By Portia Zhao
Tissue consumption in Asia and Oceania reached some 8.3 million tons in
2008, accounting for 29% of global consumption. China and
Japan represent more than three-quarters of the regional
total. Hong Kong, New Zealand, Macao, Australia, and Japan are the most
developed markets, measured in terms of per capita tissue consumption. Regional
market growth has been dominated by China, while the Japanese tissue market
has shown maturity and grown only marginally in recent years. Asia's huge
population - the region accounts for 57% of global population - provides
good opportunities for tissue industry expansion, though consumption levels
are still very low in several populous countries such as India, Bangladesh
and Pakistan. RISI's Asia
RISI's Tissue competitive cost benchmarking study analyzes over 3.8 million
tons of tissue production in Asia and Oceania. The majority share of this
3.8 million tons is bath (56%) followed by facial (28%), towel (10%) and
napkin (6%). This is markedly different from North America and Europe,
where towel is a primary product in the tissue sector, with market share
of 35% and 30% respectively. In the Asian region, away-from-home tissue
consumption continues to account for a very low share (less than 14%) of
total consumption, although it has grown recently, and towel products are
still in their early development phase. In North America commercial tissue
makes up about 33% the total market and in Europe it is about 20%.
The Asian tissue market is much more fragmented than the North American
or European markets. In North America, the top three producers
(Georgia-Pacific, P&G and Kimberly-Clark, produce 73% of all retail
tissue. In Europe, the top three producers (SCA, Sofidel, and
Kimberly-Clark), produce only 49% of retail tissue, while the
top five produce about 68% of the tissue. In Asia, the top
six producers hold a 53% market share (2 million tons per year). The top
six producers are APP, Hengan International, Kimberly-Clark, Vinda, Oji
Nepia and Nippon Paper Crecia. APP is the largest producer in Asia and
Oceania accounting for 16% of the total share, followed by its nearest
two rivals, Hengan International and Kimberly-Clark, which hold shares
of 9% and 8%, respectively. The total for the top three Asian producers
is only 33%, far below that seen in North America and Europe.
APP has twenty-three machines in five mills in China and Indonesia, while
Chinese producer Hengan International has seven machines in three mills
and Kimberly-Clark has 15 machines in eight mills throughout Australia,
China, Malaysia, Taiwan and Thailand.
Figure 1 shows the Asian tissue machine level cash manufacturing cost
curve in the fourth quarter of 2008. Each of the bars in the curve represents
one product produced on one machine. The bars are arranged by ascending
order of cash cost from left to right with world region indicated. For
each bar, the height represents the cash cost while the width denotes the
capacity of each product.
A weighted average of cash manufacturing cost for all the tissue products
is $736/ton, ranging from $366 to $1054. Napkin has the lowest
weighted average cash cost of $707/ton, followed by bath with $727/ton
and towel with $743/ton.
Bath and facial tissue dominate the tissue sector in Asia and Oceania
with about 84% of total benchmarked capacity. Bath tissue, which is about
2.15 million tons has cash manufacturing costs ranging from $366/ton to
$1006/ton, while facial is about 1.1 million tons/yr and costs range from
$378/ton to $1054/ton.
In the study, China and Japan, as the largest two countries producing
tissue, account for 66% of total benchmarked production, while the top
five largest tissue-producing countries (China, Japan, Korea, Australia
and Indonesia) produce about 87% of the total benchmarked production. Indonesian
mills have low cash costs as they have low fibre and labour costs. The
high-end is dominated by countries such as Japan and Taiwan. Japanese mills
are affected by recent strengthening of the Japanese Yen, along with high
energy and labor costs, while Taiwanese mills typically use high cost market
chemical pulp.
Figure 2 shows the comparison of costs for tissue products in three world
regions: Asia, Europe and North America. In Europe, RISI benchmarks
5.7 million tons of tissue production with a weighted average
cash manufacturing cost of $957/ton, which is 30% higher than
Asian cash cost. This is primarily due to high fibre and energy
costs. In North America, RISI benchmarks 7.9 million tons of
tissue production with a weighted average cash manufacturing
cost of $813/ton, which is only 10% higher than Asian cash cost. Mostly,
higher labour and maintenance costs explain the difference. However, North
America has the lowest fibre costs mainly because of a far higher level
of integration to wood. In Asia and Oceania, the fibre furnish is variable.
For example, in China and Taiwan a majority of benchmarked
mills are purchasing market chemical pulp, while in the rest of Asia and
Oceania virgin fibre-based tissue normally dominates in highend markets,
while recycled fibre-based tissue, mostly bath, is widespread in the low-end
market.
High-quality and high-performance through air dried (TAD) products have
not taken off in Europe and Asia the same way as in North America, mostly
due to less demanding customers, who are unwilling to pay the premium for
TAD products. Another factor is the high energy prices needed in TAD production.
Australia has installed two TAD machines and Japan has only one secondhand
machine bought from USA. The two TAD paper machines in Australia are operating
well while the only Japanese machine has switched production to sanitary
products.
Asian machines apparently lag a lot behind European and North American
machines in productivity which is defined as total machine
capacity divided by trim width. Of the 189 machines benchmarked
in Asia, 155 machines in Europe and 186 machines in North America, the
average Asian tissue machine has a productivity of 17.49 tons/day/metre,
while the average European tissue machine is 26.81 tons, and North America
is 26.28 tons. TW
| Portia Zhao
is a product manager for cost benchmarking based
in RISI's Shanghai office. This article is based
on the results of RISI's Asian Tissue Machine Level
Cost Benchmarking Study 2009. For further information
about the study contact Levi Li on +86 13917146037
or email: lli@risiinfo.com. |
|
