Spain – competitive T&T base in a struggling economy

Country Report

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Spain is currently producing over 800 thousand MT/Yr of Towel and Tissue (T&T) paper. That makes Spain the third largest T&T producing nation in the European Union (EU) and 15th worldwide. Spain, as a country, was experiencing solid growth coming into the worldwide recession of the last three years. A third of the machines in Spain were started in the last ten years but this expansionary trend came to a grinding halt in the last three years. Spain’s cost position suggests it may once again enjoy strong growth as the EU and Spain’s economies improvSpain is home to more than 27 million people. Spain’s economy is the 13th largest in the world, with a GDP that is fifth in Europe though substantially below Germany and France. GDP had been growing at above average rates for almost 15 years before entering a recession in the second quarter of 2008. GDP contracted by 3.7% in 2009 and by another 0.1% in 2010. Spain began to recover in 2011, making Spain the last major economy to emerge from the global recession.

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Geographically, Spain’s T&T mills are located in the Northeast areas approaching the Pyrenees and to a lesser extent along the Mediterranean Sea (Map 1). The country ranks third among the 19 T&T producers in the EU (Figure 1) and in the number of operating machines, behind Italy and Germany (Figure 2). T&T machines in the EU vary from narrow two-metre machines to six-metres. The machines in Spain are typical in term of trim range for the region, with the
[one_half_last]average being 3.5 metres (Figure 3). Mill production in Spain is, on average, also similar to the remaining mills in the EU at less than 60,000 MT/Yr while the technical age of Spain’s machines is lower than average at 15 years (Figure 4). Fibre mix in Spain’s mills is heavily weighted to market virgin pulp as is the case with several other major producing countries in the EU (Figure 5). Recycled fibre is present in most countries, but not in heavy use by major producers. Integrated recycled fibre does provide some smaller producing countries an advantage over the purchased fibre consumed by larger producing countries. Spain, in turn, holds a slight cost advantage over other large producers attributable to lower labour costs (Figure 6).

Spain’s T&T machine production rates range from the very smallest (producing less than 10,000 MT/ Yr) to the area’s largest producing more than 60,000 MT/Yr (Figure 7). Machine trims range from a narrow two metres to a regionally typical five metres in width (Figure 8). Machine speeds are fairly well distributed with about an equal number of machines in the low end of 500-1,000 mpm as in the high end of 2,000-2,500 mpm (Figure 9). On the international scale, Spain’s machines tend to mirror the EU average capacity and average ages (Figure 10). A noteworthy observation is that Spain’s T&T business is more internationally owned than is typical with nearly half owned by companies based outside of Spain (Figure 11).

The source for market data and analysis in this article is FisherSolve™. Data tables behind Figures 1 – 11 can be obtained from Fisher International. E-mail requests to [email protected]


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