Part XVI--Proposed New Industry Structure for Paper Manufacturing

Section A--NAICS Structure

North American Industry Classification System

(NAICS)

Agreement Number 27

  This document represents the proposed agreement on the structure of the North American
Industry Classification System (NAICS) for the following industries:
Paper  Manufacturing
  The detailed NAICS structure along with a brief description of the structure is attached
(Attachments 1 and 2).  Each country agrees to release a copy of the proposed NAICS structure
to interested data users.  Comments received will be shared among the countries and additional
discussions will be held before a final decision on the structure is made.  Each country may add
additional detailed industries, below the 4-digit level of NAICS, as necessary to meet national
needs, so long as this additional detail aggregates to a 4-digit NAICS level in order to ensure full
comparability among the three countries.  This NAICS structure was presented and provisionally
accepted at the NAICS Committee meeting held on November 8 and November 9, 1995 in
Washington, D.C.

Accepted            Signature           Date

Canada         /S/   Jacob Ryten   11/9/95
Mexico         /S/   Enrique Ordaz      11/9/95
United States     /S/   Jack E.Triplett      11/9/95

ATTACHMENT 1--NAICS STRUCTURE

XX     Paper Manufacturing 
XXX       Pulp, Paper, and Paperboard Mills
XXXX      Pulp Mills
XXXX      Paper Mills
XXXX      Paperboard Mills
XXX       Converted Paper Product Manufacturing
XXXX      Paperboard Container Manufacturing
XXXX      Paper Bag and Coated and Treated Paper Manufacturing
XXXX      Stationery Product Manufacturing
XXXX      Other Converted Paper Product Manufacturing

Attachment 2--North American Industry Classification System

Draft Classification for: 
  Paper Manufacturing

  Representatives of the statistical agencies of Canada, Mexico, and the United States agree to
a draft industrial classification for these industries.
  The draft classification provides for the subsector, Paper Manufacturing.  This subsector is
further subdivided into two industry groups and seven industries.  The subsector will be part of
the Manufacturing sector of the classification.

A General Outline

  The Paper Manufacturing industries produce pulp, paper and converted paper products.  The
manufacture of these products is grouped together because they constitute a series of vertically
connected processes.  More than one is often carried out in a single establishment. There are
essentially three activities.  The manufacture of pulp involves separating the cellulose fibers
from other impurities in wood or used paper.  The manufacture of paper involves matting these
fibers into a sheet.  Converted paper products are produced from paper and other materials by
various cutting and shaping techniques.
  The Paper Manufacturing subsector is subdivided into two industry groups, the first for the
manufacture of pulp and paper and the second for the manufacture of converted paper products. 
Paper making is treated as the core activity of the subsector.  Therefore, any establishment that
makes paper (including paperboard), either alone or in combination with pulp manufacture or
paper converting, is classified as a Paper or Paperboard Mill.  Establishments that make pulp but
no paper are classified as Pulp Mills.  Pulp Mills, Paper Mills and Paperboard Mills comprise the
first industry group.
  Establishments that make products from purchased paper and other materials make up the
second industry group, Converted Paper Product Manufacturing.  This general activity is then
subdivided based, for the most part, on process distinctions.  Paperboard Container
Manufacturing uses corrugating and cutting machinery to form paperboard into containers. 
Paper Bag and Coated and Treated Paper Manufacturing establishments cut and coat paper. 
Stationery Product Manufacturing establishments produce a variety of paper products used for
writing, filing and similar applications.  Other Converted Paper Product Manufacturing includes
in particular the conversion of sanitary paper stock into such things as tissue paper and
disposable diapers.
  An important process used in the Paper Bag and Coated and Treated Paper Manufacturing
industry is lamination, often combined with coating.  Lamination and coating produces a
composite material with improved properties of strength, impermeability and so on.  The
laminated materials may be paper, metal foil or plastic film.  While paper is often one of the
components, it is not always.  However, lamination of plastic film to plastic film is classified in
Rubber and Plastic Product Manufacturing because establishments that do this often first
produce the film.  The same situation holds with respect to bags.  The manufacture of bags from
plastic only, whether or not laminated, is classified in Rubber and Plastic Product
Manufacturing, but all other bag manufacturing is classified in this industry. 

