With no new tissue capacity added since 2014 and a tissue trade balance heavily dependent on imports, the heavy reliance on recovered fibre will require a structural realignment if the consumer swing towards “pure and clean” products continues. Report by ResourceWise Senior Consultant Bruce Janda.
When this column last examined South Korea in 2023, it traced the country’s long recorded history, dating to about 2300 B.C., and noted an economy built largely on manufacturing and trade after its separation from North Korea. At the time, South Korea was emerging from the Covid-19 pandemic while contending with higher energy costs tied to Russia’s invasion of Ukraine. Those pressures have since intensified, as continued attacks on Russian oil refining and distribution linked to the war in Ukraine, along with the closure of the Strait of Hormuz, have pushed energy costs higher. Meanwhile, new US tariff regimes have disrupted global trade. Although tissue production has never been a major pillar of South Korea’s economy, the sector is now facing mounting headwinds from an ageing population, rising pulp import costs, and higher energy expenses.
South Korea’s tissue production footprint remains relatively concentrated, as shown in Figure 1. The country has 15 tissue-producing locations, several of them clustered within the same cities, and are difficult to distinguish on the regional map. Those sites are controlled by 10 producers: two publicly traded companies and eight privately held firms. Among the private operators is Yuhan-Kimberly, a Kimberly-Clark joint venture. Yuhan-Kimberly enjoys the largest market share at about 29%. Like Kimberly-Clark’s partnerships in Mexico and Bahrain, however, Yuhan-Kimberly is not included in the new venture between Suzano and Kimberly-Clark.
The expanded map underscores South Korea’s strategic position between Japan and China, while several other regional tissue-producers – including Indonesia, Thailand, Vietnam, and Malaysia – sit just beyond the frame.
South Korea appears to have the economic base to support continued tissue demand, as Figure 2’s population and GDP (PPP) trends suggest. But the headline indicators do not fully reflect the strain of a rapidly ageing population or the fiscal pressure that demographic shift is placing on the country. Consumer behaviour is also diverging: higher-income households are increasingly turning to online, warehouse-style bulk purchases, while lower-income shoppers are relying more on smaller purchases through convenience stores. Private-label tissue, led by Yuhan-Kimberly, has gained traction in that shifting market.
GDP (PPP) is forecast to expand by roughly 2% annually in the near term, with much of the growth expected to come from high-tech exports.
Inflation has begun to move higher, as Figure 3 shows, and the pressure could persist as energy and raw material imports absorb shocks from strained global supply chains. Unemployment remains low, partly because South Korea’s ageing population is shrinking the workforce. For domestic tissue makers, that combination is accelerating investment in manufacturing and packaging automation, along with projects aimed at reducing energy use. Even so, rising cost pressures could leave South Korean producers less competitive than regional rivals such as Indonesia.
South Korea’s tissue trade balance has shifted sharply over the nearly two-decade study period. Imports have climbed almost twentyfold, while exports reached their high point in 2019. Figures 4 and 5 show the import and export trends on the same Y-axis scale, underscoring the widening gap between the two. Today, tissue imports are roughly nine times the level of exports. Indonesia and China are the two leading sources of tissue imports.
New tissue-machine investment has been limited over the past two decades compared with other developed markets, as Figure 6 shows. Commercial and specialty tissue each recorded one machine shutdown during the period. Consumer tissue added one machine in 2007, 2011 and 2014, while 2013 marked a larger replacement cycle with five new consumer-tissue machines. The segment also lost one machine in 2008 and two more in 2015. No additional machines have been announced, and South Korea has not added new tissue capacity since 2014.
Figure 7 breaks down South Korea’s tissue output by finished product and fibre source, revealing an industry that relies heavily on recovered fibre across nearly every product category. The red bar segments underscore that dependence. The approach could become a vulnerability as consumers place greater emphasis on “pure and clean” products and scrutinise chemical additives more closely. If South Korean buyers were to adopt concerns similar to those seen in China over recycled fibre in products used in direct human contact, producers could face pressure to shift their furnish mix. With limited domestic forest resources, however, South Korea must import virgin baled pulp, raising the possibility that mills will look to domestic non-wood fibre sources to offset some of those costs.
