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Recent acquisitions are reshaping the tobacco-related paper market. (AI-generated image/imagine.art).
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The shift towards higher-quality, premium tobacco products is driving demand for specialized papers with enhanced characteristics. (AI-generated image/freepik).
The takeovers of Tann Group and Julius Glatz will reshape the market for tobacco-related papers.
Despite an overall continuous decline in global cigarette consumption over the past decade, the world’s tobacco-related paper market remains an attractive playing field. Market intelligence firm archivemarketresearch.com (AMR) estimates the 2025 market size at approximately US$2.5 billion. Driven by increasing cigarette consumption in developing economies and the ongoing demand for specialized papers with unique properties, such as heated tobacco products (HTPs), the company predicts a compound annual growth rate of 3% over the next eight years, claiming the market is poised to reach approximately US$3.5 billion by 2033.
The market is dominated by a handful of key players, who share 30-40% of the market between them, as well as smaller specialized tobacco paper suppliers. “These companies are competing through product differentiation, focusing on innovation and meeting the evolving needs of the tobacco industry,” AMR comments. “The competitive landscape is expected to remain intense, with companies focusing on strategic partnerships and acquisitions to expand their market share and product portfolios.”
While the level of mergers and acquisitions is moderate, not one but two deals once again reshaped the face of the global cigarette paper sector at the end of last year, signaling both market consolidation and a reconfiguration of power among suppliers of tobacco-related specialty papers. December 2024 saw the acquisition of Tann Group, an Austrian-headquartered global producer of cigarette tipping paper, by Evergreen Hill Enterprise, an affiliate of Indonesia’s Bukit Muria Jaya (BMJ), and the takeover of Julius Glatz, a German manufacturer of cigarette base papers and other lightweight technical specialty papers, by Massachusetts-based Seaman Paper Company, a supplier of sustainable paper and packaging solutions with operations in the US, Asia, and Europe.
For BMJ, already a global leader, the €410 million (US$477.32 million) acquisition of Tann Group, closed this June, represents the next step forward to the top in tobacco-related papers. Tann, which has 730 employees globally at sites in Austria, China, the Philippines, Turkey, Canada, and Germany, generates US$251 million in sales annually. The company prints on and finishes externally sourced fine paper to produce tipping paper, thus contributing to BMJ becoming a one-stop shop for paper products within the tobacco industry.
The takeover of Tann significantly increases BMJ’s scale in the tobacco-related papers market, especially in cigarette tipping paper used across the tobacco industry globally. Established in 1996, BMJ is a manufacturer of specialty paper and packaging materials in the cigarette industry. Its offer includes cigarette paper, plug wrap, printed packaging base paper, tipping base paper, and printed tipping paper as well as aluminum foil laminated paper and inner frame paper. Since it took over Mativ’s Engineered Papers business, known under the brand name Schweitzer-Mauduit International (SWM), for US$620 million in August 2023, its portfolio and geographical reach has broadened significantly.
Becoming a top player
Apart from conventional cigarette paper, SWM manufactures low-ignition propensity paper (LIP), rolling papers, porous and non-porous plug wrap, base tipping paper, and wrapping material for nicotine pouches. The transaction also provided BMJ with SWM’s reconstituted tobacco leaf (RTL) operations, making it a leading supplier of homogenized tobacco, a market that is increasing worldwide. In addition, the deal has given BMJ access to several fast-growing segments of the nicotine industry and beyond, among them HTP.
As a privately held company, BMJ’s financial results and other business results are not disclosed. According to exportgenius.com, the company exported goods worth US$25.09 million between April 2024 and March 2025. The company supplies major international tobacco companies and operates in over 20 countries.
So now it’s also conversion of tipping papers. With its most recent move, BMJ now controls two of the top five global suppliers of tobacco-related specialty papers, which will reduce competition in an already concentrated market. Tann Group, which like SWM will be operated as an independent business unit, will retain operational autonomy while profiting from BMJ’s group-level resources, strategic network as well as technology and r&d synergies. In turn, Tann adds strong manufacturing and client relationships in Europe to BMJ’s footprint.
