How to Start a Cardboard Box Manufacturing Business?

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If you are planning to start a cardboard manufacturing business, this article will give you all the necessary details from machinery to legal permissions. Cardboard or cardboard box manufacturing business is a profitable business in the USA, especially with the ever-increasing e-commerce stores. We will cover from basics such as market potential and stats to marketing your brand.

Cardboard boxes come under the packaging solution business segment and manufacturers produce a variety of products and boxes in various shapes and sizes to meets today’s market demands. This business doesn’t demand any educational background but needs proper planning, investment, and networking skill. Moreover, it’s a B2B business, so, you should be able to produce a large number of boxes to meet large orders from businesses.

Starting a Cardboard Box Manufacturing Business

The potential for cardboard box manufacturing is huge; nearly all industries need some time of cardboard packaging and the booming e-commerce industry is probably the biggest buyers of cardboard boxes. The e-commerce industry is growing and will most likely continue for the next decade, so if you are planning for a cardboard box manufacturing business, you should be good for the next few decades and if the marketing is right, you could be a big player in the industry.

Major segments who use cardboard boxes:

  1. Food and beverage
  2. Electronic Goods
  3. Household appliances
  4. Cosmetics
  5. Glassware and ceramics
  6. Footwear
  7. Automobile parts
  8. Industrial parts
  9. Chemical industry
  10. Textile
  11. Tobacco

Etc.

Licenses and Permissions for Cardboard Box Making Business

For starting any business in the USA, you have to pass through a lot of regulations starting from trade license to operate to pollution control. Moreover, there are permits and insurances. We suggest you register your company as a limited liability company and select a business name that best reflects your core values.

Check Up with the USA manufacturing regulation to know more about the legalities. In short, you have to follow the Air Pollution Prevention and Control Act, standards and regulation and even food-related regulations if you are producing boxes for the food industry.

Machinery and Equipment for Cardboard Box Manufacturing

First of all, you will need to have a covered area; if you are starting a small-scale production, you will need at least a 2000 sq ft covered area. Next, you have to procure machinery, which will vary depending on the type of box you want to manufacture.

Here is a common list of machinery:

  1. Face Paper Corrugation Machine
  2. Board Cutters
  3. Sheet Cutters
  4. Pasting Machine – Sheet
  5. Pressing Machine – Sheet
  6. Rotary Cutting and Creasing Machine
  7. Eccentric Slotter Machine
  8. Stitching Machines.
  9. Pressing machine
  10. Flexo Printing Machine
  11. Variable frequency drive
  12. Generator set

etc.

Raw Materials for Cardboard Box Making

The first process in the manufacturing of cardboard box including process the raw materials. It starts by pulping wood chips using a kraft process; the preferred tree for the kraft paper is a pine tree. Once it is harvested, the lot goes through a sulfate process and then they are broken down to a pulp.

Here is a lit of raw materials used in cardboard making:

  1. Kraft Paper
  2. Corn Starch
  3. Glue
  4. Wax
  5. Paraffin Water
  6. Stitching wire
  7. Inks

Cardboard Box Making Process

Here is a step by step process of how cardboard boxes are manufactured:

  1. First, a machine rolls out recycled paper or kraft paper which will be used to create the flute or the wavy sheet of the corrugated cardboard. The wavy sheet sits between two flat kraft sheets called liners.
  2. The paper goes through a couple of rollers called the corrugator, where hot steam is sprayed on the board whereas the roller glues one side of the flute.
  3. Next, a machine glues two liner sheets on both sides of the corrugated layer.
  4. Then the cardboard is cut on each side by a circular saw
  5. The corrugator machine cuts each board a number of times, depending on the size of the box.
  6. The machine then separates the boards into layers using aluminum tongs.
  7. Next, a machine stacks the boards and feeds the trimmer at nearly 7000 boards per hour.
  8. The trimmer cuts the cardboard in precision to make flaps and handles.
  9. The rubber blades make sure the trimmers don’t deviate from the operation.
  10. The boxes are processed at around 100 boxes per minute, whereas the cut off papers are sent for recycling.
  11. Then a bending machine folds the boxes along the crease made by the corrugator, at the same time applying glue. Next, another machine folds the glued sections to make a box.
  12. Next, the boxes are piled up and shipped to the suppliers.
  13. Optionally, the manufacturer may add markings and symbols based on the box’s strength and capacity.
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During the gluing process of the sheets, a multiple layers of liner paper and corrugated sheet are pressed to make double-wall or triple-wall cardboard. You can produce other types of boxes such as carton box, cardboard box, printed box, export quality corrugated cardboard box etc.

