Focus on Russia
History in the making
Russia’s historic Syassky mill has market share in its sights. A TW report.
Syassky Pulp & Paper Mill was one of Russia’s first domestic pulp and paper producers when it was established near St Petersburg in 1928. This pioneering spirit lives on 84 years later with the installation of a new 125-tonne/day, 4200 mm-trim Toscotec Ahead 1.5m tissue line which started up in January this year. This follows the investment of a Toscotec rewinder in 2009 which was installed in preparation for the new tissue machine. Another new rewinder from the same supplier is on order, which suggests that yet another tissue machine is a distinct possibility. Syassky’s might have a distinguished past, but it is one of the most modern paper businesses in Russia’s dynamic, industrialised north west region, and its focus is very much on the future.
Syassky has recently re-organised as a joint-stock company, which has enabled the financing of these and other major investments in the mill. The pulp and paper mill has another distinction – the clue is in the mill’s name. While many tissue mills have a deinking facility to supply their tissue machines with pulp, and some even produce some of their own virgin mechanical pulp,
Syassky has its own chemical pulp production line to feed its three tissue machines. This makes the single-mill enterprise the only integrated tissue producer in the region.
The main market for tissue in Russia is for a relatively basic product, bought by customers that are very price-sensitive. So the key to gaining market share is to produce large volumes as efficiently as possible, competing with other big players in the region such as Syktyvkar Tissue Group and SCA. But while price is very important, features such as softness and absorbency are becoming more influential for the Russian consumer, and brand awareness is also a significant factor, particularly in certain urban markets.
As you might imagine in such a vast country, regional differences exist. In St Petersburg – Syassky’s local market – and Moscow, where living standards are higher than in other cities, consumers prefer a higher grade of tissue and are prepared to pay for it. In these cities, consumption is 5-6kg per person per year. This is of course not a huge amount: it is quite modest in fact by European standards. But in the provinces, consumption is only 2-3kg per person per year and the market has, if anything, shifted towards cheaper products. So there is considerable potential for growth throughout the Russian market, in terms of both quality and quantity. “Syassky’s aim is to command 30% of the Russian market,” says project technical manager at the mill, Dmitry Epifanov. This is up from the present 21%, according to market research company AC Nielsen.
‘There is considerable potential for growth throughout the Russian market, in terms of both quality and quantity.’
So Syassky’s investment is not just about volume and cost per tonne. Russia’s annual tissue consumption growth rate of 7-8% has been accompanied by a step-up, in certain markets, from the most basic, poor-quality, single-ply product to multi-ply tissue of higher quality, often sold in multi-packs with strong visual identity. Syassky has recognised the importance of characteristics and not just price in its branding – the company’s trade mark “Myagkiy Znak” literally means “Soft Sign”.
AT THE HEART OF THE PROJECT
The 1,400m/min Toscotec crescent former tissue machine is Syassky’s latest project and can produce tissue between 14 and 35g/m². It has replaced a troublesome old PM with fourdrinier forming section and occupies the same building. The new machine has a single-layer headbox, TT SPR 1050 single press configuration, 12ft (3.6-m) TT SYD Steel Yankee Dryer with high efficiency hood and a TT Reel-P reel. The machine has been specified for minimum energy consumption rather than outright speed. Production is mainly focused on the 16 – 24g/m range, most of which is toilet tissue, although kitchen towel and facial tissue and napkins also feature in Syassky’s range.
Syassky says water consumption is down by 60% compared with the old PM
It is early days, but it is already possible to chart improvements following the machine’s start-up: Syassky says water consumption is down by 60% compared with the old PM, while steam consumption is as before, but with double the productivity. It is also possible to operate the machine with one fewer operator per shift compared with the previous machine.
The mill’s aim was to improve formation (and therefore quality) and capacity. The original machine could not achieve basis weights below 21g/m² either, so range and efficiency have also benefited: a lighter tissue can perform equally well and is better suited to multi-ply applications, but is, of course, more efficient to produce.
The tissue line installation comes on the back of considerable investment in converting at Syassky. Epifanov says: “During the last four years we have invested more than $20m in converting. At the moment we have four converting lines – three Gambini and one Perini – for toilet paper and kitchen towel – with a capacity of more than 60m rolls per month. We also have two converting lines from Omet and a total capacity of more than two million packs per month. Future investments in converting will depend on the market situation.”
It is clear that urban Russian consumers in the country’s wealthier areas are keen to use a better quality tissue, and more of it. The pace of change in the rest of the country is less clear, but Syassky has addressed the most important success factor – efficiency. So whatever the market dynamics, it can respond to them competitively.