Prior to its sale to BMJ, Tann had been part of Mayr-Melnhof Karton AG (MM), an Austrian manufacturer of paper and packaging, since 2005. While the tipping converter, generating annual sales of approximately €220 million, contributed 5% to MM’s total turnover, it showed only little synergies with MM’s core business, carton board and consumer packaging. With tobacco market dynamics changing over Tann’s twenty years under MM ownership, seeing volume declines, increasing regulation and ESG scrutiny, MM had increasingly concentrated on consumer packaging and sustainability. Tann had long been seen as a misfit within this strategy. Following the sale to a sector-specialized buyer, the company is now better positioned to focus on r&d-driven tipping innovation and may coordinate more directly with SWM and BMJ’s plug wrap and cigarette paper offerings.
Venturing into a new field
For Seaman Paper, the acquisition of Julius Glatz means diversification into a niche. Until now, the company had not been operating in tobacco-related papers. It specializes in lightweight papers for packaging and specialty applications and serves diverse industries such as retail, food service, e-commerce, fashion, and cosmetics. Like Glatz, which was founded in 1885, Seaman Paper is a family-owned business.
While terms of the transaction remain confidential, Glatz will remain a legally independent entity, with the Glatz brand being preserved to further strengthen its market position globally from its German base, the companies said in a press release. Glatz’s business divisions and production facilities will continue to operate under a new management team, and the roughly 240 employees of Glatz will join Seaman Paper’s global team.
Under Seaman Paper’s ownership, Glatz will shift from a traditional family-owned specialty producer to a global OEM partner with deeper North American exposure. For Seaman Paper, the rationale behind the deal is to strengthen its existing presence in Rastatt, Germany, a mill that manufactures tissue and crepe paper, which the company acquired in 2015.
In times like these, acquiring a traditional cigarette paper manufacturer might either be a bold diversification or a misstep into a declining sector. Glatz, however, offers more versatility for Seaman Paper than Tann did for MM, as more synergies are possible, and diversification options are high.
Both acquirers now benefit from vertical or lateral integration: BMJ can align tipping paper, plug wrap, and cigarette paper under one sourcing and sales strategy, improving margins and service to multinationals. Seaman Paper, which to date is primarily a tissue and packaging player, gains access to specialty lightweight papers and Glatz’s cigarette and rolling base paper, allowing expansion into RYO, HTP, or cannabis wrappers.
The two recent takeovers mean that on the suppliers’ side, Austria-based Delfort Group now stands as one of the last independent global players in cigarette and tipping base and plug wrap. On the customer side, tobacco companies’ purchase departments may face reduced supplier diversity, more bundled contracts and a potential pricing power shift towards suppliers in some formats. They will, however, also gain efficiency and consistency from integrated suppliers as well as access to broader innovation pipelines.
A challenging market
Both BMJ and Seaman Paper operate in a market that is experiencing a complex interplay of factors, AMR states. While global cigarette consumption is declining in developed nations due to health concerns and rising taxes, growth is witnessed in some developing countries, which creates a varied market picture. The industry also faces pressure to become more sustainable, leading to an increased adoption of recycled fibers and eco-friendly production processes.
Technological advancements focus on improving paper properties for enhanced burn rate consistency and printability. Regulations regarding tobacco product packaging and labeling also have a significant influence on the market. Furthermore, the rise of alternatives like e-cigarettes continues to present a significant long-term threat to demand for tobacco paper. Finally, fluctuations in raw material prices, for example wood pulp, impact production costs and profitability.
But despite these challenges, there are business opportunities, the market intelligence firm forecasts. “The market is poised for growth driven by increasing demand in certain developing economies, coupled with technological advancements leading to the creation of more efficient and sustainable products. Furthermore, the shift towards higher-quality, premium tobacco products is driving demand for specialized papers with enhanced characteristics.”