Paper or Plastic?
- Published: December 01, 2009, By By Corey M. Reardon, AWA Alexander Watson Assoc.
Annually, AWA Conferences & Events holds its label release liner seminar prior to the Labelexpo shows in Brussels and Chicago. This year's seminar in Brussels drew a high delegate base from virtually every aspect of the value chain — a reflection, perhaps, of the label industry's focus on release liners and sustainability.
In this exclusive PFFC Special Report, we'll cover highlights of the release liner seminar, including sustainability and recycling issues. The dominant North American and developing South American markets will be compared, and we'll look at solutions to the rising cost of silicone used for coating.
The Global Label Release Liner Market
There were 31 billion sq m of release liner used in the label industry across the globe in 2008 — an impressive figure but one that AWA forecasts will grow less than 1% in 2009. Label stock applications represent more than 50% of the total market for release liner. While glassine and calendered krafts take more than 41% of the label release liner market, film liner's share today has grown considerably (see Figure 1).
Among the various types of label technologies, heat shrink sleeves have seen the fastest growth. In 2008, heat shrink sleeve labels grew 4% (see Figure 2).
Key trends affecting the release liner market are said to be the declining costs of materials; the need for shorter lead times; the crisis in the automotive industry; financial stability of companies in the supply chain; competitive decoration technologies, the reappearance of linerless pressure-sensitive labels; and the lack of industry innovation.
Sustainability Issues
Despite the many benefits that release liners confer on the conversion, application, and good looks of p-s labels, they remain at the center of controversy in the sustainability arena. Representing the European label association FINAT, Håkan Saxén, VP of R&D for UPM Raflatac, gave a balanced and forthright account of the p-s label industry's past achievements in the sustainability arena, the status quo and current issues, and the actions required to secure the industry's future.
He highlighted waste management as a critical item. But, he said, this is particularly a challenge because “everything we do in relation to the sustainability issue comes back to two defining and limiting factors: value and cost.”
An End-User's Liner Recycling Initiative
The end-user's viewpoint always is appreciated at label industry events. In Brussels, Dr. Krisztina Brodacs, environmental manager at Sara Lee Household and Body Care UK, shared her experience of setting up a liner recycling program for the company.
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Dr. Brodacs was methodical in her approach, researching the available governmental and industrial support bodies, as well as current recycling initiatives in the industry. From then on, she managed a succession of internal and external “roadblocks” before setting up, with Channeled Resources Group, a detailed program that involved not only practical implementation of liner recycling (currently achieved in India), but also communication throughout the organization to achieve continuing “buy in.” Today, the scheme is up and running but “it is not a panacea — there are issues to be ironed out,” she says.
Sara Lee is looking at a three-pronged approach for the future. In the short term, the company will continue with its current program of overseas recycling of used liner, but this raises its own carbon footprint issues. In the medium term, it is looking for a sustainable recycling route, but cost remains an issue. In the long term, it will consider a switch to easily recyclable PET liner or to linerless labels or other yet-to-be-identified options.
Label Industry Value Chain Initiatives
Citing paper as “the natural answer to the quest for sustainable materials,” Anna Maria Wessmann, VP, sustainability, for Ahlstrom, said release paper recycling is an “under-utilized opportunity for recovering high quality fibers.” She added, “Using exclusively white super-calendered paper would make recycling easier. It would also save in dyes and reduce energy in less required refining and calendering to achieve the right transparency.”
Both Avery Dennison and UPM Raflatac reported on sustainability initiatives in their respective companies. Avery Dennison introduced ultra-thin Fasson PET23 release liner, which brings to the “general-purpose” labeling arena both sustainability and cost savings, and announced a pilot PET liner collection/recycling scheme in Europe.
UPM Raflatac detailed its now commercially available UPM ProFi wood/plastic composite flooring and building material, which effectively recycles all the company's self-adhesive laminate production waste. It represents a significant new business opportunity for the company, using existing production technology from the plastics industry, and is currently in use in Europe for decking and other applications (furniture, building materials, etc.) in which hardwood would be the alternative.
But sustainability was not the only topic addressed at the AWA seminar.
Linerless Labels
Linerless labels, though they still do not present a serious threat to “traditional” linered self-adhesive, are playing an active role in identifiable end-use markets today, with attendant cost savings and opportunities for growth in the medium to long term. However, only very limited label shapes currently can be achieved; specialist application equipment incorporating a label separation device is required, and every print job on plain label stock must be printed, silicone coated, and adhesive coated prior to application.
