Tissue World Magazine
Alexandra Stuthridge, Technical Business Manager, BioProducts Institute (BPI)

The Mexican pioneer will target AfH to keep ahead of a tissue market growth trend up to 4.5% annually. By Helen Morris, Senior Editor, Tissue World magazine.

It was no surprise when the world’s first Advantage NTT tissue line was started up by a Mexican company in 2013. Located in Mexicali on the Mexican/US border, TWM speaks to PSF operations director Dario Palma y Meza Espinoza and sales and marketing director Juan José Helú Villavicencio to get the latest.

TWM/1 What have you invested in 2017/2018 and why?
Palma: “We invest in every sector – At-Home, AfH – when sales volume demands. Last year we invested in paper machine capacity to support our sales and converting growth. Our new No. 7 tissue machine started up on 30 January 2018.  Last year we also invested in commercial (At-Home), bath and towel converting capacity for the same reason. Our new converting plant in the city of Monterrey, Mexico, started up production with two bath and towel converting lines and one napkin converting machine in March 2017. This year we are investing in commercial (At-Home) napkin converting capacity and in AfH bath and towel capacity due to sales demand.”

TWM/2 What main trends are you seeing in the Mexican tissue market? Is it growing, and why?
Helú: “The growth trend as we’ve seen for the past few years is between 4% – 4.5% annually. Tissue is a commodity, and growth is in concordance with population and income. We believe our focus must continue to be on the AfH market because, beside Kimberly-Clark Mexico (KCM), the main competitors in the Mexican market are not the big global tissue manufacturers. This means there’s an excellent opportunity for us to become the natural choice to KCM to supply the market.”

TWM/3 Are you seeing an increase in private label products in Mexico?
Helú: “The sale of private label products is growing faster than the regular ones because every retailer with buying power is looking for a share of the market with their own brand to increase the profit margin. We are a big supplier in the PLP market and we are investing to get closer to the big retailers to provide a better service for growth.”

Product Variety
Product Variety

TWM/4 Has there been much merger and acquisition in the Mexican tissue market recently?
Helú: “The last M&A activity in Mexico was KCM buying GP’s assets for the AfH market about five years ago. It’s very difficult to forecast more because the main suppliers are global companies.”

TWM/5 How is the Mexican economy impacting the tissue market?
Helú: “The main impact is not on sales, but on profit margins. Everyone is losing margins, both the retailer and supplier.”

TWM/6 What opportunities are there for you in terms of Mexico’s population and demographics?
Helú: “The population grows around 1.3% every year, but the core of sales is still in the economy products market. However, everyone is trying to make a difference with better quality at the same price level.”

TWM/7 Are you looking to grow further, and if so, how?
Palma: “We are always looking to grow further. At this moment, we are only considering growing by more machinery investment as needed.”

TWM/8 What are the main opportunities and challenges for you in the next few years?
Helú: “To maintain the pace of the huge investment required to grow at a higher rate than the market.”

Investing in response to customer demand: PSF has invested in every sector when sales volume demands
Investing in response to customer demand: PSF has invested in every sector when sales volume demands