Managing director Abdullah Al Khateeb explains the key to success in the Gulf as Crown Paper Mill aims to be the largest tissue manufacturer in the Cooperation Council for the Arab States of the Gulf by 2020. By Helen Morris, Senior Editor, Tissue World Magazine.
Driving through the grand streets of the UAE’s capital in June to visit Crown Paper Mill (CPM) gives just a glimpse into the daily life of the desert city. It’s a stifling 41 degrees,
and there are very few people out and about.
The vibrant aquamarine Arabian Sea that runs through Abu Dhabi perhaps hints best at local life: jet skis swing past, speed boats carry holiday-makers and locals, while swanky hotels, palm trees and sandy beaches line the river banks hosting locals and tourists sipping Arabic coffee and exotic cocktails. There are plenty of glass sky scrapers, sand-colour mansions, extravagant shopping malls, substantial new-builds, and surprisingly few billboards or advertisements. We speed past the Sheikh Zayed Grand Mosque (which has room for 40,000 worshipers), and along the Sheikh Zayed Bridge (named after the country’s principal architect, former president and founder, Sheikh Zayed bin Sultan Al Nahyan).
The views beyond are of the Arabian Sea, and the neighbouring Gulf states of Bahrain, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and Iran.
Once outside the city and immediately the contrast is stark; mile after mile of desert, dusty skies and giant power lines accompany the road until we arrive at the industrial region that is home to some of the country’s top businesses.
TWM is greeted by Abdullah Al Khateeb, the managing director of CPM. He is friendly and witty, speaking in excellent English and first discussing the weather: “Here in the UAE there’s not much choice, it’s either hot… or very hot! But winter here can be very beautiful, it’s like your (British) summer, but without the non-stop rain and strong winds”, his travels, as well as his love of Barcelona Football Club.
Originally from Jordan, he has lived in the UAE for almost 20 years. Upon joining Ittihad International Investment, a private holding and multi-disciplinary conglomerate, and parent company of CPM, he says: “The Ittihad Group is investing almost in everything, health, trading, the industrial sector. In the last few years we have started to focus more on industry and especially in the paper industry, we have seen a lot of potential there and we own the largest printing and writing mill in the MENA region, Ittihad Paper Mill (IPM), with annual production capacity of 320,000mt.”
He was then asked to spearhead CPM, a leading producer of jumbo tissue paper rolls in the Gulf. From its 50,000sqm plant it produces jumbo rolls for a variety of products, from 13.5gsm facial tissue to 45gsm hand towels, all from high-quality virgin pulp grades, which are then sold to converters in the region.
The range also includes “Deep Dye” tissues, which it sells into developed markets including the UK and the USA.
Of the Gulf region’s tissue market, he says it is a little slow: “The market isn’t growing as it was because of the current political situation in this region… the Arab Spring, the wars in Yemen and Syria… it has impacted the tissue market and created a tough competition for us.
“All the tissue mills here are suffering. We are doing well, but we still can’t increase prices because of the competition here and the slow market.”
The company faces strong competitors within the UAE. The Nuqul Group is present as well as Abu Dhabi National Paper Mil. The latter is currently the largest manufacturer of jumbo rolls for the UAE, producing 90,000tpy. In 2015 it started-up its third TM, Valmet’s Advantage NTT New Textured Tissue machine. It is targeting the production of premium- quality tissue and was the first, and currently the only, NTT machine in the Middle East. Al Khateeb says: “As the market just isn’t here as much as we would like for our capacity, and we have large competitors in this region, the solution was for us to take advantage of IPM and our access to pulp and using almost the same chemicals as our printing and writing paper plant, and go for an expansion at CPM with annual production capacity of 65,000mt.
“The discussion was what size of tissue machine… so we went for the latest and fastest. We wanted everything, the most modern, the most energy efficient, in order to produce the best quality of tissue with better energy costs and to reduce our carbon footprint.”
“Especially here in the Gulf and Abu Dhabi, we had the privilege of low energy costs for gas, water and electricity for many years, but not anymore because in the last two years they increased everything.
“So now if you want to compete in this area, you have to have the advantage of low cost. So we are focused on best quality, and low cost, and best service.”
A new Valmet-supplied Advantage DCT 200HS is currently in construction and expected to be up and running by the end of 2018.
The investment was made to specifically target the increasing demand for high quality tissue products in the Middle Eastern market and, crucially, will add 65,000tpy of capacity to CPM’s current 37,000tpy, launching the company into the big league within the Gulf region’s tissue market.
“Today, we are one of the smallest capacities … but later this year, when we reach 100,000tpy, it’s a different story. We are now very well established here as Crown.”
The machine includes an Advantage ViscoNip press and Advantage ReTurne energy recovery system and will have a width of 5.6m and a design speed of 2,000m/min: “This investment will differentiate us from the rest of the market,” he says.
“There will be tough competition here in the next few years,” he adds. Today Crown, with its two machines, is competing with strong competitors and the latest technologies. And with its investment plans, it is expecting to continue along its growth path.
“We have a very clear strategy: to expand out of the Gulf, into the UK, the States, certain areas in Africa… wherever there are opportunities. Because of IPM, export will be much cheaper for us, benefits of raw materials and logistics.
“We need to continue to produce the products right for this market. Until we see an improvement here in the Gulf, that will continue to be our strategy. Our aim is to serve our customers with the best quality, and the best service with competitive prices in the region.”
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