Located on the Mexican/US border, Fabrica de Papel San Francisco tells TW about expanding its export reach into the giant that lies at its shoulders and becoming the world’s first purchaser of NTT technology.

Fabrica de Papel San Francisco (Fapsa) successfully started up the world’s first Advantage NTT tissue line at its Mexicali plant in Mexico in July 2013. The 2.6-m-wide Metso-supplied machine adds another 30,000tpy of bathroom tissue, napkin and towel grades to the company’s existing production.

Dario Palma y Meza Espinoza, director of operations at the family-owned business, tells TW the investment was to increase its production capacity and diversify its product range. “NTT technology was the only one that could give us more capacity in our 100% recycled products base for growth and to diversify into producing premium type products,” he says.

“The economy brands still dominate but producers give the consumer added-value with fragrance, space saver rolls, best brightness and colour on embossing spots.”

Significantly, he adds the company is now able to expand its export reach into the Southwestern US in both jumbo rolls and finished products. “We have no plans to export into Latin America; all export is from the Mexicali facility to America.”

The company now produces 167,000tpy and the new tissue machine joins four others: PM1 (1968 Manchester), PM3 (1999 Voith), PM4 (2004 Metso) and PM5 (2009 Metso). It has 11 bath and towel converting lines, three from PCMC Italy and eight from Perini plus several napkin and folded towel machines, mostly from Bretting.

Fapsa has a market share of 11% in the Mexican tissue market and Palma y Meza says any further growth will be organic. Growth in the private label and retailer brand sectors will also be key drivers for the business.



TW 1: What growth are you seeing in the Mexican tissue market?

“The Mexican tissue market has grown at a rate of 3% over the last three years according to the CNICP (Mexican association of paper) while five years ago the growth rate was higher at 4%. The economy has affected consumer’s income and producers have had to reduce the content of the products, which means fewer tonnes have been needed.”

TW 2: Is the Mexican tissue market now a mature market within the FMCG category?

“In our company’s context it is, we have plenty to offer every segment of the market and we are making a lot of efforts trying different products but at the end the price point is the key driver.”

TW 3: Which tissue sectors are showing the most growth and why is this?

“In the consumer sectors bath tissue, napkins and kitchen towels are growing the most and are the products that are better priced in the market, but there are still opportunities in the premium market.

“The AfH market continues to respond to the global economy and grows at a rate of 2% every year in Mexico. Private label has been a key driver during the last couple of years but in 2013 their sales decreased by 5% in response to the several offers of public brands in every segment of the market. However, we still bet on the future sales of private label products.

“Consumer products in tissue are moving to a size impression focus and with less product. Obviously this affects the market in two different ways: quality and performance.”

TW 4: Is there a lot of potential for further growth?

“We see a lot of potential on the premium market. In Mexico it is the segment that has the fewest offers and a lot of room for product innovations and real advantages for the consumer.”

TW 5: How is the Mexican tissue market being impacted on by private label products?

“Private label products are another sector that has to develop, changing the consumer’s view from cheap products to the best products in every segment that are available at a better price. The retailer has to treat this sector as the star products and showcase them with the most prominent and advantage shelf space.”

TW 6: How is the Mexican tissue market influenced by the American tissue market? Which trends are you seeing in America in Mexico?

“The main producers in Mexico are transnational companies: Kimberly-Clark, SCA, Procter & Gamble. They have around 85% of the market and they try to sell what they produce in other markets.”

TW 7: Are you seeing a lot of demand from customers for environmentally friendly tissue products in Mexico?

“In America we see a lot of offers on green products, but in Mexico that is not happening. The economy doesn’t help as nobody wants to pay more to save the planet and the government regulations are not there yet.”

TW 8: How are brand owners maintaining consumer interest? Do economy brands still dominate?

“The economy brands still dominate the market but the producers have to differentiate their products giving the consumer added-value to their products, fragrance, space saver rolls, best brightness and colour on the embossing spots.”

[box type=”info”] FACTFILE

Location – Mexicali, Mexico

Products – bathroom tissue, napkin and towel

Tissue machines – PM1 (1968 Manchester), PM3 (1999 Voith), PM4 (2004 Metso) and PM5 (2009 Metso), PM6 (2013 Metso)[/box]


Startup day: (l-r) operations director Dario Palma y Meza, project director Fernando De La Torre and president Mario Garcia
Startup day: (l-r) operations director Dario Palma y Meza, project director Fernando De La Torre and president Mario Garcia