risi global tissue market outlook - events.risiinfo.com · risi global tissue market outlook ......

© Copyright 2018 RISI, Inc. | Proprietary Information

RISI Global Tissue Market OutlookWith a Focus on Europe – What Is Going On?

Esko UutelaPrincipal, Tissue

RISI European Conference, Barcelona, SpainMarch 2017

• Educational background in forestry, economics and business studies

• In consulting business and information services for the forest industry since 1976

• Cooperating with RISI since 2007• Developed global tissue databases and forecasting models• Previous experience in graphic, packaging and recovered

papers• Assisted by RISI Asian, European and American colleagues

and consultants• Produced more than 200 single‐ and multi‐client tissue

studies

Principal, Tissue

Esko Uutela

[email protected]

© Copyright 2018 RISI, Inc. | Proprietary Information2

Agenda

• Recent Global Trends and Outlook

• North and Latin American Outlook

• Asian Outlook

• Western and Eastern European Outlook

• Concluding Remarks

© Copyright 2018 RISI, Inc. | Proprietary Information 3

RECENT GLOBAL TRENDS AND OUTLOOK


World Tissue Consumption by RegionMarket is dynamic: China has passed Western Europe in market size, while Asia Far East is—and Eastern Europe soon will be—larger than Japan. China has been the largest producer country since 2015.

N. America 25.0%

China21.3%

W. Europe18.3%

L. America11.1%

Asia Far East6.0%

Japan5.5%

E.Europe5.4%

N&M East4.0%

Africa2.1%

Oceania1.2%

Global Consumption: 36.4 Million Tonnes (2016)


Growth in the Global Tissue Market

0

1

2

3

4

5

6

0

200

400

600

800

1,000

1,200

1,400

1,600

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Relativ

e Growth, Percent per Year

Thou

sand

Ton

nes

Volume Growth

Relative Growth


Relatively stable growth until the Great Recession in 2009, recent years strong

Volume Growth of Tissue Consumption, 2006‐2016China accounted for 41% of growth, North and Latin America share second place

0500

1,0001,5002,0002,5003,0003,5004,0004,500

Thou

sand

Ton

nes

Total Global Growth: 10.5 Million Tonnes (1.05 Million Tonnes per Year)


Long‐Term Growth Trends in the Global Tissue MarketInternational trade in tissue shows higher growth rate than tissue consumption, a clear sign of business globalization. Parent roll trade has accelerated in recent years.

0

1

2

3

4

5

6

Tissue Consumption Total Tissue Trade Parent Roll Trade

Growth Rate, Percentage pe

r Year

© Copyright 2016 RISI, Inc. | Proprietary Information8© Copyright 2018 RISI, Inc. | Proprietary Information

Anticipated Growth in the Global Tissue MarketTissue consumption benefitting from improving global economic growth, but there are also uncertainties ahead

0

1

2

3

4

5

6

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Relativ

e Growth, Percent per Year

Thou

sand

Ton

nes

Volume Growth

Relative Growth


NORTH AND LATIN AMERICAN OUTLOOK


‐2.0

‐1.0

0.0

1.0

2.0

3.0

4.0

Growth Rate, Percent per Year

North American Tissue Business Strong in 2015‐2016The AfH sector in particular has benefitted from the strong economy and low gasoline prices

Average growth accelerating from 1.5% to 1.75% per year


Expected Growth in US Tissue Consumption by Business SectorAt‐Home retailer labels will show the strongest growth, while At‐Home branded volume growth will remain moderate and AfH growth will rise above average At‐Home growth

0.0

1.0

2.0

3.0

4.0

5.0

AH Brands Retailer Labels AfH

Million Tonn

es

Market Volume

2010 2011 2012 2013 2014

2015 2016 2017 2018 2019

Growth of 5.9% per year

Minor growth of 0.4% per year

Growth of 2.3% per year


Major Tissue Capacity Changes in North America, 2018‐2020

2018• Sofidel America, Circleville, OH, USA (2 x NTT) 140,000 t/a • Irving Consumer Products, Macon, GA, USA (TAD PM) 64,000 t/a• First Quality Tissue, Anderson, SC, USA (TAD PM) 64,000 t/a

268,000 t/a2019• Clearwater Paper, Shelby, NC, USA (NTT PM) 64,000 t/a• First Quality Tissue, Lock Haven, PA, USA 64,000 t/a• Kimberly‐Clark, Fullerton, CA, USA ‐60,000 t/a• Sofidel America, Inola, OK, USA 30,000 t/a• Georgia‐Pacific Corp., Palatka, FL, USA (TAD PM) 72,000 t/a

170,000 t/aPotential Projects• First Quality Tissue, Anderson, SC, USA (ATMOS PM) ??? 68,000 t/a• Kruger Tissue, Memphis, TN or Canada (TAD PM) 65,000 t/a• Resolute Forest Products, Calhoun, TN, USA (second NTT PM) 60,000 t/a