Limitations and Constraints of the Classification

  In the Paper Manufacturing industry, most activities that were identified in one country exist
in the others.  However, often an activity is not economically significant to the same degree in all three countries.  For example, a relatively broad NAICS industry was created for Paper Mills,
because the possible subdivisions are small in Mexico.
  An operating rule has therefore been adopted for this industry subsector that the NAICS
industries must be economically significant and publishable in all three countries.  Each country
will publish additional categories that comprise subdivisions of NAICS industries, to present
data for activities that are nationally significant.
  For those users requiring detailed commodity information, each country will publish
information on the products of these industries.  Efforts are also underway to harmonize the
commodity classifications to allow for greater comparability of these statistics.

Relationship to ISIC

  Most 4-digit NAICS industries in this subsector are contained in Division 21, Manufacture of
Paper and Paper Products, of the current International Standard Industrial Classification of all
Economic Activities (ISIC, Revision 3) of the United Nations.  Four of the seven NAICS 4-digit
industries in this subsector are contained entirely in this Division.  There are, however, some
differences between the two systems. 
  NAICS includes the manufacture of some products that are made from non-paper materials,
such as multi-web plastic bags, in Paper Bag and Coated and Treated Paper Manufacturing,
because the production processes are similar regardless of the material.  ISIC classifies these
articles according to their principal component material.
  The other differences with ISIC are minor, but they do result in the following NAICS
industries not being entirely contained within ISIC Division 21.  Paper Mills in NAICS includes
the manufacture of saturated papers, if the paper is made in the same establishment.  ISIC treats
this activity in manufacture of Non-Metallic Mineral Products.  It is a minor difference.  Other
Converted Paper Product Manufacturing includes some minor activities, such as the manufacture
of paper novelties, that are classified elsewhere in ISIC.  

Some Changes to the National Classifications

  For Canada, the Paper Manufacturing subsector is largely the same as the current Canadian
classification's Paper and Allied Products Industries major group.  There are two major
differences.  The Canadian classification includes the manufacture of building board in Paper
Manufacturing, whereas NAICS includes it in Wood Manufacturing, except Furniture because it
is in fact made from wood fibers and not paper.  The saturation of paper products with asphalt is
classified in NAICS Petroleum and Coal Product Manufacturing, because the saturation process
is more important to the activity than the material being saturated.  The structure of this NAICS
subsector is similar to that of the Canadian classification, but there is less detail.
  For Mexico, the Paper Manufacturing subsector is largely the same as the current Mexican
classification's Manufacture of Pulp, Paper and Paper Products.  The main difference is the
classification of some sanitary products, such as disposable paper diapers, in Textile Products.
The structure and amount of detail of this NAICS subsector is similar to that of the
corresponding area of the Mexican classification.
  For the United States, there is little difference between the Paper Manufacturing subsector of
NAICS and the current Paper and Allied Products Major Group.  Converted foil containers are
included in the NAICS subsector; they are classified in Metal Fabricating in the 1987 SIC. 

