SWEDISH T&T machines are competitively-sized but showing their age
Sweden is the third largest country in western Europe occupying 450,000 km2. Fortunately for the pulp and paper industry Sweden is also rich in forest with 50%+ of the country forested. In spite of its size, the country is modestly populated, ranking 90th worldwide with a little over nine million people. The majority (85%) of the inhabitants are urban dwellers, explaining why the economy is driven more by manufactured goods, paper production, iron/steel production and pharmaceuticals than agriculture goods. Less than 10% of the land is under cultivation.
Sweden is a major producer and exporter of pulp and paper products with annual production of nearly 16m metric tonnes.
Towel and tissue (T&T), however, is a minor player representing about 2% of the annual production (Figure 1). The paper industry in Sweden has developed in the southern and eastern coastal regions of the country. Not surprisingly, these areas are also the most populated and the same area where the T&T mills are located (Figure 12)
Comparing Swedish T&T machines to regions around the world reveals a competitively-sized, but somewhat aged equipment base. Nearly half of production is coming from machines more than 40 years old (Figure 2). There has been re-investment to maintain technical competitiveness, but Sweden lags all other regions except North America with an average technical age of 25+ years (Figure 3). T&T machine trims are on a par with all regions except North America, which has the widest machine base in the world (Figure 4). Machine speeds in Sweden rank with the fastest machines in the world, exceeding machines in most regions (Figure 5). With competitive speeds and trims, the Swedish T&T machines pull average production rates very competitive with all regions except the widest machines in North America (Figure 6).
World competitiveness is one thing, but T&T markets tend to be more local than global. Sweden’s competition would tend to be within EU countries, particularly the north western areas. Swedish T&T production is slightly more than 40,000 mtpy, ranking it 11th in annual production within the EU (Figure 7). The distribution of machines in the EU (Figure 8) and the range of machine trim go a long way to explain this production position. Machines are largely narrow averaging in the three metre class with some even more narrow. Unlike all other major producing countries, there is a lack of wide five metre or greater machines (Figure 9).
Sweden’s cost position is also somewhat disadvantaged in the EU. European producers in general tend to be heavy users of purchased pulp. Sweden is similar to other countries giving up cost advantage to mills with higher degrees of integration (Figure 10). Labour costs are also somewhat higher than many of the competing countries.
Recycling does play a significant role in Sweden as it does in many other EU countries, making up nearly 50% of fibre consumption (Figure 11). Within the EU there is significant variation ranging from 100% recycle in the Netherlands and Lithuania to all virgin pulps in Belgium.
Fisher International, a consulting and information services firm delivering business and market intelligence to the pulp and paper industry, is pleased to be a regular contributor to Tissue World Magazine. Information contained in these graphs and charts come from the extensive pulp and paper database and cost benchmarking tools contained in FisherSolve™. FisherSolve is a Business Intelligence Automation System (BIAS), and serves as an innovative platform that integrates a company’s internal information with high-quality data on the marketplace and competitive environment. FisherSolve’s database describes every mill in the world making 50 TPD or more. The software is unique in its ability to serve sales, marketing, product development and management for both strategic planning and tactical implementation. FisherSolve is just one service Fisher offers to the pulp and paper industry. www.fisheri.com or email us at [email protected]heri.com