Project Cost and Investment

Fixed Capital – All machines

  1. Face Paper Corrugation Machine
  2. Board Cutters
  3. Sheet Cutters
  4. Pasting Machine – Sheet
  5. Pressing Machine – Sheet
  6. Rotary Cutting and Creasing Machine
  7. Eccentric Slotter Machine
  8. Stitching Machines.
  9. Pressing machine
  10. Flexo Printing Machine
  11. Variable frequency drive
  12. Generator set

Working Capital

  1. Land Rent
  2. Managers
  3. Skilled workers
  4. Security
  5. Maintenance workers

Raw Material

  1. Kraft paper

Utilities

  1. Power
  2. Water

Other expenses

  1. Transportation
  2. Ads and Marketing
  3. Repairs and maintenance

Manufacturing Factors That Affect the Quality of Produced Box

Grain direction of the paperboard – Right grain direction will enable easy printing, automated gluing, reduce bulge, and reduce shrinkage.

Printing – For proper printing, you should consider the flatness of the board, its dimensional stability, ZD-strength, and dust-free board.

Pre-press operation – It includes creating a design concept, typesetting, electronic rendering of artwork, color separation, and artwork proofing.

Box printing – Some commonly used printing method for cardboard boxes include:

  • Offset Lithography
  • Flexography
  • Rotogravure
  • Screen printing
  • Digital printing
  • Inkjet
  • Electrophotography

Other Converting Processes

  • De-curling
  • The sheeting of offset press and die-cutting
  • Die cutting includes: cutting, creasing, cut score, reverse cut score, perforation, embossing, debossing
  • Finish includes: windowing and metal edge application

Different types of rule

  • Knives
  • Score
  • Relief
  • Perforation

Types of cuts and creases

  • 100% cut
  • Score
  • Cut 5 Crease
  • Perf
  • Perfin channel
  • Scalloped
  • Tear strip

Creasability and Folding

  • The paperboard must delaminate to create a good crease
  • A good score will enable the cardboard to fold without cracking the top ply
  • It should produce the right carton shape
  • Should be able to produce creative design shapes
  • Facilitate package line efficiency
  • Have the right compression strength and stacking strength

Folding and Gluing

Process Steps

  • Pre-folding
  • Adhesive application
  • Folding
  • Sealing
  • Curing

Other parameters

  • Open time
  • Closing time
  • Pressure
  • Amount of glue
  • Temperature
  • Speed of gluing

Market Analysis of Cardboard Box

The cardboard box manufacturing industry is the largest paper-converting industry in the USA. Over the last 5 years, the industry has reached a total revenue of $70 billion globally, with a growth rate of 0.8% per year. Today, there are nearly 2000 cardboard box manufacturers with industry employment of 140K.

This industry is one of the significant consumers of paperboard, producing boxes and cartons for nearly all types of industry in the market. Even with the volatile price of the wood pulp, the price of cardboard box remains relatively same.

Nearly 81% of the packaging in any industry is done using corrugated cardboard boxes and has the biggest market share in e-commerce, logistics, cosmetics, pharmaceuticals, and footwear industry.

Being a B2B business, you will have permanent customers who will need boxes on a regular basis. Most common types of boxes in demand include mono cartons, standard box, large box, boxes in 2,3,5,7, ply.

If you are a small-scale business you will have to produce nearly 4 – 5 ton per day. For large industrial-scale businesses, you will have to produce 20 – 50 ton per day. A semi-automatic cardboard box producing machine will cost your roughly $ 120,000, whereas full-scale production plan will cost you $ 180,000.