Achievement of Objectives

  The classification meets the objectives for the North American Industry Classification
System (NAICS).  It includes industries that group establishments with similar production
processes, that is, it applies the production-oriented economic concept.  The hierarchical
structure of the classification also follows the production concept.  Pulp and paper manufacturing
are much more capital intensive operations than paper converting, and the material inputs are
different.
  Other objectives of the NAICS project are not as relevant in this area of the classification as
in others.  These objectives are the delineation of new and emerging industries and service
industries.  The industrial sector in question is relatively mature and generally produces goods. 
At the product level, there are numerous developments, such as the use of recycled paper in pulp
making; however, these do not form the basis of establishment organization and hence of
industries.  Therefore, the emphasis is on the objectives listed above.
  The industries have high specialization ratios, and they are economically significant.  The
detail (4-digit) level and structure of the classification are balanced in size.  This enhances the
classification's suitability for sampling, data-publishing and other aspects of survey operations. 
Finally, while disruptions to time series exist, they have been minimized.  The statistical
agencies can develop statistical "links" to enable the re-tabulation of time series on the new
NAICS classification structure.
  The classification achieves comparability for the three participating countries.  Based on
existing data, all three countries expect to be able to publish data regularly at the industry (4-digit) level of the structure.  All countries agree on the detailed definitions of the industries.

Section B-Annex: United States National Industry Detail

  As explained in the Structure presentation of this notice, for a number of reasons 4-digit
industries in the NAICS industry subsector presented in Part XVI, Section A--Attachment 1,
contain less detail than is currently in the U.S. SIC system, and less detail than is required to
meet important analytical requirements in the U.S.  The three country agreement on NAICS
envisions that each country may develop national detailed industries below the NAICS industry
level, so long as the national detail can be aggregated to the NAICS classification, thus assuring
full North American comparability.
  The ECPC is proposing U.S. 5-digit industry detail for the NAICS industry subsector
covered in Part XVI of this notice.  For cases where no 5-digit detail is shown, the ECPC is
proposing that the NAICS 4-digit industries will also represent the most detailed U.S. industries.

                                         TABLE 1
                                            
The definitions of status codes are as follows: E-existing industry; L-null industry for the U.S.; N-new industry R-revised industry;; and * means "part of". The abbreviation NEC
is used for Not Elsewhere Classified.

1997 NAICS and U.S. Description


Status
code
1987
 SIC
code
1987 SIC DESCRIPTION









XX
Paper Manufacturing
   




XXX
     Pulp, Paper and Paperboard Mills





XXXX
          Pulp Mills   
R
*2611
Pulp Mills (pulp producing mills only)


XXXX
          Paper Mills         





XXXXX
               Paper Mills, except Newsprint Mills
R
*2611
Pulp Mills (pulp mills producing paper)





*2621
Paper Mills (pt) (except newsprint mills)


XXXXX
               Newsprint Mills
N
*2621
Paper Mills (pt) (newsprint mills)


XXXX
          Paperboard Mills
E
*2631
Paperboard Mills


XXX
     Converted Paper Product Manufacturing





XXXX
          Paperboard Container Manufacturing





XXXXX
               Setup Paperboard Box Manufacturing                          
E
  2652
Setup Paperboard Boxes


XXXXX
               Corrugated and Solid Fiber Box Manufacturing      
E
  2653
Corrugated and Solid Fiber Boxes


XXXXX
               Fiber Can, Tube, Drum, and Similar Product
               Manufacturing
E
  2655
Fiber Cans, Tubes, Drums, and Similar Products


XXXXX
               Non-Folding Sanitary Food Container
               Manufacturing
R
  2656
Sanitary Food Containers, Except Folding





*2679
Converted Paper and Paperboard Products, NEC (egg cartons
and other containers from purchased paper)


XXXXX
               Folding Paperboard Box Manufacturing
E
  2657
Folding Paperboard Boxes, Including Sanitary


XXXX
          Paper Bag and Coated and Treated Paper
          Manufacturing





XXXXX
               Coated and Laminated Packaging Paper and
               Plastic Film Manufacturing
R
 *2671
Packaging Paper and Plastics Film, Coated and Laminated
(single-web paper, paper multiweb laminated rolls and sheets
for packaging uses)


XXXXX
               Coated and Laminated Paper Manufacturing
R
   2672
Coated and Laminated Paper, NEC



               

 *2679
Converted Paper and Paperboard Products, NEC (wallpaper and
gift wrap paper)


