Outside of China – and the China of a few years ago, as this edition’s Exitissues suggests – it is rare to come across growth and consumption figures like these.
Poland is seeing a rise in salaries – the description used by one of our contributors is an unequivocal “fast” – so shoppers have more spending money, they are discovering discounting stores, which in turn are proliferating.
Branded tissue market leader Velvet Care – operating from a site of industrial production started in 1897 – is now 30 years on from the end of the Communist era and hurtling with talent and enthusiasm into a new rich seam of growth which has in recent times touched 20%, and is now at about 8%. Its workforce has doubled in five years, production capacity has tripled, converting capacity more than doubled, and turnover increased from €121m to €150m in a year.
Any potential for over-capacity or an over-heating economy are not of immediate concern. In Klucze, north west of Kraków, TWM was met with a wave of optimism from Marek Ściążko, plant manager and vice president of the board, Rafał Curyło, vice president and finance director, and production manager Wanda Ciesielczuk. They epitomise dedication to the company, and it’s a fascinating historical story with a hugely promising future.
In Batorowo, close to the picturesque city of Poznan, Dariusz Makowiak was optimistic too. The sales and marketing director at POL-MAK had struggled to chisel out any time for our interview. Something else had been keeping him occupied. His wedding a few days away.
So it was generous of him to take time away from that important event to talk about his other love … the family firm, started by his parents in 1986 and now Poland’s leading niche producer of decorative paper napkins – 60% of its 1,200 designs exported to 70 countries, and plans to reach 80% in the years ahead, and in Poland itself growth assured as consumer spending and the AfH market advance.
Napkins at that wedding reception would have been special.
China’s downturn: a sign of turbulent times or a longer-term reality?
Any downturn for tissue in China is usually a relative one. For years the market has been in a very strong upswing, 10% or more consumption annually just a few years ago. This year the forecast is 5.1%, then 4.8% for 2020. We will not know the real extend of any longer term changes until the uncertainties of recent years have settled: the systemic, internal economic shift from investment to home consumption; the ongoing trade tariff war with President Trump’s America; and what seems to be a growing resistance to the alleged ‘trade debt’ involvement of countries linked to China’s huge Belt and Road initiative.
Any downturn for tissue in China is usually a relative one. For years the market has been in a very strong upswing, 10% or more consumption annually just a few years ago. This year the forecast is 5.1%, then 4.8% for 2020. We will not know the real extend of any longer term changes until the uncertainties of recent years have settled: the systemic, internal economic shift from investment to home consumption; the ongoing trade tariff war with President Trump’s America; and what seems to be a growing resistance to the alleged ‘trade debt’ involvement of countries linked to China’s huge Belt and Road initiative.
China’s own forecasts have traditionally been conservative. The US-based Fastmarket’s analysis, carried in detail in TWM’s Exitissues, projected almost 6.8% growth for 2018.
In his report, Fastmarket’s principal Esko Uutela examines the effects of high market pulp prices that negatively affected the profitability of the business, and the suddenly poor consumption mentality in China in the last few months of 2018, which influenced all shopping and reduced retail growth radically from the earlier high growth figures in annual comparison.
The origins, and sudden emergence of a poor consumption mentality in China is a subject TWM will return to.
