By Greg Grishchenko
The risk for global investors in the area associated with political
and economic ambiguity might be balanced with the prospects of
peace initiatives, growing consumerism and tourist exchange.
Israel is the country with the highest
tissue consumption in the Middle East region
(Figure.2). However, the latest new tissue
machine installation in the country occurred
in 2002, when Hogla- Kimberly, a joint-venture
of Kimberly- Clark and American Israeli Paper
Mills, set up a 22,000 ton/yr Metso PM at
the Nahariya mill. Having a much lower consumption
rate, Jordan almost doubled the country’s
tissue capacity last year with the launch
of Al Snobar mill, the most sophisticated
tissue operation in the world.
ISRAEL
Nearly 92,000 tons of tissue was
consumed in 2006 in Israel. The country’s
$190 million tissue market is going currently
in the direction
of the world’s most
developed countries,
with an annual growth rate of 1-2%. Current
Israeli tissue use breakdown by categories
shows the majority of it (63%) goes to toilet
paper, with the rest split among facial tissue
(17%), kitchen towels (14%) and tableware
(5.3%).
Though its share of the world tissue supply
is only about 0.26%, Israel is the biggest
user of toilet paper per capita in the world,
according to Kimberly-Clark research. “Israel
probably is the only country where you can
find one or two rolls of toilet paper in
every car, toilet paper rolls are used as
towels in public restrooms and often replace
facial tissues and pocket hankies,” Avi
Brenner, CEO of Hogla Kimberly, the major
Israeli tissue maker, said not so long ago.
And indeed jumbo packs of toilet rolls with
32, 48 or 56 count prevail on supermarket
shelves. This type of tissue product packages
can be found only in wholesale outlets or
price clubs in the US or Europe.
There are three principal local manufacturers
of tissue products in the country: Hogla
Kimberly, Shaniv Paper Industries and Sano
Bruno’s Enterprises (Figure 1). While
Hogla Kimberly is also a leading producer
of nonwovens such as feminine care products,
diapers and wipes, and Sano Bruno’s
is big in household chemicals, Shaniv is
mostly dedicated to tissue goods.
Hogla Kimberly, the leading tissue manufacturer
in Israel (about. $480 million turnover in
2006), is a partnership between Kimberly-Clark
Inc. – that holds 50.1% of the company – and
American Israeli Paper Mills Group Ltd (AIPM),
that holds 49.9%. Hogla Kimberly employs
almost 1000 people and dedicates two of its
three mills (in Hadera and Nahariya) to tissue
production with a total volume that reached
50,000 tons in 2006. The company produces
and markets toilet paper, towels and napkins
under the brand names Lily, Molett, Shmurat
Teva, Nikol, Nova Lee, Kleenex and others.
In 2006 Sano Bruno’s Enterprises
($245 million turnover) was the Number 2
tissue products manufacturer in Israel with
a history going back 49 years. An export-oriented
company which sells over 75% of its output
in foreign markets, it specialises in home
care, cleaning solutions, toiletries, nonwovens
and paper products. Founded in 1959 by Romanian
born Bruno Landsberg, Sano Bruno is located
in Hod Hasharon, employs over 770 people,
and produces an array of brands of toilet
paper, kitchen towels and napkins (Sano Soft
Silk, Sano Soft White, Oren, Sano Sushi,
Sano Eco and Gili).
A Sano Soft toilet paper brand competes
in the premium segment with Hogla’s
Lily brand. According to Euromonitor International,
Sano Bruno’s kitchen towel brand Sano
Sushi successfully competes against Nikol
brand from Hogla in price and quality (in
2006 Sano Sushi took 25% of the domestic
market). The company expands its presence
in the world markets (products from Sano
have already been sold in 14 countries) and
recently established a production site in
Romania. Over the last several years, Sano
Bruno has produced private label tissue products
for Israel’s largest retailers Super-Sol
and SuperPharm (brands Nature and Life).
Shaniv Paper Industries was established
in 1990 in Ofakim and currently employs over
160 workers. In 2007 the company became the
country’s second largest tissue product
manufacturer. Shaniv’s base paper production
is household toilet paper, paper towels and
napkins, including parent rolls of tissue
and crepe toilet paper, kitchen towels and
napkins made from virgin and recovered paper
on two Valmet machines, with total output
of 30,000 tons reported in 2007. The company’s
sales grew 13% in 2006 over 2005 due to the
effort of new management team assertively
directing the company to the tissue retail
segment and investing over $12 million in
new equipment and upgrades.
Shaniv Paper Industry entered the consumer
retail tissue market in the beginning of
2006 and by the end of the same year it had
11% of the market, lagging far behind Hogla
and Sano. However, Shaniv's marketing campaign
has proven to be effective and, according
to estimates by Greol Engineering, by the
end of 2007 the company’s market share
increased to 20%. The market share increase
took place despite the fact that Shaniv's
products were not widely marketed by the
major Israeli supermarket chain SuperSol
and sold mostly by discount food outlets.
Some time ago Shaniv was caught up in an
unusual tissue marketing war with Hogla Kimberly
that was being waged some time ago in the
ultra-Orthodox segment of Israeli population.
