Global tissue market continuing its strong growth, but Europe struggling
Global tissue business has recovered well from the 2009 recession, but recent economic and political turbulences have disturbed the return to normal business conditions in some regions. Europe’s desperate attempts to save the common currency and avoid Greece’s insolvency with its obvious drastic consequences to the whole European financial state have caused uncertainties in economic circumstances, with reflections to be seen in the tissue business as well. The political turmoil during 2011 and the still ongoing protests for creating more democracy continue to hamper tissue business expansion in a number of countries in the MENA region.
However, globally tissue consumption has shown sound growth rates after the moderate expansion of only 1% in 2009. RISI’s latest updating of global tissue statistics show a global growth rate of 4.1% for 2010. The data for 2011 is still preliminary but suggest that growth of 3.7% may have been reached, down from 2010 mainly because of weak volume increases in North America and Western Europe. It should be noted that the global economy reached 5.0% growth in 2010 while growth in 2011 remained weaker – below 4% (our current estimate for 2011 is 3.8%, but revisions may follow).
Global GDP growth is expected to remain weak this year (3.4%), with Western European GDP probably declining slightly, and then recovering to 4.5% in 2013. Our expectations for global tissue growth are slightly more optimistic than for economic growth, supported by the continuing strong growth phase in China, Latin America, Russia and a number of emerging economies in the Middle East and Asia- Pacific regions. We expect global tissue consumption to grow by approximately 4% or slightly less this year, and accelerate to almost 4.3% in 2013, in line with improving economic growth prospects.
‘In Eastern Europe, Russian tissue consumption continued on its strong growth trend, but as a whole, Eastern European countries showed growth of less than 5% in 2011, somewhat below their long-term trend.’
The US tissue market was a small disappointment in 2011, with total growth not exceeding 1.1%, and this is more or less the final figure as only marginal revisions in foreign trade figures can be expected. Canadian final tissue production is missing but market research company audits and other industry reports indicate a growth of close to 2% in 2011. In 2012-2013, we expect North American tissue market growth to return to its long-term trend of 1.6-1.7%.
Final production figures for Western Europe were still missing at the time of writing, but current part-year statistics do not suggest growth stronger than 1.2-1.3%. Revisions are possible, as we would like to once again claim the poor quality of available preliminary statistics. The UK market was a positive surprise with growth of more than 4% while German 2011 tissue consumption, based on current data, shows a small decline (this is more evidence that tissue does not strictly follow short- or medium-term economic variations). Southern Europe was suffering from poor economic trends and high unemployment, but still performed at a rather stable level. The outlook for 2012 with the expected GDP decline is not promising and tissue consumption will continue its moderate growth. In Eastern Europe, Russian tissue consumption continued on its strong growth trend, but as a whole, Eastern European countries showed growth of less than 5% in 2011, somewhat below their long-term trend. Many Central and Southeast European countries suffered from the same problems as Western Europe.
‘In Latin America, Brazil has recently shown unexpected strong developments. The preliminary figures suggest consumption growth of approximately 7.5% for 2011. For the whole of Latin America, our current growth figure for 2011 is 5%.’
In Latin America, Brazil has recently shown unexpected strong developments. The preliminary figures suggest consumption growth of approximately 7.5% for 2011. For the whole of Latin America, our current growth figure for 2011 is 5%. The average is pushed downward by obvious weak developments in Mexico, although the statistics for the latest months of 2011 are not yet available and are based on our estimates only.
The Near and Middle Eastern region suffered from the instable political atmosphere in 2011, although not all countries were affected. Turkey is continuing on its good growth trend, and tissue consumption in Iran seems to finally be in the takeoff phase, despite the economic and financial sanctions set by the UN and Western countries due to Iran’s secretive nuclear power programme.
Japan suffered from the effects of the earthquake and tsunami, but the tissue market was not influenced and showed a growth of 0.8%, which is a very typical trend growth for the country. It is to be noted that tissue imports grew strongly and exceeded 100,000 tonnes in 2011.
China’s market continues its strong expansion with tissue business rapidly expanding to China’s inland and northeastern provinces. The final production figure is still missing, but we expect market growth to have remained at about the same growth level of close to 10% as recorded in 2010. The slightly surprising issue is that Chinese tissue exports declined from 505,000 tonnes in 2010 to 495,000 tonnes in 2011. Exports to the USA declined most significantly.
In the Asia-Pacific region, developments were somewhat mixed depending on country. From the largest markets, South Korea recorded unexpected strong growth of 5.5% and Taiwan 3.5%, while Australia suffered from production declines due to two K-C tissue PM closures, which import growth was not fully able to compensate for. Australia’s tissue imports from Indonesia were suffering by the sustainability debate, and these lost tonnages were only partly replaced by increased volumes from China and other Asian countries.