By Tissue World magazine editor Helen Morris
There is a real sense across the industry of a waiting game being patiently played out.
That there is massive potential for growth across so many regions of the world is made clear to TWM as we go to get the best kind of intelligence … from the players themselves on their home patch.
That there is problematic overcapacity as many companies don’t want to miss out on profiting from that future potential is also too clear. The reaction is still ongoing.
We have seen a lot of tissue capacity closure and postponements over the past few years, especially in China. In 2014, this was accelerated when the likes of global tissue giants Asia Pulp & Paper and Hengan International announced they were substantially delaying their aggressive expansion plans across China and Indonesia.
Their response was in reaction to critical oversupply and heavy competition. It’s too early to say whether closing or delaying capacity expansions will help the overcapacity situation – it remains the most serious issue facing the industry. The effect on the demand and supply situation is not decisive and not enough to counterbalance all the new projects planned to come on stream.
This issue’s Project Survey gives you the latest details of new tissue capacity announced by the PM suppliers and through our own research that will come on stream or are planned for during 2014 and 2015.
Romania: A classic model of potential growth
Romanian consumers, their pockets flush with more Leu than they have been used to in recent years, are keen on a bargain. No surprise there. The good news is that they are becoming well placed to find one.
The key to success in Romanian tissue is appearing to the consumer to offer value for money, and particularly expanding into previously untouched rural areas.
Petrocart’s director general Adrian Vais summed up the market succinctly when he told TWM: “Globalisation is everywhere, but not in tissue here, not even in converting. And that makes it very interesting.”
At first glance, the potential of the US$160 million Romanian market could easily be overlooked. Closer inspection reveals all the ingredients of an enriching tocaniţă (Romanian hot stew) simmering nicely. Disposable incomes are rising, the economy is steadying, and underdeveloped tissue categories are springing to life re-sulting in a tissue va-lue growth of 5% and volume growth of 4% in 2013 and 2014.
Romania’s geography links Europe with the Balkans and the Middle East, and coupled with the country’s rapidly changing de-mographics it holds a lot of promise. Retail giants such as Carrefour and Metro have seized upon this and over the past few years have invested aggressively.
The arrival of supermarkets and discount stores have had a big impact which resulted in a lot of changing trends and instigated a consumer shift from standard to economy tissue products. Private label – although not at the level of the monopoly of the Germany tissue market – dominates more and more. Kitchen towels are the standout category, with a value growth of 7% in 2013, the highest of any category.
Available market share is being fought over by mainly local players with small shares, although Sofidel and SCA also have a presence.
Competition could bring much success.
Tissue World Barcelona 2015
Preparations for tissue’s most prestigious trade show are well underway, and Tissue World Barcelona promises to be as good at breaking records as Spain’s favourite Argentinean Lionel Messi himself.
Happy New Year!
For everyone who has just celebrated a New Year, TWM would like to wish everyone throughout the world of tissue a 2015 of much happiness, increased sales and expanding bottom lines.