Innovation in Adhesives
Henkel's John Young introduced examples of how the company is innovating — an alkali wash-off adhesive for glass bottles and a printable ultraviolet adhesive for leaflet labels, for example.
In-Line PET Liner Silicone Coating
While its market share is still small, PET liner is replacing super-calendered kraft (SCK), poly-coated kraft (PCK), and glassines, as well as other synthetics, and is ideal for clean room and pharmaceutical applications because it is debris-free. Mitsubishi Polyester Film discussed its in-line silicone coating process for PET film release liner.
“Do It Yourself” Label Stock Lamination
ETI Converting Equipment, it is claimed, will represent 1% of the siliconized liner market by the end of the year with its in-house inerting chamber in-line free-radical siliconization, adhesive coating, and lamination equipment. François Bayzelon, ETI's president, outlined its advantages, which include, he said, significant cost savings in terms of process waste over traditional self-adhesive laminates.
A beneficial and informative agenda ended with cocktails around the tabletop exhibition, courtesy of the seminar's platinum sponsors, Ahlstrom, Cham Paper Group, and UPM.
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Corey M. Reardon is president and CEO of AWA Alexander Watson Assoc., Amsterdam, Netherlands, a market research film that specializes in monitoring the coating, laminating, metallizing, label, and packaging markets around the globe. The company publishes regular in-depth market reports and organizes related industry conferences, seminars, and other events. For more information, visit www.awa-bv.com.
Dominant, Declining
While North America dominates the market for release liner, the economic downturn has taken a toll on the business.
World demand in 2008 for release liner was 31,361 million sq m. North America continued to dominate world demand, accounting for 35.1%, or 11,001 million sq m of the total; and in 2008, North America and Europe together made up 65.8% of the world market (see 2008 Worldwide Market for Release Liners by Region p27).
Pressure-sensitive applications, by far, account for the largest share of the release liner market in North America, with 10,276 million sq m or 93.4% of the total. The largest p-s market in North America, as it is globally, is for label stock applications, which represent 49.0% of North American release liner usage.
The North American release liner market is dominated by calendered krafts, accounting for 44.0% of all materials used (see pie chart at right). Although 2008 was relatively stable overall, film usage for p-s liners continued to grow, replacing papers in label stock applications and other niche opportunities. While film now represents 20%, it is important to note the broad span of market segments in which film liner is used. Films, for example, still account for a high percentage of release liner used in the industrial market.
Industry's Changing Face
Industry consolidation, acquisitions, and liquidations continued over the past few years, resulting in fewer coaters — each with a larger share of the release liner business. For the first three quarters of 2008, release liner capacity utilization rate was relatively strong compared to previous years — about 70% for commercial silicone coaters and 60% for in-house silicone coaters. The global financial downturn greatly reduced capacity utilization in the fourth quarter, both for commercial and in-house silicone coating.
Since 2005, the major end-use segments have remained relatively strong with small, yet steady growth rates. Indications were for continuation of that growth for 2008. By mid-year, however, the effect of the financial downturn in the construction industry, the automotive industry and, indeed, in the overall economy began to take its toll. In the end, 2008 showed a decline of 8% over 2007.
Market shifts are reshaping the release liner business, and along with more intense competition, it will require increased emphasis on marketing and competitive positioning to maintain profitability. Three major topics are considered critical for the release liner industry to address: its image, particularly in relation to waste management concerns; the cost/performance ratio and how to optimize it; and the threat of competitive technologies that do not involve release liner.
Developing, Dynamic
Vibrant opportunities are forecast for the South American market as high growth is expected in all key market segments.
Like Asia, South America represents an area of high growth opportunities due to its combination of demographic factors and the dynamic nature of some of its economies — particularly Brazil, Argentina, and Chile.
Pressure-Sensitive Applications Dominate
In 2008, total South American demand for release liners was 1,475 million sq m — nearly all of it in p-s applications. Of these, p-s label stocks are the largest sector, accounting for more than 60% of the market in 2008.
Paper Versus Film Liner
Glassine release liners take the majority share of release base materials employed. They account for nearly 50% of consumption, followed by other paper grades such as clay coated (see table below).
Most release base paper manufacturers in South America are located in Brazil. They not only supply their domestic market but also export to other South American countries.
Film liners, as elsewhere, continue to gain market share and now represent more than 10% of the market, with PET the favorite for label stock. Although there are some reliable regional film suppliers, for economic and technical reasons, most film for release liner applications (as well as film release liners) are imported from other regions.