Global Cardboard Box Market

USA – 34.39%
Europe – 33.94%
Asia – 31.67%

All Cardboard and Carton Box Market

Global demand for cardboard boxes is ever increasing with nearly 60% of all paperboard packaging products being used in the food segment including beverages, dairy products, dry foods, frozen foods etc. The paperboard and cardboard industry demand been relatively stable for the past 5 years. The North American industry shipped over 5 million tons of packaging with an average value per ton to be $1700, which is nearly the same as 2015. However, the dollar value of the shipments has dropped marginally from $8.7 billion to $8.5. The PPC (Paperboard Packaging Council) predicts that by 2020 the sales are expected to increase at a rate of 0.3% and 0.5% in tons.

RISI estimates that the carton shipments will increase at a rate of 0.4% annually over the next 5 years with the total value to be over $10 billion in 2021. The average value per ton is predicted to increase at 1.9% per year.

On the other hand, PPC warns that increasing raw material prices may impact adversely, although marginally. Till 2018, paperboard cost rose at a rate of 3% per annum. Due to increasing production in Europe and China, cardboard prices in the USA dropped marginally. Market share has declined by 30% over the past 15 years due to the consolidation of companies.

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Other research companies state that the value of global carton board market has already passed the $120 billion mark till now with over 50 million tons of material consumption in the carton and mini flute packaging applications. It is estimated that by 2022, the global carton board packaging will increase by 4% annually, which will create a global market value of over $130 billion in 2022.

Corrugated Cardboard Box Market

Since the crash of 2008, the corrugated cardboard box market has increased steadily. For 2018-19, the stats reveal that the industry is expected to grow both in size and value of the shipments. By now, the corrugated industry shipments have totaled for more than 500 billion square feet and is 3% more than the previous year.

At the same time, the value of shipments has increased to nearly $40 billion, which has increased by 1% over that last year. For sure, the corrugated market can always rely upon the fact that the breakdown of shipment from plants or production facilities versus the sheet plants or converters remains unchanged. More than 80 percent of shipments come from the corrugator plants and nearly 20 percent of shipments come from sheet plants or converter plants. Along with the volume and value of the boxes, the productivity has also increased due to the increased efficiency of corrugator machines. In 2018 an average plant produced around 1500 million square feet of combined board. On one hand, there is an increase in productivity but the average basis weight of the corrugated board has declined marginally.

Single walled corrugated board

The most dominant player in the industry is the single-wall corrugated board which accounts for over 90 percent of all production. Corrugator plants consume nearly 35 million tons of containerboard to produce a combined board.

On one hand the consolidation in the industry has increased, thereby decreasing the number of plants; on the other hand, workforce and employment in the corrugated industry have increased significantly. Today, there are over 140,000 workers in the corrugated industry. The productivity has also increased, reaching over 4000 square feet per production man-hour. Moreover, the consumers are expected to see a significant increase in the cost of corrugated cardboard by 4 percent than last year.

The demand for retail-ready corrugated boxes is expected to increase by 7 percent each year making up to $3 billion by 2020. These boxes allow the shipping containers to also act as retail packaging. This growth is expected to outrun today’s average availability due to continued expansion for store units among retailers, who need retail-ready packaging, specifically discount grocery stores. Moreover, the manufacturers are expected to see increasing demand for high-quality graphics, customization, and unique box designs.

Green Production

Among all aspects of the cardboard box manufacturing industry, there has been an exponential increase in the demand for green production both by the government and consumers. On the other hand, the overall green market is significantly growing in all sectors. The global green packaging market is driven by government and American consumers who now have increased environmental awareness for all products including paper packaging items. This shift among consumer demand has forced manufacturers to take significant measure to make their boxes environment-friendly, at the same time letting consumers know of their efforts to attract customers.

Research firms believe that the green packaging market share will reach $240 billion by 2021, which is growing at a compound annual growth rate of 7 percent since 2016. It also reveals that the global green packaging market will generate a revenue of $210 billion by 2022, which grew at a CAGR rate of nearly 6 percent since 2016. The food & beverage segment accounts for nearly 60 percent of overall green packaging.

