Spain on the charge
With eight new machines added in the past four years, Spain's capacity has boomed. It now has one of the most modern machine parks in Europe

In the past four years (2005-08), Spanish tissue mills have charged ahead with all the vigour of that country's renowned fighting bulls. Its mills have started up eight new machines, with total annual capacity of around 350,000 tons, according to data obtained by Tissue World from machine suppliers and tissue companies. This accounts for close to 40% of the country's total capacity for tissue and toweling.

It also represents a dramatic acceleration from the 10 years to 2004. Then seven new machines added 210,000 tons of new capacity, not much more than 20% of the annual tonnage addition of the latest period.

Quite where all that tonnage is going is not clear. In the following article, Euromonitor International estimates volume demand at around 350,000 tons in 2007, well under half current capacity. Growth is modest, a mere 11% since 2002, according to Euromonitor, and the years ahead offer little to encourage optimism.

Export is a tough business in Europe these days, with slow growth in demand allied to strong competition from Eastern Europe, the Middle East and North Africa. And, though Spain's machines are among the most modern and include a high percentage of relatively large machines (see charts 1-4), they also tend to be high-cost producers by European standards (Chart 5).

As all the world knows, Spain's charging bulls rarely lead long and fruitful lives. Given the difficulties in the market caused by overcapacity and retail strength, some of those charging bulls of the tissue industry will do well to escape the matador's sword in the years ahead.

Explanation Of The Charts

Technical Age is a calculation indicating the relative competitiveness of machines from a technical standpoint, expressed in numbers of years. The calculation uses the original age of the machine and factors for the impact of rebuilds. Rebuild impact is assessed by machine section. The calculation is rules-based, assuring consistency across all machines.

Cost per ton is calculated using Fisher Logic™'s sophisticated massand- energy balance engine that includes optimization routines simulating the way pulp and paper mills actually operate. Inputs to the model include Fisher International's global industry database of the assets and production of every mill in the world making at least 50 tons/day and regional input prices for all major commodities. Balances for every mill and all costs are updated every quarter.