SIC 2652

Establishments in this industry manufacture setup (rigid) paperboard boxes from purchased paperboard. This classification includes setup paperboard boxes, paperboard filing boxes, and metal-edged newsboard boxes. These products differ from other paperboard boxes in that they are not folded down, like corrugated boxes, and are shipped to customers in their final form.

NAICS Code(s)

322213 (Setup Paperboard Box Manufacturing)

Setup paperboard box manufacturers comprise one of the smaller paper and board products industries. Sales have tended to increase and decrease sharply due to various market factors including economic conditions, inventory levels, and industry capacity. For example, the value of setup paperboard box product shipments grew a total of 18 percent over the 10 years from 1984 to 1994, from $466.1 million to $554.9 million. While the average annual growth rate over this period was 1.8 percent, the setup paperboard box industry's sales performance was uneven. For example, after rising to $552 million in 1986, sales dropped dramatically the next year, to $436 million, before rising to a peak of $565.1 million in 1990. With the pulp and paper industry in recession in the early 1990s, the value of shipments of setup paperboard boxes dropped to $430.3 million by 1993. By 1997, the value of shipments had recovered to $635 million, well above the 1990 peak of $565 million. After reaching a new record of $644 million in 1998, the value of shipments declined steadily for the next three years, reaching $544 million in 2001.

Since this is a small industry, some of the spikes in shipment values may be explained by changes in customers' inventory levels. If customers hold more product in inventory one year, they tend to purchase less the next year, even if their consumption rate is steady. However, an even more important factor is the price of the product, which tends to swing widely. The cost of materials rises and falls with the market price for paperboard, which during 1994 and 1995 rose as much as 50 percent before dropping in 1996. Paperboard costs remained relatively stable throughout the rest of the 1990s, not rising until 1999. Prices continued to increase into the early 2000s. These wide price swings help explain the volatility of the value of shipments in the setup paperboard box industry.

SIC 2652 Setup Paperboard Boxes

The production of setup paperboard boxes is concentrated in the eastern half of the United States, with the three largest production states being New York, New Jersey, and Pennsylvania. The other production area combined Northeast and the North Central states, including Wisconsin, Illinois, Ohio, Michigan, and Indiana.

Customers of the setup paperboard box industry are divided among several different product groups. In 2001, according to the Census Bureau, setup boxes used by department stores and other retailers account for 17 percent of the market, while those used for textiles, wearing apparel, and hosiery account for 12 percent. Setup boxes used for cosmetics (including soap) account for 10 percent, while candy products manufacturers use another 10 percent of the total. Setup paperboard boxes used for a wide variety of other products account for the remaining 51 percent of the market.

The value of shipments in the setup paperboard box industry was expected to remain flat throughout the early 2000s due to high paper prices. While this is a "mature" industry with little chance for exponential growth, it appears to be a stable one. Since setup paperboard boxes are, by definition, rigid packaging, they face little competition from alternative materials—such as plastic—that cannot provide rigidity without undue cost. Also, the ability to recycle setup paperboard boxes is seen as an environmental plus, and they can be made quite easily from recycled materials.

Most of the companies in this industry are smaller, "niche" manufacturers. Caraustar Industries, of Austell, Georgia, is the largest manufacturer in this industry, but it makes products in other industries as well. Other leaders in the setup paperboard box industry include Old Dominion Box Co., of Lynchburg, Virginia; Ward Paper Box Co.; Schiffenhaus Industries Inc., of Newark, New Jersey; and FN Burt Co., of Buffalo, New York.

In 2000 setup paperboard box plants employed 5,688 people nationwide with an annual payroll of about $148 million. Production workers accounted for 4,717 of that total and put in nine million hours for an average hourly wage of $9.15. Total employment in this industry has been trending downward for years. Total employment in 2000 was less than one-half of what it was in 1983 when the industry employed 12,300 people.

Further Reading

U.S. Census Bureau. "Statistics for Industry Groups and Industries: 2000." February 2002. Available from .

——. "Value of Shipment for Product Classes: 2001 and Earlier Years." December 2002. Available from .

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