TWM/1: How have the events in the tissue industry in the last year impacted your business?
“2018 and 2019 have performed independent of logical evolution, there has been a disconnect between availability, and subsequently the consequences of price erosion. It started with tight supply and aggressive pricing policy by pulp suppliers which forced tissue prices to head north. During the period, we have seen the strengthening of the US$ as well as the Euro against the wounded British pound, or should I say Sterling weakened against all currencies.
“The continued uncertainty which still prevails over Brexit enforces lack of clarity. In 2019, as far as the UK is concerned demand has been solid, the biggest issue is uncertainty and constant lack of government being able to govern. At first, we thought that the extra demand for fibre to replace plastic would compensate for the soft pulp demand from China, however that decline was greater than the growth produced by substitution. The interference by Asian governments on RF imports has had catastrophic short-term consequences on the lower grade RF supply balance, encouraging mills to substitute cheap low-grade materials into packaging so reducing demand for virgin fibre. This resulted in an oversupply of pulp which in spite of consolidation by the pulp suppliers the supply and demand balance could not be managed and price erosion followed.
“We at Northwood have navigated these challenges and managed to turn many of them into positive opportunity whereby we have secured additional tissue manufacturing capacity and converting facilities thereby further integrating our business at least in its supply of RC Tissue grades.”
TWM/2: What main tissue trends are you expecting to see in 2019/2020?
“At Northwood we are constantly looking to reduce our effect on the negative by products of manufacturing recycled tissues as well as battling to further reduce our usage of energy as well as water. We have invested heavily to reduce the water content and also to preserve fibre in our sludge production, saving CO2 as we have reduced the number of trucks needed to dispose of our waste stream by almost 20%. We have also acquired a co-generation facility meaning we create our own electricity which we also sell to the grid. All our transport fleet is updated and meets the best in practice emission targets.
“We have added a number of new additional converting lines to make AfH rolled towel and toilet products, we are a major supplier of private label as well as our well-known brands of Leonardo, North Shore, Essentials, Optimum, Whisper, Hush and Rhino covering folded as well as the full hygienic product portfolio needed by our clients be they in the professional or consumer sectors. Additionally, in Spain under the Saten Brand we offer the full table top assortment further making Northwood the complete supply chain partner of choice. We use virgin tissue or RC tissue as appropriate to best suit the product criteria.”
TWM/3: How are the changing economic conditions around the world impacting the tissue industry?
“The only certainty we have is that we have no certainty and we need to be aware of sudden changes and mitigate against these headwinds and with our excellent leadership team we are well placed to continue on the path followed during the last decade. We now manufacture over 100,000mt of RC tissue/towel grades most of which is consumed internally. We continue to select opportunities to grow our market offering and manage the unfavourable climates presented.”
TWM/4: Are you seeing demand for tissue products in new geographical areas, and if so, where and why?
“Demand for our grades continue to grow. We are covering selected markets as served historically but we are well placed as capacity grows to expand the Northwood footprint and now we also have mainland Europe paper making, converting and a distribution base so we are able to present to cross border buyers a robust supply chain partner.”
TWM/5: What are the main challenges and opportunities facing the tissue market in the immediate future and how are you tackling them?
“By far the biggest challenge facing our industry is currency volatility, however we have well-honed systems in place to manage the peaks and troughs. The gyrations of the pulp market, be it availability or price development, continue to confound all the soothsayers as no amount of forecasting and algorithms can shed a light on developments until they are upon us in the global village that we now all inhabit. We are in a very vibrant sector which demands 24/7 commitment and that is the only way one stands a chance of making the right judgment call. In the UK once Brexit is effected or cancelled, one uncertainty will be removed and if we have a government that encourages enterprise and competition and lets business evolve, we are positively looking forward to responsively growing our businesses.”