Rumour has it that the call for a boycott
of Hogla products was coming from its competitor,
Shaniv Paper Industry, which markets Lovely
and Touch brands products primarily to the
ultra-Orthodox Israelis. The main cause of
controversy is that Shaniv is closed on the
Sabbath [the Jewish holy day], while Hogla-Kimberly
operates 24/7, practising worldwide tissue
mill procedures. Shaniv vehemently denied
the rumors. However, its marketing campaign
is based on Sabbath observance and its brands
have been endorsed by rabbinical councils.
JORDAN
With a population
about 6 million, Jordan represents only
1.5% of total MENA region residents (Middle
East and North Africa’s
Arab countries including
Iran and excluding Israel and Turkey). This
country has rarely been thought of as a major
tissue supplier. However, Jordan benefits
from a central location in the area, educated
work force and the political environment
that encourages economic reforms and environmental
approach.
Currently Jordan is Number 3 tissue producer
and exporter in the region after Egypt and
Saudi Arabia. The growth of tissue demand
in Jordan emulates a general portrait of
the MENA market development. Salim Karadsheh,
CEO of Nuqul Group, disagrees with the conventionally
published growth forecast of 10%-15%. According
to him, the real growth numbers should be
somewhere in the range of 3.5-5.5% . The
recent growth of both foreign and domestic
investments in the paper processing and converting
equipment might help to bring the tissue
industry of this country to the world level.
Last year Jordan stepped up tissue production
launching a state-of-the-art Advantage DCT
200 machine from Metso at its Al Snobar mill
near Amman. It will add 54,000 tons/yr of
capacity to Nuqul Group tissue output. Nuqul
Group invested over $100 million in this
project, which includes cogeneration power
plant and modern treatment facilities. Al
Snobar is operating next door to the Group’s
32,000 ton/yr Voith PM at Al Keena mill,
which also produces tissue parent rolls.
Nuqul Group owns a unique market position
with its presence in 45 countries and production
sites in Egypt, Jordan, UAE, Lebanon, Saudi
Arabia, Yemen and Sudan.
Jordan a country where the majority of
the population practise Islam, has a tissue
market breakdown typical of Middle East countries.
Almost 65% of its market is facial tissue.
Toilet paper comprises less than 25% of the
market (in Israel this segment makes up over
60%). Muslims favor the use of water over
tissue for bathroom hygiene, following religious
traditions that Islam introduced long before
tissue was invented. Tissue is used more
for drying than for wiping. Jordanian tissue
consumption is estimated at about 15,000
tons/yr.
Supermarkets and groceries in Jordan are
stocked with facial tissue boxes, most commonly
as a six pack. However, larger packs of 36
boxes have been gaining acceptance in the
major supermarket chains such as Safeway,
C-Town, Carrefour, Top & Top and Happy
Family. This growth has led to intense competition
and has encouraged small converters to enter
the market.
The growth of tissue consumption in the
Middle East may be driven by different forces,
but the most significant change will come
after the region finds peace and can therefore
create consumer markets tied to growing prosperity.
Fine Hygienic Paper Company (established
in1959) is Jordan's leading supplier of facial
tissue, toilet paper and kitchen towels and
a part of Nuqul Group, which is the largest
tissue producer in the Middle East. The company,
which has 70,000 tons/yr of tissue converting
capacity, is ISO- 9001 certified and employs
nearly 1000 people.
Last year Fine ran a promotion campaign
to organise voting for the city of Petra
as one of the new Seven Wonders of the World.
The vote was implemented via SMS and was
very successful, assuring the prestigious
title for Petra. As a part of this promotion,
Fine launched a new product in the form of
a tissue box decorated with images from Petra.
The brand name Fine takes the eighth place
on the Forbes list for the 40 leading brand
names of the Arab world and brings the company
leading market status.
Last year Fine announced the introduction
of a new line of facial tissues in the Middle
East developed in partnership with Walt Disney
Company and targeted at children. Several
years ago a similar marketing approach between
Kimberly-Clark and Walt Disney Company for
facial and pocket tissues proved to be very
successful in Thailand. The Fine-Disney tissues
come in an exclusive three-dimensional packaging
set of five boxes with the popular Disney
characters - Donald Duck, Daisy Duck, Mickey
Mouse, Minnie Mouse and Goofy. Each tissue
box comes in different colours and with innovative
dispensing features.
Tissue converting in Jordan is fragmented,
with several small-scale producers with 2000-3000
ton/yr capacity and only one dominant manufacturer
- Fine Hygienic Paper. Located in the capital
city of Amman, Soft Hygienic Paper is one
of the privately owned tissue converters
in Jordan. The company employs nearly 180
people and produces a variety of own-brand
toilet paper and handkerchiefs.
Jordanian tissue products are present in
Palestinian supermarkets and groceries along
with locally converted ones. The most recognised
regional supplier National Paper Product
from Ramallah ($4.5 million turnover, established
in 1985, capacity 2,500 tons/yr) is a producer
of toilet paper, facial tissue, towels, handkerchiefs
and away-from-home tissue products (brands
Softy and LaChef).
Jordan can serve as an example of a pragmatic
approach in its relationship with Israel.
For the last five years the popularity of
Jordan’s “Wonder of the World”,
the ancient city of Petra, has been skyrocketing,
bringing groups of tourists from around the
world. The hotel industry in the Petra region
is driving tissue consumption. Major international
hotel chains recently entered the area near
Petra, raising employment and developing
infrastructure.
A significant share of those tourists comes
from Israel benefiting
from recent mutual
diplomatic agreements with Jordan. TW
