The number 1 and the only integrated tissue producer in Hungary, Piszkei Papír SA in Labatlan, was for sale in early 2009 and closed down for three months because of severe financial problems, according to news portal Index. The Greek owners were planning to sell some production lines to a Bulgarian paper mill during the three-month pause. Piszkei has been suffering credit problems for the last three years. There were reported payroll delays, 33% work force reduction and utility shutoffs due to unpaid bills.

Piszkei, an 84-year-old company, with annual capacity of 74, 000 tons of crepe and MG tissue paper on its four paper machines, actually produced about one third of this amount and converted about 500 tons to finished product. In 2007, the tissue market in Hungary was estimated at almost 100,000 tons.

The market grew from 1998 to 2006 at 5%/yr on average, with fluctuations from double digit to a few points. Rapid growth of image and brand awareness for tissue has driven imports from the leading world suppliers to almost saturation level in recent years.

With quality tissue in demand, imports are popular not only at the higher end of the toilet paper market but also for kitchen towels. Parent roll imports of about 40,000 ton in 2006 showed the market potential for quality white tissue in the country, given relatively high disposable incomes compared to other Eastern European nations. Hungary’s per capita tissue consumption was the highest among the former Soviet bloc countries at around 6 kg in 2007.

Two industries in Hungary are almost immune to financial calamity - pharmaceuticals and food production. Therefore, the major distribution channels for retail tissue products in Hungary–pharmacies/drugstores and supermarkets/hypermarkets – are less affected by the crisis than the econonomy as a whole. Retail chains such as Profi Magyarorszag and Kaiser’s (Hungary), the Rossman and Drogerie Markt chains (Germany) and hypermarket outlets Aldi, Cora, Tesco, Metro, CBA, Spar, Coop, Real and Auchan account for over 75% share of the consumer tissue market.

Crisis did not significantly change the market position of the domestic leader in tissue converting. Forest-Papir Kft. with annual capacity about 13,000 tons based on imports of white parent rolls and the market was not affected by the Piszkei stoppage. There are over a dozen small converters across the country, such as Müller Papir, Vajda Papir, Nova- Packtum and Tento, which still produce lower-quality toilet paper from secondary fibre and compete with private label imports in supermarkets. The continued slowdown in the industry will lead to the increase of imports (both jumbo rolls and finished products) from sources in Italy, Germany, Austria and Slovakia.

Szolnok in central Hungary is the location of numerous paper processors and converters. In recent years this region has seen plentiful activity, with paper mill machinery changing hands and plans for new tissue mills. Cutbacks and reorganizations in the domestic tissue sector may leave this area depressed for next few years.