Consumer bath tissue dominates the country’s tissue output, with volume far exceeding all other formats combined. That segment also uses eucalyptus fibre, along with smaller amounts of northern softwood and bleached non-wood short fibre—an indication that these furnishes are likely used in premium, higher-softness grades. Consumer facial tissue contains higher levels of eucalyptus fibre and some recovered fibre, while commercial napkins, commercial bath tissue and consumer towels are produced largely from recovered fibre.
Commercial tissue remains a relatively small part of South Korea’s production base compared with markets in North America and Western Europe. Commercial napkins are the notable exception, standing out as the strongest segment within the country’s away-from-home tissue mix.
A comparison group of Australia, China, India, Indonesia and Japan was selected to benchmark South Korea’s tissue-production base against current trade partners and potential lower-cost competitors. Figures 8A and 8B use bubble charts to compare tissue-machine quality, with bubble size indicating production capacity. In both charts, the X-axis shows average technical age. The Y-axis differs: Figure 8A plots average machine speed, while Figure 8B plots average machine width. Although analysts typically use one measure or the other to illustrate machine capability, this review includes both because speed and width together reveal wide differences in productivity across the group. Those same factors are also reflected in the average tissue-machine viability analysis shown in Figure 10.
China operates the newest tissue machines in the comparison set, with India and Indonesia close behind. South Korea, Thailand and Japan have the oldest fleets on average. Indonesia and Australia also benefit from faster and wider machines, creating a productivity advantage that spreads labour and overhead costs across more tons of output. That advantage could become increasingly important as South Korea and Japan contend with shrinking, ageing populations and tighter cost pressures.
Figure 9 shows how sharply tissue-production costs vary across South Korea’s regional peer group, with each bar measuring average cash cost per ton and its width reflecting production capacity. Australia and Japan occupy the highest-cost positions, while South Korea sits slightly below China’s average. Indonesia stands out as the region’s clear low-cost producer. Energy, shown in the yellow bars, is already exerting an outsized influence on the cost picture, even though the underlying estimates were developed before the Iran war.
Figure 10 shifts the comparison from immediate cash costs to a broader test of long-term competitiveness, measuring the average viability of tissue machines across several countries. The FisherSolve model factors in estimated capital requirements, production costs, machine size, technical age, local economic risk by grade, internal company risk, manufacturing competitiveness, tons produced per unit of trim and export fees. Taken together, those indicators offer a five-year view of which tissue fleets are best positioned to compete.
By that yardstick, South Korea’s tissue fleet ranks as the second weakest in the group, ahead of only Japan; higher scores signal lower viability or greater risk. The country is weighed down by higher capital requirements and production costs than most regional competitors, while Indonesia benefits from a lower-cost base and lighter capital needs. Figure 12 adds an emissions dimension to the same competitiveness story.
Figure 11 shows a focus on energy costs per ton of the comparison set. This chart breaks energy costs into steam, electric power and direct fuel. The figures were measured in early 2026, before the Gulf war, and could shift significantly as regional energy markets respond. Indonesia holds the lowest energy-cost position per ton, while South Korea and Japan sit at the high end. That spread provides important context for the viability comparison shown in Figure 10.
Figure 12 adds an emissions lens to the regional comparison, showing Scope 1 emissions from on-site fuel use in red and Scope 2 emissions from grid electricity in tan, each measured per ton of finished tissue. Scope 2 results depend heavily on the carbon intensity of the local power grid. Indonesia benefits from a relatively low-carbon grid and lower fuel-related emissions, helped by a larger share of tissue machines located at integrated pulp sites where heat and electricity can be generated from carbon-neutral biomass.
China remains the region’s largest source of tissue-production emissions, both in total carbon released and in emissions per ton of tissue produced. Much of that output is tied to the electricity grid supplying production sites. Thailand, India, Australia and South Korea also sit near China’s carbon-intensity level, underscoring how power and fuel supply can shape the environmental profile of tissue manufacturing.
