvironmental and sustainability concerns are providing impetus for development of alternative barrier systems for some of current products. In particular - extruded PE, aluminium foil, fluorochemicals,– have all been targeted for replacement •Replacement of PE by water based barrier coatings can enable paper value chain integration – using existing paper coating systems•Aluminium foil can hinder recovery of raw materials when recycled especially if combined with PE•Fluorochemicals environmental and health concerns driving search for alternatives. Examples include:-Alternative ‘natural’ systems being developed by Penfold (US) e.g. PenBlock-Dynaplak (NL) developed Krosflex®C types starch based emulsion developed for paper and paperboard barrier coating applications that require resistance to grease-Tate&Lyle (US) have patented starch-containing compositions for use in imparting oil or grease resistance to paper (US Patent 8017249) In addition there is Increased interest in the development and use of biobased systems e.g. development of PE from biobased raw materials

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Active and intelligent packaging

Based on a deliberate interaction of packaging with product and/or its direct environment to improve quality and safety

• Active modified atmosphere packaging (MAP) has largest market value share

• Intelligent freshness indicators and time temperature indicators (TTIs – usually labels) show fastest growth due to increasing packaged food, especially ready meals and frozen products

• Technologies include flavour and aroma release, gas scavengers, moisture and corrosion control, natural antimicrobials, self heating and cooling plus printed electronics, nanosensors and biosensors

• Food and beverage, personal care, healthcare, auto, electronic and primary metals sectors also utilizing active and intelligent technologies.

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Active and intelligent packagingPackaging development – key objectives

• Freshness, shelf life and monitoring

- controlling, ripening/extending shelf life (active packaging)

- monitoring product (intelligent packaging)

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Monitoring products

27See: http://www.vtt.fi/files/sites/eemeli14/06_alykas_pakkaus_Maijala_StoraEnso.pdf

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Active and intelligent packagingPackaging development – key objectives

• Freshness, shelf life and monitoring

- controlling, ripening/extending shelf life (active packaging)

- monitoring product (intelligent packaging)

• Optimising consumption

- consuming at correct temperature

- enhancing attributes of microwaved products

- releasing and mixing just before consumption

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Optimising consumption

UWI Label knows when jar has been opened for first time; shows how long it has been opened and tells when it has reached its “use within” period and when it may no longer safe to use or consume.Indicator panels in the label progressively turn green to show elapsed time from opening of a product and a red panel alerts consumers when “use within” period has expired.UWI Label time ranges can be set as hours, days, weeks, months up to a six month and is pre-set during manufacturing of the product.

Developed by Pete Higgins, in conjunction with scientists from Heriot-Watt University, in Edinburgh, Scotland,

Source: http://www.uwitechnology.com/blog/technology/

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Active and intelligent packagingPackaging development – key objectives

• Freshness, shelf life and monitoring

- controlling, ripening/extending shelf life (active packaging)

- monitoring product (intelligent packaging)

• Optimising consumption

- consuming at correct temperature

- enhancing attributes of microwaved products

- releasing and mixing just before consumption

• Improved consumer communication

- interactivity

- customisation

- multi-sensory

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Improved consumer communication

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The technology is application applied, meaning can be added to any picture, even one that has already been printed. Can also be programmed to allow the image to be scanned and viewed afterwards, rather than having to hold the device over the image.

Augmented Reality Enables digital images/content (e.g. product information or assembly instructions) triggered by a visual image to appear via a smart phone, webcam or tablet. There is talk of a standard symbol that displays the presence of AR on packaging.

“AR is still cutting edge stuff for consumers but many mainstream brands already participate in it. …The growth of smart phones and tablets, etc, has to happen and this will only increase adoption” Simon Jobling, Commercial Director of www. M2end.co.uk

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Determining future prospects

http://www.buzzle.com/img/articleImages/302356-21731-27.jpg

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Challenges….opportunitiesOpportunities…..challenges

• Wider challenges facing all in paper and board sector are focussing minds to look at other opportunities

• Opportunities exist in specialty paper sector…but those opportunities present their own challenges

• Aspects (market, operational, technical) require to be critically assessed and ranked to determine best front runners for a given mill.

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Summary

• European specialty paper sector remains largest. However many specialty paper mill suppliers and converters are increasingly international in their outlook and strategy

• Mergers and acquisitions will continue as some market sectors decline • Successful speciality mills maintain flexible production and cultivate strong relationships with converters who have most direct contact with end users

• Successful realisation of opportunities requires careful evaluation and assessment of a number of key factors

• Role of third party technology providers will increase.

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Thank you!!See you in Milwaukee!!

For further information please contact:

Dr Graham MooreSmithers PiraTel: +44 1372 802127Email: [email protected]