Among trading partners, the UK has the oldest tissue machine fleet and highest production costs. Now, with European companies largely replacing American predecessors, new machine investment and domestic capacity are set to rise, as imports are set to decrease. Analysis by Bruce Janda, Senior Consultant, ResourceWise.
Until about 25 years ago, North American companies such as Scott, Kimberly-Clark, Fort Howard, and James River significantly shaped the tissue market in the United Kingdom. Their influence led to a blend of consumer tissue culture between Europe and North America, particularly in product designs and advertising. Currently, only Kimberly-Clark remains, and continental European companies have taken over the ownership of the other American companies.
From 2007 to 2021, domestic tissue production capacity decreased by about 18%. However, the tissue industry is now in a renewal phase, with new machine investments underway, and capacity expected to increase through 2027.
A map of operating tissue mills is shown in Figure 1. The mills are a mix of recycled integrated sites and non-integrated mills using purchased virgin fibre. It’s important to note that the United Kingdom does not produce virgin fibre.
The United Kingdom has recently held an election that resulted in a shift in power, amidst significant concerns about the economic trajectory. However, conditions to support tissue demand are still favourable. As illustrated in Figure 2, the population is increasing at an estimated rate of 0.45% in 2024, supported by immigration. The growth of GDP per person (adjusted for purchasing power parity), shown as a blue line, recovered after the Covid-19 pandemic, but growth slowed in 2023 and is expected to continue this trend.
Figure 3 shows the United Kingdom’s unemployment recovery since the Great Recession, represented by the yellow bars. Although inflation, depicted by the blue line, has declined rapidly since 2022, consumers still feel its shocks. These statistics suggest good support for ongoing consumer demand. However, they seem to overlook the concerns raised during the recent election cycle.
The long-term decline in tissue capacity led to a doubling of tissue imports, which peaked in 2021 due to pandemic-related closures. Tissue suppliers shifted from France and Belgium to Türkiye and China, though France and Germany continued to play a role in the supply chain. As later discussed, and illustrated in Figure 6, the volume of tissue imported is expected to decrease as new domestic capacity comes online.
Imports represent about 20-25% of the import rate in Figure 4. Figure 5 shows tissue exports from the United Kingdom. Ireland remains the largest export market for tissue from the United Kingdom, followed by Germany and France.
Figure 6 shows the changes in the number of operating tissue machines. The net count of tissue machines fell by eight from 2007 to 2021. FisherSolve shows new machines added in 2022 and 2024, with additional expected new machines in 2025 and 2026. The net effect will be a return to 2007’s number of machines, but replacing newer and larger capacity equipment will result in an over 40% overall capacity increase versus the peak production capacity in 2007.
The current tissue production in the United Kingdom consists of 60% integrated recycled fibre and 40% virgin imported pulps, as shown in Figure 7. Notably, there are no virgin pulp mills or integrated virgin tissue sites in the UK. Almost 25% of tissue production employs advanced processes, specifically TAD technology, which was introduced by American companies.
Figure 8 shows a breakdown of tissue finished products by production volume and average fibre types. Consumer bath tissue represents 69% of production. About half of this production is based on bleached eucalyptus fibre augmented by recycled fibre, northern softwood, and northern hardwood.
Consumer towels are the second largest category, using northern and southern softwoods, eucalyptus fibre for softness, and some recycled fibre. Commercial bath is the third largest product type, using over 50% recycled fibre. Consumer facial tissue follows closely in volume but uses over 50% eucalyptus fibre. These fibre applications are as expected, but the almost 60% eucalyptus fibre in consumer napkins was surprising and suggests that British consumers value softness.
Figure 9 shows the same finished tissue product breakdown by volume as Figure 8, except that each product bar is stacked by the type of tissue technology applied. Advanced technology (TAD) is employed for 23% of consumer bath tissue, 30% of consumer towels, 27% of commercial bath towels, and 84% of commercial hand towels. Applying advanced tissue base sheet technology in commercial hand towels makes sense to get the most hand dries out of a roll. Still, this rate is much higher than in the United States, where consumer bath and consumer towels get much more technological attention.
A comparative analysis of tissue-producing countries was conducted using the United Kingdom’s tissue trade partners. This set includes China, Germany, Indonesia, Italy, Spain, and Türkiye. This comparison set allows for a review of the United Kingdom’s current tissue fleet as of Q2 2024.
Figure 10 illustrates this comparison, plotting the average technical age of each country’s machines on the X-axis against the average tissue machine line speed on the Y-axis. The size of each bubble represents the total capacity of each producing country. The United Kingdom has the oldest tissue machine fleet.
Notably, while Türkiye, Spain, and Germany operate at higher speeds than the UK, alternatively, when considering machine capability through wire or trim width instead of speed, the UK ranks just behind Türkiye in terms of productivity. It is important to note that this analysis is based on average data for each country as of mid-2024.
Figure 11 shows a comparison of the same countries alongside the United Kingdom, focusing on the average cash cost of producing a ton of tissue. The height of each bar indicates the production cash cost for each country, while the width represents their relative tissue capacity. Additionally, the coloured segments within each bar illustrate the various costs involved, including raw fibre materials, market pulp, chemicals, energy, labour, materials, overhead, and any credits.
The United Kingdom has the highest production costs among the group. A comparison of the colour-coded bar stacks reveals significant differences, particularly in overhead and energy expenses faced by UK mills. Reducing energy costs to align with the average of the group could bring the UK’s costs closer to those of Germany.
A snapshot of the average tissue machine and mill viability is shown in Figure 12. In this case, the cost of the bar height is determined by viability factors, where cost is only one of the eight factors considered. The legend shows these factors as capital required, cost, grade risk, internal company risk, competitiveness, size, technical age, and tons per unit trim.
Türkiye, Indonesia, and Spain perform well in this comparison, positioned at the lower end of this set. At the right-hand end of the chart, Germany, the United Kingdom, and Italy show significantly higher risk scores. The investments underway now in the UK will start to address these risks.
Figure 13 displays carbon emissions per finished metric ton, explicitly focusing on emissions from tissue machines on-site and excluding pulp production at integrated sites. Scopes 1 and 2 emissions were chosen as they are most likely to be included in a carbon analysis by potential consumers and governments. The colours stacked in each bar represent the source of each emission. The two key areas are fossil fuel consumption on-site for power and heat during tissue drying and the fossil fuel content of electricity grid production.
The United Kingdom ranks well in this analysis, falling in second lowest after Spain. Scope 1 emissions are higher than those from Spain, Germany, and Indonesia. The United Kingdom’s Scope 2 emissions from purchased electric power are relatively low compared to Germany, Indonesia, and China.
The domestic tissue business in the United Kingdom is expected to experience growth after 15 years of stagnation and machine shutdowns. In 2024, its competitive position is adequate. However, ongoing projects are set to reverse this decline if completed as planned. The additional capacity should decrease the rate of tissue imports by at least half, allowing for a rate comparable to earlier levels and satisfying the needs of the growing population and economy.
The new UK government and its acknowledged economic issues pose vital risks. Will these projects remain on track in the face of economic headwinds? However, the tissue business tends to weather the economic problems better than most, and both European and domestic companies involved are unlikely to backtrack in the face of minor challenges.
Specific details about tissue producers and individual machines are needed to analyse the competitive position. This article provides a static summary of the current tissue industry in the United Kingdom. Fluctuations in fibre prices, exchange rates, and environmental regulations will introduce advantages and challenges for participants. Furthermore, tissue mills in the UK will continue to change ownership and consolidate, and neighbouring countries’ investments in tissue-making capacity may impact imports and exports.
