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Poland gets in shape to take full advantage of the European recovery

By Helen Morris, Tissue World Editor

Poland’s 40 million population, or at least the ones who get round to doing the cooking and the cleaning, love their kitchen towels…the star performers in a relatively modest but developing tissue market.

As with most countries where it features, the humble kitchen towel has burst out of its category and become the general utility towel to be used in any number of cleaning, wiping and mopping up tasks anywhere about the house and garden… and even in the garage where it has taken on a masculine brand appeal.

The best indicators are two performance comparisons: average disposable income in Poland of US$8,000 compares to US$27,000 in Germany, but percentage per Polish household spend on kitchen towels is catching up rapidly and will match German household spend by 2017; 2007- 2012 saw kitchen towel growth posting an 11% value CAGR to reach US$343 million and with an additional US$100 million projected by 2017, this will out-perform the high growth star of eastern Europe – Russia. That’s fourth in global volume growth; Poles love their general utility towels that much.

It’s founded on an increasingly competitive retail sector with demand for private label driving it. Value share increased from 11% to 43% by last year on the back of healthy competition between British and French supermarkets Tesco and Carrefour, with feisty domestic discounter chain Biedronka joining in the fun. Overall, nineteen machines produce 425,000 mt/yr of T&T paper, the sixth largest EU producer with 5% of EU capacity.

There remain fundamental tissue and national economic problems. Infrastructure and the general business environment need to be improved, and unemployment exceeds the EU average. Machines are on the narrow end of the trim range at 2.5 metres while mill production is low compared to major EU countries.

The technical age of machines is average and GDP is well below mean EU levels. The general Eurozone malaise has now begun to hit what had been steady growth in a country which had avoided the 2008-2009 downturns.

The major plusses are bargain hungry consumers and a healthy cost position, mainly due to energy and labour costs, putting Poland in good shape to take full advantage of the European recovery.

ENVIRONMENTAL TECHNICAL THEME

With customer demand for sustainable tissue products continuing to steadily increase, tissue producers around the world increasingly have to find ways to stand out from the crowd by implementing tough environmental standards. SCA, which sells heavily into the retail sector, talks to TW.

SPECIAL ISSUE

TW is adding a series of Special Issues to every magazine: in this edition read our “Barometer Issue”, which taps global confidence in the tissue industry and re-contacts the mills visited for our Country Reports during 2012 to get the latest updates (Japan, Brazil, Western USA, Turkey, South Korea).