193,000 t/a© Copyright 2018 RISI, Inc. | Proprietary Information 13

Net Capacity Change* and Tissue Operating Rate in North AmericaLast year and 2018 are looking good due to project delays and closures, but any new expansion adding to the committed capacity would change the current outlook from good to stable; additional closures likely to emerge

80

82

84

86

88

90

92

94

96

98

100

‐200

‐100

0

100

200

300

400

Capa

city Utilization, Percent

Thou

sand

Ton

nes

Capacity Change Capacity Utilization

*Based on committed projects only

A lot of new capacity coming on stream that will affect 2019‐2020; utilization rate will head south if no further closures occur


Main Latin American Tissue Markets, 2016The five largest markets accounted for 77% of total consumption

Brazil31%

Mexico27%

Argentina8%

Chile6%

Colombia5%

Peru4%

Venezuela4%

Guatemala2%

Ecuador2%

Costa Rica2%

All Others9%

Total Market Size: 4.0 Million Tonnes


Latin American Tissue Market Shows Varying Annual Growth, Change to a More Positive Trend Expected Economic turbulence and political instability causing problems, disappointing growth in 2014‐2016, Brazilian recession the main reason


‐2

0

2

4

6

8

10

12

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016


Average Growth 4.4%/a

16© Copyright 2018 RISI, Inc. | Proprietary Information

Recent Growth of Tissue Consumption in the Five Largest Latin American MarketsSignificant annual variation in annual growth rates of apparent consumption typical in every major country

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

Brazil Mexico Argentina Colombia Chile

Market Growth, Percentage from the Previous Year

2013 2014 2015 2016


Expected Volume Growth of Latin American Tissue Demand by Main Country, 2016‐2020Brazil is projected to recover in 2017‐2019

0

50

100

150

200

250

Thou

sand

Ton

nes


???

Net Capacity Change* and Tissue Capacity Utilization in Latin America Project delays and stronger demand could help a lot, but the current outlook is not encouraging for new investments

60

65

70

75

80

85

90

95

100

0

50

100

150

200

250

300

350

Capa


Thou

sand

Ton

nes

Capacity ChangeCapacity Utilization

* Based on committed projects only


ASIAN OUTLOOK


7.97.0

7.8 8.06.9

6.2

8.5 8.2

9.9 10.09.0

6.7 7.1

10.5

7.0

0

2

4

6

8

10

12

14

02/01 03/02 04/03 05/04 06/05 07/06 08/07 09/08 10/09 11/10 12/11 13/12 14/13 15/14 16/15


Recent Growth Rates of Chinese Tissue Consumption The Chinese tissue market has been in a very strong growth phase, but is now showing stronger growth than the economy

Average growth: 8.0% per year

Recently, growth has been slowing, but 2015 was an exception


Chinese Investments Exploding, but Closures and Project Delays Expected There is a real investment peak with too much capacity being built, but currently also a wave of capacity closures in the industry

‐1,500

‐1,000

‐500

0

500

1,000

1,500

2,000

2,500

2012 2013 2014 2015 2016 2017 2018

Thou

sand

Ton

nes p

er Year

Effective Capacity Change*New Projects Closures Net Capacity Change

* PM start‐up/learning curves considered.


Net Capacity Change* and Capacity Utilization in the Asian Tissue IndustryOvercapacity is obvious, although project delays may help

70

75

80

85

90

95

100

0

500

1,000

1,500

2,000

2,500

Capa


Thou

sand

Ton

nes

Capacity Change

Capacity Utilization

*Based on committed projects only, learning curves considered.


WESTERN AND EASTERN EUROPEAN OUTLOOK


Western European Tissue Market Showed Positive Recovery in 2015, 2016 DisappointingMajor variations in growth from year to year

‐2.0‐1.5‐1.0‐0.50.00.51.01.52.02.53.03.54.0


r Year

Recession over but no consistent return to past growth rates


Volume Growth of Western European Tissue Markets by Main Country, 2006‐2016In the past 10 years, growth has been strongest in Germany, followed by the UK and France

020406080

100120140

Thou

sand

Ton

nes


Eastern European Tissue Market Growth Negatively Affected by the Political TensionThe Russia‐Ukraine conflict has taken its toll also in the tissue sector, but 2016 was surprisingly strong, mainly thanks to Poland

‐4.0‐2.00.02.04.06.08.0

10.012.014.016.0


r Year

Growth in 2013‐2015 weak and far from the trend line


Volume Growth of Eastern European Tissue Markets by Main Country, 2006‐2016In the past 10 years, Russia and Poland have clearly been driving the growth, followed distantly by Romania and Ukraine

0

50

100

150

200

250

300

Russia Poland Romania Ukraine CzechRep.