XXXXX
               Plastic, Foil, and Coated Paper Bag
               Manufacturing
R
 *2673
Plastics, Foil, and Coated Paper Bags (coated or multiweb
laminated bags)


XXXXX
               Uncoated Paper and Multiwall Bag Manufacturing
E
   2674
Uncoated Paper and Multiwall Bags


XXXXX
               Laminated Aluminum Foil Manufacturing for
               Flexible Packaging Uses 
N
 *3497
Metal Foil and Leaf (laminated aluminum foil rolls and sheets
for flexible packaging uses)


XXXX
          Stationery Product Manufacturing





XXXXX
               Die-Cut Paper and Paperboard Office Supply
               Manufacturing
N
*2675
Die-Cut Paper and Paperboard and Cardboard (file folders,
tabulating cards, and other paper and paperboard office
supplies)





*2679
Converted Paper and Paperboard Products, NEC (paper
supplies for business machines and other paper office supplies)


XXXXX
               Envelope Manufacturing
E
  2677
Envelopes


XXXXX
               Stationery, Tablet, and Related Product
               Manufacturing
E
  2678
Stationery, Tablets, and Related Products


XXXX
          Other Converted Paper Product Manufacturing





XXXXX
               Surface-Coated Paperboard Manufacturing
N
*2675
Die-Cut Paper and Paperboard and Cardboard (pasted, lined,
laminated, or surface-coated paperboard)


XXXXX
               Sanitary Paper Product Manufacturing
E
  2676
Sanitary Paper Products


XXXXX
               Other Converted Paper and Paperboard Product
               Manufacturing
R
*2675
Die-Cut Paper and Paperboard and Cardboard (die-cut paper
and paperboard products, except office supplies)





*2679
Converted Paper and Paperboard Products, NEC ( Other
converted paper and paperboard products such as paper filters,
crepe paper, and laminated and tiled wallboard)

                                          TABLE 2

           The abbreviation "pt" means "part of". @ means time series break has been created that is greater than 3% of the 1992 revenues for the 1987 SIC industry.


 
1987 SIC code

1987 SIC code

1997 U.S. description 
     


2611
Pulp Mills




     Pulp Producing Mills Only
Pulp Mills



     Pulp and Paper Producing Mills
Paper Mills, except Newsprint Mills (pt)


2621@
Paper Mills
 



   Except Newsprint Mills
   Newsprint Mills
Paper Mills, except Newsprint Mills (pt)
Newsprint Mills


2631
Paperboard Mills
Paperboard Mills


2652
Setup Paperboard Boxes
Setup Paperboard Box Manufacturing


2653
Corrugated and Solid Fiber Boxes
Corrugated and Solid Fiber Box Manufacturing


2655
Fiber Cans, Tubes, Drums, and Similar Products
Fiber Can, Tube, Drum, and Similar Product
Manufacturing


2656
Sanitary Food Containers, Except Folding
Non-Folding Sanitary Food Container
Manufacturing (pt)


2657
Folding Paperboard Boxes, Including Sanitary
Folding Paperboard Box Manufacturing


2671@
Packaging Paper and Plastics Film, Coated and Laminated




     Single-Web Paper, Paper Multiweb Laminated Rolls and
     Sheets for Packaging Uses
Coated and Laminated Packaging Paper and
Plastic Film Manufacturing



     Plastic Packaging Film and Sheet
Unsupported Plastic Packaging Film and Sheet
Manufacturing (Included in Rubber and Plastic
Product Manufacturing subsector)


2672
Coated and Laminated Paper, NEC
Coated and Laminated Paper Manufacturing (pt)


2673@
Plastics, Foil, and Coated Paper Bags




     Coated or Multiweb Laminated Bags
Plastic, Foil, and Coated Paper Bag
Manufacturing



     Plastics Bags  
Unsupported Plastic Bag Manufacturing
(Included in Rubber and Plastic Product
Manufacturing subsector)


