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McKinley Packaging Chooses Texas: Lancaster Plant Expansion Underway

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Archives, Global Trade Daily, Site Selection

McKinley Packaging Chooses Texas: Lancaster Plant Expansion Underway

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McKinley Packaging, a sustainably operated paper and packaging company, announced the addition of its seventh packaging plant. The 500,000 square-foot rail-served building in Lancaster, Texas will create 100 jobs in total when running at full capacity across three shifts, Monday through Friday.

“We started looking at properties back in July 2020 and decided, as a company, that Lancaster is a market we want to grow in,” explains Anthony Garcia, Vice President of Operations at McKinley Packaging.

The Lancaster expansion marks another significant milestone for the Bio Pappel subsidiary. Known as the largest manufacturer of paper and corrugated materials in Latin America, Bio Pappel launched expansion efforts in the United States seven years ago. Since then, McKinley Packaging has represented the company’s strategic growth success with its now seven plants, two paper mills, and five recycling centers across the U.S. markets.

Efforts to locate the ideal market for McKinley’s seventh packaging plant were spearheaded by Global Site Location Industries (GSLI), a Dallas-based site selection consultant and economic development marketing agency.

“GSLI’s process provided us with the opportunity to truly evaluate multiple markets that had the potential to support our company strategies, helping us identify the right location first,” Garcia adds. “In addition, GSLI was very valuable in helping us review incentive packages and navigating the negotiation process. The team providing insight on how different incentives compared across different communities as we determined location.”

Driven by its emphasis on sustainable operations and recycled materials, McKinley Packaging continues to aim for zero-discharge water operations upon reaching capacity. This is one example of how McKinley Packaging continues the “green” legacy of the company’s history.

“Mckinley Packaging has been great to assist in the finalization of their site and incentives,” adds Eric Kleinsorge, GSLI’s CEO and Chairman. “Lancaster wasn’t a “first-thought” choice, but after conducting our Road Show Tour and analysis they were definitely the right choice. Shane Shepard and his Lancaster Team were excellent and responsive when working with the city. This made a big impact for McKinley. We look forward to working with them on future expansions and are excited about the breaking ground of this new facility!”

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About McKinley Packaging

McKinley Packaging is a world-class integrated paper and packaging company that is GREEN.

We operate two state-of-the-art businesses in the United States: Our first division is McKinley Paper, which has two paper-producing facilities in New Mexico and Washington. Our second division is McKinley Packaging, with facilities in California, Georgia, Indiana, and Baja California, Mexico.  McKinley Company is part of Bio Pappel which is the largest manufacturer of paper and paper products in Mexico and Latin America.

About Global Site Location Industries, GSLI

Global Site Location Industries, LLC (formerly known as the World Economic Development Alliance) is a site location firm founded in 1994. GSLI has helped over 1,200 companies identify economic development professionals that could assist them with their site location decisions. We have over 75 site location expert offices nationwide. We use Project Qualification Team to conduct our initial interviews with companies to identify the viability of a project. The balance of our staff is customer service, project managers, production, web designers, and finance.

For More information visit www.gslisolutions.com or contact info@gslisolutions.com

paper packaging
Archives, Global Trade Daily, News

Rising Paper Packaging Demand to Mitigate Adverse Pandemic Impact on the Global Pulp Market

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Because of the pandemic-related shifts in downstream industries, pulp manufacturers are forced to adjust their market strategies towards the rapid increase in packaging paper use. In the medium term, value chain sustainability emerges as the most important factor due to the tightening of environmental regulation.

According to a new report by IndexBox, the global wood pulp market is estimated at $132.7B. Chemical wood pulp (148M tonnes) constituted the product with the highest consumption, accounting for 77% of the total volume. Moreover, chemical wood pulp exceeded the figures recorded for the second-largest type, mechanical wood pulp (24M tonnes), sixfold. Semi-chemical wood pulp (11M tonnes) ranked third, with a 5.9% share.

