- February 01, 2008, By Dr. William Llewellyn, AWA Alexander Watson Assoc.
Vacuum-coated papers and films are enjoying dynamic growth levels. Brand owners' demands for flexible packaging, label materials, cartons, and cigarette pack inner liner are driving technology enhancements, but these are not the only markets.
Vacuum-coated films often are used in a semi-converted form in the construction industry — in HVAC applications or as a component in solar control films for example. They also find extensive use in security holograms, in festive garlands and gift wrap, and in many textiles employing an element of heat retention — safety blankets, clothing, curtains, etc.
Overall, world demand for vacuum-coated materials is estimated at 690,200 tons. After Europe, Asia Pacific is the second largest producer of vacuum-coated products globally (see top figure).
The structure of the market for vacuum-coated papers and films is complex. It involves a variety of raw materials suppliers for papers, films, coatings, and other chemicals; vacuum coaters (including some that are materials-integrated or converter-integrated as well as commercial/toll coating companies); converters of all kinds in the fields of packaging, label printing, lamination, and product manufacture (e.g. tape); and end-users. This type of supply chain not unnaturally creates strong pressures on margins, profitability, and return on investment in today's business environment.
Globally, an estimated 400-plus companies are actively involved in the vacuum coating of papers, films, and board materials today. Global production is forecasted to increase at an annualized rate of 5% — 5.5% to 2012, with the majority of production in vacuum-coated film products (see bottom figure). Growth will embrace both clear and metallized coatings.
Capacity expansions continue as newer technologies are required to meet ever-higher demands for barrier and adhesion performance, as well as cost reductions. Old and obsolete vacuum coaters, particularly in North America and Europe, are being replaced.
Today, wide-width coaters in excess of 4 m are common for the conversion of commodity film products. Even specialty grades and papers employ coaters at 1,650 — 2,200 mm.
Packaging — The Largest Market
Packaging is the largest end-use market segment, with about 69% of materials usage (see figure on p32). Here the main drivers are the need for barrier performance for clear and opaque vacuum-coated films, coupled with the popular, high-impact esthetics of metallized films, particularly polypropylene (PP). Labels, taken separately from packaging, are also an important sector. They account for more than 19% of the total world volume of vacuum-coated materials and more than 61% of global volumes of metallized papers.
There are, however, some challenges to vacuum-metallizing technology in these markets in the form of alternative metallic finishes, including inks, which can compete on both cost and environmental grounds.
In metallized papers — all of which are coated with aluminum — functional barrier coatings have yet to be developed and commercialized. However, these papers are strong players in cigarette packaging and as label papers for beers, mineral waters, and carbonated soft drinks.
Strong growth is expected in vacuum-coated papers in the Asia Pacific region, where investment levels in production equipment have been high. With the emphasis increasingly on clear barrier coatings with microwave functionality and the development of in-chamber polymer and nano-coatings, vacuum coating remains a forward-looking industry with a strong future.
Metallized boards are produced mostly by transfer metallizing. Their end-use markets — snack packaging, confectionery, swing tags, labels, health and beauty products, etc. — represent a mature segment, with anticipated growth rates of 1% — 1.5%/yr.
As in many film-related markets, vacuum-coated films — predominantly PP — are experiencing considerable downgauging. This is to improve cost-competitiveness, extend the range of possible applications, and improve their environmental profile.
Developments in vacuum-coater technology incorporating plasma treatment have enhanced metal adhesion, barrier performance, and coating consistency. The production of clear oxide coatings and alternatives such as melamine vapor deposition is gaining momentum now.
Innovations & Future Outlook
Other major innovations are seen in the fields of water-based coatings and in broader functionalities and end uses for vacuum-coated textiles.
The vacuum-coated papers and films market experiences the same pressures as the broader converting markets — commoditization, consolidation, reduced margins, and competition from alternative materials and from lower-cost geographies. However, an increasing emphasis is expected on improved or additional material functionalities, as esthetic concerns become less important.
Higher-performance barrier films as replacements for aluminum foil currently are being investigated. As well, enhancements in process and production technologies will bring onstream new, higher-value and higher-margin products.
This is a strong, active sector of the converting market. It offers good opportunities for profitable business — not just in the world's new economies but in mature, established markets as well.
Dr. William Llewellyn is VP/senior consultant for AWA Alexander Watson Assoc., Amsterdam, Netherlands, a market research firm specializing in packaging and converting. Contact him at +31 (20) 676 20 60. AWA Alexander Watson Assoc. recently published the Vacuum Coated Papers and Films World Sourcebook 2007. For more information, visit www.awa-bv.com.