TWM interviewed tissue mills and industry insiders to get their views on how the pandemic is impacting the tissue market – and their forecasts for the future
The world’s tissue industry is bracing itself for further substantial production increases following the world-wide outbreak of Covid-19. The sudden surge in demand – which, at the time of publication, has most likely not yet peaked – will also likely see a subsequent fall-off.
Even during the present surge, the AfH sector is especially hard hit as many nations shutdown social activity as restaurants, bars, flights and hotels temporary close down to adjust and safeguard citizens.
Essity: Its Salford, UK-based tissue facility sold 63m toilet rolls in the first two weeks of March – compared to 24m the same time a year earlier. It emphasised the resilience of its supply chain and urged consumers not to panic-buy and be community-minded.
A spokesman told TWM: “We have seen increased demand globally for our consumer products, that is toilet paper, household towels, baby diapers, feminine care, and incontinence care products.
“We don’t have any issues meeting these demands. Already in January we saw an expected increase in demand and the risk of production disturbances and started to take measures. At the moment, we have no major disruptions in production, for any of our products, due to the Coronavirus. In China, where we operate through our subsidiary Vinda, all production is up and running, also in Hubei Province.”
Kimberly-Clark (K-C): K-C told TWM that it wants to assure consumers it is “doing our best to ensure a steady supply of product to stores”. It said: “K-C is working closely with our retail partners and customers to understand their current needs. We have plans in place to address the increased demand for our products to the extent possible, including accelerated production and reallocating inventory to help meet these needs.
“We will continue to make adjustments to our plans as necessary. In addition, the health and safety of our people is our top priority, and K-C has taken extra steps to keep our people and their families safe and healthy. These measures include enhanced safety measures for our office, mill and distribution centre operations, which were developed in line with guidance from global health authorities. These plans also help ensure the continued supply of our essential products.”
UK-based Leicester Tissue Company: Frank Millward, sales and marketing director, said: “We are seeing a substantial uplift in demand – in some cases 300% + based on EPOS till sales. This panic buying is unfortunate as it is placing heavy and quite unnecessary demand on manufacturer, hauliers and retailers alike – hence most are now rationing.
“At the moment, we are coping well. We are all hoping and perhaps expecting that having now stockpiled – the majority of shoppers will settle down to a more normal and predictable shopping pattern soon.”
UK-based Poppies Europe: Armindo Marque, partner and technical director, told TWM: “Business wise, we are now bracing for impact. Although toilet tissue madness has artificially boosted our sales for the time being. But we are now taking the necessary measure to adjust and see it through.”
Kruger Products: The company said it was working hard to make sure people have what they need during this fast-changing and challenging time. Its eight facilities across North America are working at full capacity. and optimising production to work with their customers to stock tissue products. The company’s fibre and other materials are primarily sourced in North and South America. It added: “The supply of materials is strong and we do not anticipate any product supply issues.”
Dino Bianco, chief executive, Kruger Products, said: “Our production facilities are among the cleanest and most sanitary of any manufacturing, given the nature of our products. We have enhanced our employee health and safety protocols. And only employees and those deemed critical are permitted to enter these facilities. Anyone wishing to enter is subject to screening.
“In my 30 years in the grocery and CPG industries, I have witnessed how strong and resilient these industries are, and how committed they are to making sure people have the essentials. While this is a unique situation, these industries are pulling through and have the supply to keep food and products moving.”
Clearwater Paper Corporation: It is closely monitoring the rapidly evolving Covid-19 situation. The company said it was also experiencing “a significant increase” in demand for its retail tissue products and an increase in demand for paperboard used for packaging food and pharmaceutical products. It is focused on ensuring continuous operations to serve its customers’ demand for these essential goods. Clearwater Paper’s facilities are “currently producing as usual,” it added.
UK-based Better All Round/Consuma Paper Products: Oday Abbosh, founder, chief executive, and owner, told TWM: “It is frantic. In reality, everyone has been taken aback by the speed with which it has accelerated worldwide. Panic buying has put immense pressure on the supply chain and we will have to see what the ramifications will be in relation to weakening currencies. However, there have also been huge positives. The way retailers, our industry and our employees have all stepped-up is fantastic and brings immense pride. Looking after our people and serving our customers remains our priority and we are doing everything we can to look after everyone. We are also grateful to our brilliant suppliers who have also stepped up big time to ensure continuity of supply.”
He added that given the “unprecedented times”, Consuma has taken the step to open up its supply chain expertise and resource to help businesses that might, in other times, be considered competitors.
He said: “We’ve done this in order to help the industry as a whole meet the extraordinary levels of demand faced by retailers. To this end we’ve facilitated a selection of competitors – including those whose supply included away from home destinations – to quickly pivot sales to some of our key retail partners.
“With factory production capacity at its max for many suppliers, retailers have been looking for ways to increase their supply. The challenge has been in finding a way
to do this without the wider supply chain infrastructure – e.g sales, ordering and invoicing – already being in place.
“By opening up components of the Consuma supply chain to third parties, we have been able to get products into store quickly and easily on behalf of all parties and create a win win situation for all. This collaborative effort brilliantly demonstrates how our industry can come together if necessary.”
Spain’s L.C. Paper: Chief executive Joan Vila told TWM: “The economic situation resulting from the Covid-19 pandemic is extremely complex. The main market for L.C. Paper is AfH, which comprises clients like hotels, restaurants, airports, schools, colleges, hospitals… Except for hospitals, the rest of the market has stopped dead, so most of our clients from those areas have disappeared abruptly. This has profoundly affected our PM2 production line.
“To cope with that situation, we have rescheduled the vacations for our workers and reformulated the organisation of shifts to temporarily decrease the production figures, while we are awaiting the restart of the AfH market. That is something that we don’t expect until almost the end of 2020 both in Spain and in the rest of the world, while we believe Spain will be particularly affected.
“On the other side, regarding our PM3 production line, we have replaced the market loss from the AfH sector with a sharp increase in production of jumbo rolls for the consumer market, helping other well- established companies to overcome the huge increase in demand.
“The crisis stemming from the pandemic has been an opportunity for us to anticipate the introduction of an important product for our future strategy: the toilet and towel rolls with unbleached pulp, a quality we call “Nature”, with cardboard packaging. In addition, it has also reinforced the e-commerce channel, where we already had an important presence. We believe that some of the e-commerce increase will be permanent even after the end of the pandemic.
“In moments of crisis like the current one, we believe the most important value is resilience: the ability to adapt swiftly to the new moments of the economy. That is an area where I am convinced that our company will excel.”
Continue reading, Pandemic Special part 2, ANALYSIS: INDUSTRY INSIDERS