Converter Accrol Group Holdings takeover is “a key pillar” in strategy of sustained expansion says Graham Cox, Chief Operating Officer, Navigator Tissue UK. Report by TWM Senior Editor Helen Morris.
In April 2024, Navigator Paper UK – the UK division of Portuguese pulp and paper company The Navigator Company – launched a public all-cash offer to acquire UK-based tissue paper converter Accrol Group Holdings, which converts and supplies toilet tissues, kitchen rolls, facial tissues, and wet wipes to UK-based discounters and grocery retailers. The purchase went through in May 2024, reinforcing Navigator’s market positioning in the Western European tissue market. At the time, Navigator said it anticipated the move would result in a consolidated turnover of £500m, with the UK market contributing around 50% of Navigator’s total tissue turnover.
Navigator diversified into the tissue market in 2015 through the acquisition of Portugal-based AMS Star Paper, and now produces tissue paper parent reels on a large industrial scale with direct integration of pulp into tissue production. It also has converting facilities at sites across Western Europe and the UK which serve the At-Home and AfH markets, and invested in a greenfield tissue paper production plant in the Aveiro district of Portugal in 2018. In 2023, it acquired the tissue consumer business of Spanish Gomà-Camps group and its Zaragoza industrial site.
Now the company has a total production capacity of 165,000 tons of tissue paper and 180,000 tonnes of tissue converting capacity per year, generating approximately €293m of annual revenue in 2023.
Accrol is “a key pillar” in Navigator’s strategy of sustained expansion of its tissue business in the Western European market, and it will focus on building on Accrol’s market position in the UK tissue private label market and supporting its growth across all its core product segments.
Speaking from his office in Blackburn, Lancashire, Graham Cox, Chief Operating Officer, Navigator Tissue UK, says the UK arm now has a revenue of circa £200m per annum, with a current annual tonnage of 100,000tpy, supplying quality leading tissue products and wipes to the majority of the UK leading retails and wholesalers, across own label and branded products. “We service our customers from our three UK tissue converting sites and our two UK-based wet wipes manufacturing sites, the most recent of which was via the acquisition of Severn Delta in Bridgewater. It now means we can provide a true one stop shop for all our customers, across toilet tissue, kitchen tissue, facial tissue, MTT, baby wipes, H&B wipes, pet wipes and household wipes – something that sets us apart from all of our competition,” he says.
Recent investments – outside of the acquisition of Severn Delta – include the installation of a Pocket Pack line in Blackburn, making the company one of only two UK-based producers of Pocket Pack tissue: “We are also preparing for a new state-of-the-art wet wipes production line, due to be operational in the first quarter of 2025. This will service our customer base with a first to market technology specifically designed for 100% cellulose and biodegradable products.”
Alongside this, Cox says the company will continue to invest in its branded portfolio, having recently launched Flash Kitchen Towel which is produced and sold under licence from Procter & Gamble: “It is a market-leading product which is stronger than the current brand leader and which continues to build positive momentum, driving value back into the Kitchen Towel category,” he adds.
Following the acquisition of Accrol, the company’s growth strategy “continues to develop in an ever-changing and dynamic UK market”. Cox says: “This means keeping to the main fundamentals of working collaboratively with our key customers to provide high-quality, innovative products that deliver great value for both retailer and consumers. Our wide-ranging capabilities allow us to produce products to meet this objective, whether that is entry level products or brands delivering market leading quality, such as Flash, all with a keen focus on availability for the consumer.”
Within the company’s branded portfolio, he says the business will continue to review key trends and ensure that its brands Elegance, Magnum, Softy & Flash “deliver against these requirements, whilst delivering exceptional quality” and are complemented with the company’s wipes brands of Little Heros, Cherris, etc.
“Finally, now as part of the Group Navigator, we have enlarged further our offer, capabilities and balance sheet. We were already able to provide a full offer in wet wipes and almost a full offer in tissue, that we can now complement with hand towels or napkins – we became one of the top three most complete one-stop shops in tissue and wipes in the UK.”
He says the UK market remains “very vibrant” within tissue and wipes. Against a backdrop of increasing raw material prices, which Cox says will ultimately feed through into retail prices, the company is seeing “significant opportunity” for consumers to continue the trend of moving from brands into high-quality own label products further driving growth in the private label share in the direction of that being achieved in the wider European market. “In summary, the UK tissue market is getting more demanding in terms of quality while also requiring even more competitive prices – this is fantastic news for Navigator Tissue UK, as we are especially well positioned for this environment.”
Since Covid-19, buying habits he says have re-established themselves, post the heights of the panic buying. “In more recent times, these habits have been more impacted, such as by the cost-of-living crisis where shoppers are looking to maximise their budgets without compromising on quality. We are seeing shoppers either move out of the more established brands into either challenger brands, such as Elegance & Magnum, or into own label, where equally a level of movement between tiers has also been witnessed. Given the lower levels of brand loyalty from the younger generation we expect to see a continued growth in private label moving forwards.”
Navigator Tissue UK also aspires to move all of its operations to run with 100% renewable energy with further investments into solar panels due in the near future. “We continue to champion the environment and sustainability,” he says. “Each site also has clear energy targets set, to deliver reductions in our CO2 emissions and further reduced our environmental impact.”
In terms of our plastic usage, he adds that everything the company produces uses plastic containing at least 30% Post Consumer Recycled (PCR), something that was achieved within three months of the UK legislation changes: “We will have everything moved to at least 50% PCR in the coming months, with over 50% of our products already there. Our focus on plastic usage doesn’t stop there with the introduction of new banding technology on several of our lines to further reduce plastic requirements by up to 60%.”
In reaction to the energy crisis in the UK market, he says energy prices in the UK have fallen from the highs of a few years ago, and the continued transition to sustainable energy should ensure a more stable base that is less reliant on import of gas and fossil fuels for the future.
Recent levels of pulp inflation over the course of the last 12 months have also “clearly impacted” producers and convertors and “necessitated the need to raise prices to our customers. “This is not something that is unique to Navigator Tissue UK, but we continue to work in partnership with our valued clients to manage and recover these costs whilst still delivering on the quality and products our customers and consumers expect every day.”
Navigator Tissue UK continues to see positive sales momentum within both the tissue and wipes market, which Cox says is supported by a broad customer base which allows it to “operate in all categories and tiers, bringing sustainable, quality products, produced in state-of-the-art facilities, supported by a loyal and dedicated workforce.” This, he adds, enables the company to ensure “consistent positive momentum” and focus on a “dual track strategy across both own label and brands.”
“We continue to integrate into the wider Navigator Company, where we can benefit from the full integration into a leading forest, pulp, tissue, packaging, and biomass energy business that is recognised for its sustainability and focus on the environment. Opportunities will bring these benefits, skills and expertise into our UK business and drive further value and creativity for our customer and consumers. Whilst the UK retail scene remains a very competitive and dynamic market, it also has great potential to drive further growth away from brands as we leverage the full benefits of the wider group whilst remaining agile and responsive to the changing needs of the consumer.”