2674
Uncoated Paper and Multiwall Bags
Uncoated Paper and Multiwall Bag
Manufacturing


2675@
Die-Cut Paper and Paperboard and Cardboard




     File Folders, Tabulating Cards, and Other Paper and
     Paperboard Office Supplies
Die-Cut Paper and Paperboard Office Supply
Manufacturing (pt)



     Pasted, Lined, Laminated, or Surface-Coated Paperboard
Surface-Coated Paperboard Manufacturing



     Die-Cut Paper and Paperboard Products, Except Office
     Supplies
Other Converted Paper and Paperboard Product
Manufacturing (pt)


2676
Sanitary Paper Products
Sanitary Paper Product Manufacturing


2677
Envelopes
Envelope Manufacturing


2678
Stationery, Tablets, and Related Products
Stationery, Tablet, and Related Product
Manufacturing


2679@
Converted Paper and Paperboard Products, NEC




     Egg Cartons and Other Containers from Purchased Paper
Non-Folding Sanitary Food Container
Manufacturing (pt)



     Wallpaper and Gift Wrap Paper
Coated and Laminated Paper Manufacturing (pt)



     Paper Supplies for Business Machines and Other Paper
     Office Supplies
Die-Cut Paper and Paperboard Office Supply
Manufacturing (pt)



     Other Converted Paper and Paperboard Products such as
     Paper Filters, Crepe Paper, and Laminated and Tiled
     Wallboard
Other Converted Paper and Paperboard Product
Manufacturing (pt)







3497@
Metal Foil and Leaf




     Laminated Aluminum Foil Rolls and Sheets for Flexible
     Packaging Uses
Laminated Aluminum Foil Manufacturing for
Flexible Packaging Uses



     Foil and Foil Containers
All Other Fabricated Metal Product
Manufacturing (pt) (Included in Fabricated
Metal Product Manufacturing subsector)

Description of Changes to the U.S. System

       Four new industries were added to the 1997 industry structure for this industry subsector. 
The industries created were:
       Newsprint Mills from part of 1987 SIC 2621, Paper Mills, to achieve international
comparability with Canada.
       Laminated Aluminum Foil Manufacturing for Flexible Packaging Uses from part of 1987
SIC 3497, Metal Foil and Leaf, to achieve international comparability, and because the
production processes are similar, regardless of the material used.  This is the lamination, not
creation of foil.  Canada has this in CSIC 27, Paper and Allied Products.
       Die-Cut Paper and Paperboard Office Supply Manufacturing from part of 1987 SIC 2675,
Die-Cut Paper and Paperboard and Cardboard, and 1987 SIC 2679, Converted Paper and
Paperboard Products, NEC.  These two 1987 SIC industries (SIC 2675 and SIC 2679) were split
and recombined in order to achieve international comparability with Canada and Mexico; as a
result of this split, it was possible for the U.S. to form this new industry, which is justified on the
production-oriented criterion and has the effect of reducing the size of an "NEC" category in the
1987 SIC.
       Surface-Coated Paperboard Manufacturing from part of 1987 SIC 2675, Die-Cut Paper and
Paperboard and Cardboard, to achieve international comparability.
       Two activities were transferred out of 1987 Major Group 26, Paper and Allied Products, into
the 1997 NAICS Rubber and Plastic Product Manufacturing subsector, because of similarities of
production process.  These were:
       Plastic packaging film and sheet from 1987 SIC 2671, Packaging Paper and Plastics Film,
Coated and laminated plastic bags from 1987 SIC 2673, Plastics, Foil, and Coated Paper Bags. 
       Also, several activities were transferred within the Paper Manufacturing subsector.  The
number of paper manufacturing industries increased from 17 in 1987 to 20 in 1997.  For time
series linkage, 13 of the 17 1987 industries are comparable within three percent of the 1997
industries.