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Graphic Arts, Hygiene, Tapes
In p-s graphics applications, computer sign-cutting continues to be the dominant converting technology, but wide-format inkjet is growing fast. Clay-coated liner is preferred in this market. The hygiene market now represents the third-largest outlet for release liner in South America, offering particular opportunities for growth in film liner, particular polyethylene and polyproplyene. Specialty linered p-s tapes are also a growth segment, estimated to advance by 3.3% in 2009.
In-House Versus Commercial Siliconization
In South America, 85% of the total silicone release liner produced was in-house silicone coated by adhesive coating companies, with 15% produced by commercial silicone coating companies. However, there is some overlap in this developing market, as some big in-house siliconizers offer some free capacity to the open market, acting partly as commercial siliconizers. The region additionally imports and exports release liner.
Solventless silicone systems hold a 72% market share, and this percentage is expected to grow as new, faster coating lines come on-line and as environmental pressures curb usage of solvents (see pie chart below). Capacity usage is currently at 60%. However, these new, faster lines, such as that of Ritrama (Chile) — which started up at the end of 2008, as well as those planned for 2009-2010 — a second Flexcoat (Brazil) line, and the line at Arconvert-Gafor (Brazil) will require time and much effort to fill in the short- to medium-term.
In these early years of the development of stable market economies, South America as a whole already has seen significant growth and consolidation. But this is just a beginning. From this base, AWA expects to report ongoing dynamic opportunities in all the key end-use market segments for release liner — opportunities that compensate for stagnating volume expansion in North America and Europe.
2008 Summary of South American Release Liner Market
| Markets | Calendered Kraft* | Clay-Coated Paper | Poly-Coated Paper | Other Papers** | Film | Total | % |
|---|---|---|---|---|---|---|---|
| Label Stock | 620 | 110 | 50 | 60 | 50 | 890 | 60.4 |
| Graphic Arts | 50 | 120 | 30 | 0 | 50 | 250 | 16.9 |
| Tapes | 15 | 5 | 0 | 0 | 10 | 30 | 2.0 |
| Hygiene | 22 | 20 | 0 | 120 | 25 | 187 | 12.7 |
| Medical | 10 | 10 | 0 | 3 | 5 | 28 | 1.9 |
| Industrial | 5 | 5 | 10 | 2 | 2 | 24 | 1.6 |
| Envelopes | 2 | 2 | 10 | 0 | 2 | 16 | 1.1 |
| Others*** | 6 | 3 | 20 | 15 | 6 | 50 | 3.4 |
| Total | 730 | 275 | 120 | 200 | 150 | 1,475 | 100.0 |
| % | 49.5 | 18.6 | 8.1 | 13.6 | 10.2 | 100.0 | 100.0 |
Million Square Meters
* Glassines/Super-Calendered Kraft.
** Machine Glazed/Machine Finished Grades.
*** Including Non-Pressure-Sensitive Adhesive Applications.
Want to Learn More?
AWA Alexander Watson Assoc. publishes regular reviews of the release liner market around the world. Recent market reports include the following:
- North American Release Liner Outlook 2009
- South American Release Liner Outlook 2009
- AWA Release Liner Markets Global Review 2009
The next AWA Label Release Liner Industry Seminar will be held in Chicago, IL, in September 2010, and the full AWA Global Release Liner Industry Conference 2010 will take place Mar. 29-30, 2010, in Amsterdam, Netherlands.
Silicone Coating
The silicone formulation is a critical component of release liner, delivering a combination of release properties, water repellency, temperature resistance, and many other special functions for the main market, self-adhesive label stock. It is estimated that, in 2008, worldwide consumption of silicone release coating was in the region of 33,658 dry tonnes. Within this volume, solventless silicone systems continue to dominate, with 68% of the total market.
Silicone coating weight varies by technology, the base material being coated, and the demands of the application. In general, solvent-based silicones use the lowest coating weight — ranging from 0.4 gm2 on films to 1.0 gm2 on paper, while solventless and emulsion silicones are coated in the range of 0.8-1.2 gm2 on the same substrates.
Faced with rising raw material costs, release liner producers are working with customers to develop solutions that not only reduce the cost of silicone used but also the total cost of the liner. Initiatives include the development of more reactive silicone polymers to allow a reduction in platinum catalyst costs; release coating reformulation to allow the use of lower-quality base materials without loss in silicone performance; and the development of anti-misting formulations for high-speed coating.
