Numera Analytics Roman Hohol Vice President

Numera Analytics
Roman Hohol
Vice President
Prospects for High-Quality Packaging
in North America
Paul Leclair
Vice-President and Chief Economist
Numera Analytics
May 4, 2016
Vancouver
North American paperboard market at 12M t
North American paperboard market segments
% share of total in 2015
RB
50%
12M t
SUS
14%
Source: Numera Analytics
SBS
36%
Virgin grades growing slowly; RB declining
North American paperboard market segments
AAGR over three different periods
Source: Numera Analytics
Our focus today is SBS
North American SBS end-uses
NA Demand 2015
RB
50%
12M t
SUS
14%
Source: Numera Analytics
SBS
36%
% share of total
Our focus today is SBS
North American SBS end-uses
% share of total
NA Demand 2015
Other Food Service
Folding
SBS
36%
Cup
4.3M t
Liquid
Packaging
Source: Numera Analytics estimates
Breakdown of NA SBS folding market
NA SBS folding market by end-use
% share of total
Source: Numera Analytics estimates
What will the drivers be?
Currently, job creation is US strong point
US non-farm employment
Monthly change in ‘000s of workers
500
+2.1M
+2.1M
+2.3M
+3.0M
+2.7M
3M: +0.6M
2011
2012
2013
2014
2015
2016
300
100
- 100
Source: US Bureau of Labor Statistics
Persistently low oil prices freeing up cash
WTI oil prices
$ per barrel
140
120
100
80
60
40
20
0
00
Source: Bloomberg
02
04
06
08
10
12
14
16
Solid gains in disposable income
Real per capita disposable income
Thousands of 2009 US$, SAAR
40
2015: +2.6%
38
2014: +1.9%
36
34
32
06
Source: BEA
07
08
09
10
11
12
13
14
15
Americans are changing where they shop
US deflated sales by type of store
AAGR 2010-2015
Total Non-Auto Retail Sales
Food Stores
Department Stores
Discount Dept. Stores
Drug Stores
Home Improvement Stores
Warehouse Clubs & Superstores
e-Commerce & Mail Order
Traditional
”bricks & mortar”
-6% -4% -2% 0% 2% 4% 6% 8% 10%
Source: US Department of Commerce
e-Comm: 7.3% of total but growing rapidly
US e-commerce retail sales
US$B (L) and % of total (R)
400
12%
300
8%
200
4%
100
0
0%
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
Source: US Department of Commerce
How will this affect paperboard?