Compared to plastics, styrofoam and other materials, the folding carton and corrugated cardboard boxes are considered to be a better green packaging solution by the consumers. This is typically fueled by recent concern on the devastating effects of plastic on marine life. Paperboard packaging is made from recycled products and is better than fossil fuel-based plastic packaging.

A report from GlobalData states that nearly 70 percent of consumers always recycle their packaging boards and  50 percent of consumers avoid excessively packaged grocery products.

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Big companies such as Unilever, Walmart, Mars, M&S, PepsiCo etc. have announced that they will be using 100 percent reusable, recyclable or compostable packaging by 2025. This brings a big concern to the package manufacturers to shift towards producing 100% recyclable cardboard boxes by that time.

Anti-Theft Packaging

Many folding carton manufacturers are working to include technology to fight theft and counterfeit products. They are working at using RFID technology, including printing sensor platforms which enables label printing by combining temperature and the first-opening sensor with a printed NFC antenna. The technology is pretty cutting-edge for the cardboard box industry. After its implementation by even one company, we may expect to see other manufacturers incorporating similar technologies. The anti-theft and security packaging is expected to have a market worth of more than $3.5 billion by 2022.

Why is There an Increasing Demand in Corrugated Cardboard Boxes?

  1. Considering company branding and adventures, cardboard boxes are good printing and graphics holding capability. Therefore, many companies use the company logo, company name, and other product or company details on the cardboard boxes.
  2. Cardboard boxes are the cheapest type of packaging; moreover, the prices reduces when companies buy cardboard boxes in bulk from manufacturers.
  3. Cardboard is recyclable and biodegradable and brings the least impact on the environment. It is also one of the many reasons for companies to opt for cardboard boxes because of growing demand for environment-friendly packaging by consumers.
  4. Paper boxes don’t have any chemical reaction with food and beverages compared to other containers; moreover, consumers prefer to store and stack cardboard boxes for their convenience.
  5. Corrugated boxes are lightweight and easy to handle and transport.

Packaging Trends You Might See in 2019

Green Packaging

Green and sustainable packaging is aiming at increasing the lifecycle of the packaging box and reduce ecological footprint. Sustainable packaging is already a trend set in motion, and we are expecting to see a lot more in the coming years. Consumers, Retailers as well as manufacturers are rapidly shifting towards package sustainability. Several big companies have already made the move and more are catching-up. Retailers such as Target and Walmart are aggressively working towards using only green packages.

The decline of Plastic Packaging

Many countries are taking radical steps to completely eliminate the use of plastics, be it in any form. This brings other countries to take up the trend and abolish using plastic packaging altogether. Cardboard is a more sustainable, cheap and easy-to-produce material, it is going to replace all plastic packaging. However, the metal container will continue to exist.

Packaging as a Marketing Channel

Cardboard boxes are great at producing high-quality images holds prints longer than other packaging material. Both consumers and businesses agree on the potential of branded packaging. Many start-ups are already incorporating marketing content on their packages and consumers agree that branded packaging has a positive effect on their product choice.

Minimalistic Design

Apple’s minimalistic packaging design has pushed other brands to incorporate this trend. From electronics to food and beverages, businesses from all sectors are looking forward to employing minimalistic design on their package. This not only increases the package’s appearance but also reduces distractions on the product.

More Ecommerce Packaging

It’s not just Amazon.com, but other homegrown e-commerce companies are also employing cardboard packages over plastic packaging. It not only increases their brand value but also creates a positive brand impact on their customers.

Specially Designed Boxes

Recently subscription boxes have caught-up in the eCommerce industry. As consumers are moving towards shopping as a subscription, thereby receive different products every time, the e-commerce companies have started producing specially design boxes with a unique and striking design to attract more customers.

Conclusion

Considering today’s scenario, it is safe to say that cardboard box manufacturing is a lucrative business. Although it does take some significant investment upfront, in the long run, you can expect good return on your investment. You will find many investors who would be happy to help you provided that you have a solid business plan and are addressing today’s customers’ pain points. Moreover, with the sustainability issue on the rise, we can expect even more packaging companies in the future who will bring unique designs and produce a variety of boxes from a variety of paper material. If you are willing to get into the cardboard box manufacturing business, we believe it would be a profitable venture.

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