12_octnov_FEATURES Tissue World Project Survey 2012

Tissue World projects survey 2012

China leads the way claiming 69 of the 114 announced projects

Click here to download Project Survey Table

Despite recessionary climes that continue to impact much of the world, the last 12 months have still seen a substantial amount of announced tissue capacity expansions. This comes as no surprise when the global growth across the industry increased up from 4.1% in 2010 to 4.3% in 2011, and 4.1% in 2012. This isn’t expected to slow down: growth is expected to continue to 4.5% in 2013 and 4.6% in 2014, showing that tissue products continue to be a vital part of everyday life in an ever increasing number of countries around the world.

Research for this survey included asking machinery suppliers about their present and future developments and the response charts new capacity being added, ordered or in final planning stages in 2012-2013. All the figures in the survey are based on the best information provided, and are subject to revision as, in many cases, information was not provided because it was deemed commercially sensitive, or subject to financial uncertainty. It’s also the case that a distinctive feature of this time in the cyclical development of tissue production is marked by the timely closure of old facilities to make way for the new. Additionally, many projects have also been delayed, as in some cases the prospect of overcapacity begins to shape the market. A considerable number of companies also issued projections for impressive tpd figures, which will add, in the terms of the survey, unknown capacity.

‘By most accounts the normal growth rate is back on track after a small break.’

According to the confirmed details in last year’s graph, it was expected that approximately 3.4m tonnes of new capacity would come on stream between 2011-2012. Some of those projects planned for start up in 2012 have seen delays, and some of the ‘new’ capacity announced this year in fact includes some of last year’s estimate. Taking that into account the suppliers’ re-adjusted figure reveals approximately 1.7m tonnes of new annual capacity up and producing in 2012. Next year, a further 1m is already earmarked to come on stream.

By most accounts the normal growth rate is back on track after a small break due to the recession in 2009, averaging 4.3% in 2011/12. More and more of this growth is increasingly focused on emerging markets with China and Latin America showing the best prospects, according to Esko Uutela, principal, tissue, RISI. And the scale of these machines is also significant – a large proportion of these new start-up machines have widths of 5.6m. Unsurprising, China leads the way.

Recard’s Marco Ginesi, doctor in mechanical engineering, said he expects similar results in 2013, since the world of tissue “is still in good health”. “We are following two to three hot projects which should be finalised on 2013,” he added.

‘The recession continues to impact many parts of the world, but despite this, the tissue sector remains largely in good health.’

Davide Mainardi, Toscotec sales and customer care director, says he isn’t surprised about the results of this year’s graph, since in the last few years many projects have been on the pipeline. “The effect of post 2009, when the decrease of pulp and energy costs created new revenues for tissue producers, are clearly justifying the investments. The numbers show the boom in investments is still effecting some BRIC countries, mainly Brasil, China, Russia, and especially the Asian and South America continents.” He added that Europe is still suffering the global economical crisis and the new assets of recent acquisitions. “North America has still to be viewed as a premium products market even if we see some opportunities for private label products and AfH. We believe that this product is also of high interest in Europe in the future.

Raw materials and energy will be the main driver and key factors of the investments and the variation of the costs of these two elements will continue to dominate the decision of many projects.”

On the trends in the tissue market on the past year, Katarina Åhsberg, marketing manager at Metso Paper, said: “Several tissue machinery investments planned for start-up late 2011 early 2012 has been deferred for some time, especially in China. However, we are now seeing projects moving ahead again and the market perspective seems to be generally optimistic.”

It is clearly still an uncertain market with a mixed picture of start ups and closures across the world. The recession continues to impact many parts of the world, but despite this, the tissue sector remains largely in good health.

All aggregates taken from the survey should be treated with some caution. While all care has been taken to publish comprehensive data, it is inevitable that projects will be missing or details incomplete. We welcome your help to ensure as comprehensive a survey as possible in 2013.