The COVID crisis became an ordeal for the paper industry. A decline in the demand for printing and writing paper due to the digital transformation has intensified further because exhibitions, conferences, advertising, and education migrated online during the pandemic.

Considering a significant part of the population started to work from home, and cloud technologies became a must-have tool, it leaves no chances for a considerable printing paper market growth even after overcoming the COVID crisis.

In contrast to the decline in the demand for paper supplies for offices, schools, and restaurants in 2020, the demand for paper for households’ needs – toilet paper, napkins – soared in 2020. During the pandemic, the surge in e-commerce has pushed plants producing corrugated boards and paper packaging to operate at full capacity. The lack of supply of cardboard packaging has led to higher prices for cardboard in 2020. Pulp producers are set to adjust their market strategies to the paper and paperboard mill industries’ shifts.

While Paper Packaging Segment Drives Market Growth, Supply Chain Sustainability Becomes Vital

The countries with the highest volumes of wood pulp consumption in 2019 were the U.S. (51M tonnes), China (39M tonnes), and Japan (10M tonnes), together accounting for 52% of global consumption. These countries were followed by Canada, Sweden, Russia, Finland, Brazil, Germany, India, Indonesia, Italy, and France, which accounted for a further 31%.

From 2012 to 2019, the most notable rate of growth in terms of wood pulp demand, amongst the leading consuming countries, was attained by India (with a CAGR of +6.2%), China (+6.1%), and Russia (+4.1%), while wood pulp consumption for the other global leaders experienced more modest or even slightly negative paces of growth.

In the medium term, the demand for paper packaging is expected to grow steadily worldwide, given that paper is an environmentally friendly, biodegradable, and recyclable material. This is facilitated by adopting new legislation in the EU and other countries, the US re-entering the Paris Agreement, and the intensification of international efforts to preserve the climate.

According to the EU packaging-related regulation, by 2030, at least 85% by weight of all paper and cardboard packaging waste must be recycled. In 2019, in the EU, the share of secondary raw materials in paper production was 49%, while the share of wood pulp was 41%. This makes the paper value chain‘s sustainability the key factor for the industry in the future, meaning the increased use of recycled raw materials and decreasing energy consumption.

China to Remain the Major Importer of Wood Pulp

Global wood pulp imports stood at 64M tonnes in 2019. In value terms, wood pulp imports reached $45.4B (IndexBox estimates) in 2019. In March 2020, the lockdown led to a sharp drop in global imports of wood pulp by 10% in physical terms compared to April 2020, which was 30% lower than in March 2019. By May 2020, it dropped deeper, amounting to only 60% against May 2019. Afterward, there was a recovery attempt, but during 2020 global pulp imports failed to regain 2019 levels, largely attributed to reduced global printing paper use.

In 2019, China (24M tonnes) represented the major importer of wood pulp, constituting 37% of total imports. From 2012 to 2019, the average annual growth rates concerning wood pulp imports into China stood at +5.9%. At the same time, India (+9.4%), Turkey (+6.5%), Poland (+6.3%), Spain (+3.4%), Indonesia (+1.7%), the Netherlands (+1.6%), the U.S. (+1.5%) and Italy (+1.3%) displayed positive paces of growth.

India emerged as the fastest-growing importer imported globally, with a CAGR of +9.4% from 2012-2019. Germany, Japan, and South Korea experienced a relatively flat trend pattern. By contrast, France (-2.0%) illustrated a downward trend over the same period. In 2020, China should maintain its leading position in terms of imports because rapid urbanization and income growth promote packaging and household paper use in the country.

In value terms, China ($18.8B) constitutes the largest market for imported wood pulp worldwide, comprising 41% of global imports. The second position in the ranking was occupied by the U.S. ($3.3B), with a 7.2% share of global imports. It was followed by Germany, with a 6.5% share.

Source: IndexBox AI Platform