TerraSkin: Paper Made from Rock

Used to be bag options at the store were paper or plastic. Now shoppers can choose cloth bags, too. They may have another alternative: rock. Shopping bags and boxes from gift stores at New York's Museum of Modern Art, bags from personal-care company Erno Laszlo, and packaging of consumer products from Burt's Bees look, feel, and fold like paper, but they're made of crushed stone.

The treeless paper, manufactured in Taiwan and sold under the TerraSkin brand, is three parts recycled calcium carbonate—the same mineral in marble and limestone—and one part polyethylene binder. Production requires no water or bleach and only half the energy needed to make traditional paper. The material is durable; tote bags can be used over and over. It is also recyclable. And TerraSkin breaks down into a talcum-like powder if exposed to sunlight and humidity long enough.

Its limitation: Price. Though the raw materials are cheap, sales volumes are low so its manufacturer has to make it in small batches. As a result, it typically wholesales for at least 8% more than packaging paper.

"Blown Away" at MoMANonetheless, sales will triple in 2009, predicts Design & Source, a New York green packaging company that distributes TerraSkin in North America. Other premium-end customers include Herman Miller (MLHR) and Hilton Hotels. MoMA recently ordered 682,000 TerraSkin shopping bags, which cost 25% more than previous plastic bags. Customers are "blown away by it," says Kathy Thornton-Bias, general manager for MoMA Retail.

Rising sales volume could lower costs, which might attract more customers. "We want to build economies of scale and streamline production process more," says Nicole Smith, environmental director for Design & Source. The company aims to make TerraSkin competitive with paper by 2012. Complicating that task: Coated-paper prices have dipped because of weak demand.

By most definitions, TerraSkin isn't a true paper. Because it contains polyethylene to bind the calcium carbonate, it is classified as a polymer or plastic film, says Andrew Dent, a library and research vice-president at materials consultancy Material ConneXion.

Durable plastic film that is water- and tear-resistant emerged as a niche alternative to fiber-based paper in 1969 when Tokyo's Yupo invented the first synthetic paper, also named Yupo. The company hoped the polypropylene-based paper, which also contains calcium carbonate, would replace regular paper but it never did. "Oil was cheap," says Marketing Manager Troy Olson. "The oil embargo in the '70s changed this." Today, the film can cost two to four times as much as paper, depending on the application.

Polymer's Many UsesYupo and competing products now are used primarily for labels—Procter & Gamble (PG) uses the film on detergent and soap bottles—as well as printing materials such as menus and maps. Olson says it competes with laminated papers and synthetic sheets rather than paper.

Other polymer sheets have worked their way into different markets. Valéron Strength Films of Houston manufactures a film for tags, labels, signs, banners, envelopes, wristbands, and high-strength tapes. Teslin, a synthetic sheet made by Pittsburgh's PPG Industries (PPG) is used in driver's licenses and other identification cards. Polymer films also show up in milk containers, butter wrappers, and yogurt cups. For this part, paper manufacturers have explored alternative fibers, including hemp, kenaf, and cotton, which has long been used in U.S. currency.

Products such as TerraSkin might broaden the market for synthetics. Unlike plastic films, they can be folded like paper and have a matte, almost chalky texture. It "feels like luxury paper—that actually is a great advantage" for certain uses, says Dent.

Rock paper has practical advantages, too. Burt's Bees, a subsidiary of Clorox (CLX), uses TerraSkin for soap packaging and was able to save money in the end because it could substitute one layer of TerraSkin for a sheet of wax-coated paper and a printed paper cover.

BCC Research, a Wellesley (Mass.) market researcher, estimates that sales of synthetics for use in traditional paper products such as maps, menus, and banners will grow at a rate of 6%, to 34,250 tons in 2011, up from 25,600 tons in 2006. Still, it's a pipsqueak industry. North America consumed 32.9 million tons of printing and writing papers in 2006, according to the Printing & Writing Papers Assn. in Montreal.

Before it's here, it's on the Bloomberg Terminal.