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Spotlight on the North American Market

Corey M. Reardon, principal of international consultants AWA Alexander Watson Assoc., takes a closer look at "local" market trends.

The North American market for release liners for all types of applications remains buoyant, with an annual growth rate of 3%-5% overall. Self-adhesive applications account for the major share — almost 90% of the total (see Figure 1).

Favored Substrates
North American converters and end-users favor calendered kraft liners over other types (see Figure 2). Polycoated papers and films each account for 11% of the overall market, while clay-coated papers take 10%.

Film release liners still have a relatively small market share overall — just 11%. Across all applications, polyethylene accounts for the largest usage at 53%, followed by polyester — for critical applications — at 30%, and polypropylene at 15%. However, today it is film liners that command more than 50% market share in the building and insulation market, which has a relatively high annual growth rate of 9% in North America.

Other markets that show positive growth trends are tapes (including envelopes) at 5%; label stock at 4%; applications in healthcare, medical disposables, and hygiene at 3.5%; and graphic arts applications (including covering films) at 2.1%.

Market Characteristics
In the North American release liner market as a whole, industry consolidation, acquisitions, and liquidations indicate that fewer coaters will account for a larger share of the release liner business — examples in recent years are the Lohjan/Rexam merger to form Loparex; Saint-Gobain's buyout of Furon; the closure of Fletcher Coated Products; and Douglas Hanson's acquisition of the Avery Dennison silicone coating operation in Ohio.

There is overcapacity in the industry: Capacity utilization rates at silicone coaters in North America are just 55% for in-house coaters and 65% for commercial coaters.

It appears the industry is showing the classic U-shaped curve, so characteristic of many industries today, where companies either become larger to realize economies of scale or remain small to serve niche markets. It is difficult to return reasonable profit margins as a “middle-ground” coating company. Industry players at all levels are experiencing strong competitive pressure.

Future Growth
AWA's research confirms growth in the major markets will come from new applications, so the emphasis for release liner producers and their customers must be on identifying new market niches and developing new, high-performance products to meet their needs.

With so much of North America's release liner business concentrated in pressure-sensitive label stock, this must be an intense focus for those release liner value chain players active in supplying this market — including the in-house coaters themselves.

Global Release Liner Conference 2004
AWA Alexander Watson Assoc. organizes, through AWA Conferences, industry-specific conferences on release liners in the US and Europe. Next year's Global Release Liner Conference will be held May 6-8 in Helsinki, Finland.

Market Data in this Report
All market data in this special report are sourced from currently available AWA studies, which include annual updates on the release liner markets in North America and Europe. New to the AWA report portfolio this fall is a major reference work for label industry players: Labeling Markets: North American Sourcebook 2003, which examines the North American market from an industry perspective and re-assesses the changing competitive and trading environment. This report complements the Labeling Markets: European Sourcebook published last year.

Full details of AWA reports and conferences are available via the Web site at awa-bv.com or contact AWA Alexander Watson Assoc., Koningin Wilhelminaplein 13, Tower 2, 9th Floor, Suite 9, P.O. Box 69035, 1060 CA Amsterdam, The Netherlands, ph: +31 20 676 2069, fax: +31 20 676 2375.


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