Portugal currently produces approximately 150,000 MT/Yr of Towel and Tissue (T&T) paper. That makes Portugal eleventh largest T&T producing nation in the European Union (EU) with about 3% of the EU capacity. Portugal was experiencing modest growth coming into the worldwide recession of the last three years. Two new machines were added in the last ten years. The last of these new machines was added in 2009, just as the recession started in earnest. Portugal’s cost position suggests it may be poised to enjoy growth again as the EU and Portugal’s economies improve.
Portugal is home to more than 10 million people with an economy that is 51st in the world. The Portuguese economy has been diversifying with increasing movement toward the service sector. The economy had been growing through the 1990s but fell back in the 2001-2008 period. In 2009 there was a significant contraction of 2.9%. 2010 seemed to improve somewhat with growth of 1.3% but that was short lived and in 2011 GDP fell again when government-imposed austerity measures were implemented. Economic uncertainties persist as Portugal attempts to deal with deficit reduction balanced against the need to stimulate growth.
Geographically, Portugal’s T&T mills are dispersed in the northern two thirds of the country clustered in pockets with mills producing other pulp and paper grades (Map 1). The country ranks eleventh among the 19 T&T producers in the EU (Figure 1) and ninth in the number of operating machines, equal to the Netherlands and Romania (Figure 2). T&T machines in the EU vary from narrow two-metre machines to six metres. The machines in Portugal are
all on the narrow end of the trim range for the region, with the average being 2.5 metres (Figure 3). Mill production in Portugal is, on average, on the low side compared to other mills in the EU at less than 50,000 MT/Yr while the technical age of Portugal’s machines is lower than average at 16 years (Figure 4). Fibre mix in Portugal’s mills is a 60/40 balance of recycled fibre to market virgin pulp, a deviation from the larger producing countries that rely more heavily on market pulp (Figure 5). While recycled fibre is present in most countries, it is not in heavy use by major producers. Integrated recycled fibre does provide some smaller producing countries an advantage over the purchased fibre consumed by larger producing countries. Portugal’s cost position in the EU is advantaged by the integration of recycled fibre in its furnish mix (Figure 6).
Portugal’s T&T machine production rates are evenly dispersed on the low end of EU production rates. Machines range from the very smallest (producing
less than 10,000 MT/Yr) to moderate levels producing in the 40,000 MT/ Yr range (Figure 7). Machine trims are narrow with 75% in the 2.5m class and 25% at less than 2.5m in width (Figure 8). Machine speeds are fairly well distributed with about an equal number of machines in the low end of 500-1,000 mpm and in the high end of 1,500-2,000 mpm. All of the machines are classified as less than 2,000 mpm (Figure 9). On the international scale, Portugal’s machines tend to mirror the EU average capacity and average ages for the lower capacity population of machines (Figure 10). A noteworthy observation is that Portugal’s T&T business is primarily locally owned with one mill owned by a company headquartered in neighbouring Spain (Figure 11).
The source for market data and analysis in this article is FisherSolveTM. Data tables behind Figures 1 – 11 can be obtained from Fisher International. E-mail requests to [email protected].