Hungary Serbia Bulgaria Belarus Croatia AllOthers

Thou

sand

Ton

nes


Growth Rate of Western European Tissue Consumption, 2014‐2020We expect relatively slow growth to continue in the next years

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2014 2015 2016 2017 2018 2019 2020

Average An

nual Percentage

Growth


Forecast

Volume Growth of Western European Tissue Markets by Main Country, 2016‐2020In the next five years, volume growth will be largest in the UK, Italy and Germany

0

20

40

60

80

100

120

140

Thou

sand

Ton

nes


Growth Rate of Eastern European Tissue Consumption, 2014‐2020The outlook is rather optimistic for tissue market growth in the next few years

0

1

2

3

4

5

6

7

8

2014 2015 2016 2017 2018 2019 2020

Average An

nual Percentage Growth

Forecast


Volume Growth of Eastern European Tissue Markets by Main Country, 2016‐2020In the next five years, volume growth will be largest in Russia, followed by Poland, Romania and Ukraine

0

20

40

60

80

100

120

140

160

Russia Poland Romania Ukraine Hungary CzechRep.

Belarus Croatia Bulgaria Serbia AllOthers

Thou

sand

Ton

nes


Major Capacity Changes (>10,000 t/a) in the WE Tissue Industry, 2016‐2017

2016• Cartiera del Borgo (Eurovast), Fabbriche di Vallico, Lucca, Italy 20,000 t/a• SCA Hygiene Products, Mediona, Spain ‐45,000 t/a• SCA France, Hondouville, France ‐21,000 t/a• Several Rebuilds by Different Companies 33,000 t/a

‐13,000 t/a2017• Paper Prime (Trevipapel), Vila Velho de Rodao, Portugal 32,000 t/a• Renova, Torres Novas, Portugal (NTT) 35,000 t/a• Ariete, Cava de Tirreni, Salerno, Italy 25,000 t/a• Cartiere della Basilica, Botticino, Italy 15,000 t/a• SCA, Stubbins, UK ‐20,000 t/a

87,000 t/a

© Copyright 2014 RISI, Inc. All rights reserved.33© Copyright 2018 RISI, Inc. | Proprietary Information

Major Capacity Changes (>10,000 t/a) in the WE Tissue Industry, 2018‐2020

2018• Lucart Tissue & Soaps, Aranguren, Bilbao, Spain (restart) 50,000 t/a• SCA, Chesterfield, UK (TAD PM rebuild and restart) 28,000 t/a• Goma‐Camps, Ejeo de Caballeros, Spain, Italy 34,000 t/a• The Navigator Company, Cacia, Aveiro, Portugal 70,000 t/a• Ibertissue (Sofidel), Bunuel, Spain 70,000 t/a• ICT Iberica, El Burgo del Ebro, Zaragoza, Spain 70,000 t/a• Klippans Bruk, Klippan, Sweden 30,000 t/a

352,000 t/aPotential Projects (2019‐2020)• Accrol Paper, Blackburn, Lancashire, UK 60,000 t/a• Confidential, Central Europe 65,000 t/a• Delipapier, Ingrandes, France 60,000 t/a

185,000 t/a

© Copyright 2014 RISI, Inc. All rights reserved.34

Net Capacity Change* and Tissue Capacity Utilization in Western Europe until 2021Capacity closures helped the industry in 2011‐2013, but new projects thereafter cut the trend; outlook is not promising for 2018‐2019

84

85

86

87

88

89

90

91

92

93

94

‐50

0

50

100

150

200

250

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Capa


Thou

sand

Ton

nes




Major Capacity Changes (>5,000 t/a) in the Eastern European Tissue Industry, 2016‐2017

2016• Firma W. Lewandovski, Wloclawek, Poland (20,000 t/a ‐ 15,000 t/a) 5,000 t/a• Syassky, Syasstroy, Russia 38,000 t/a• Tissue Paper, Tbilisi, Georgia 7,000 t/a• JSC Kohavian Paper Factory, Gnezdytchiv, Ukraine 5,000 t/a

55,000 t/a2017• Novak‐Papir, Peruc, Slavatien, Czech Republic 10,000 t/a• Drenik, Belgrade, Serbia 10,000 t/a• Kostenets HHI, Kostenets, Bulgaria ‐26,000 t/a• Kuban‐Papir, Krasnodar, Russia 8,000 t/a• Pol‐Mak, Przemierovo, Poland 25,000 t/a• WEPA Professional, Piechowice, Poland 32,000 t/a• Delitissue (Sofidel), Ciechanow, Poland 70,000 t/a

129,000 t/a


Major Capacity Changes (>5,000 t/a) in the Eastern European Tissue Industry, 2018‐2019

2018• Velvet Care, Klucze, Poland 60,000 t/a• Vajda Papir, Dunaföldvar, Hungary 32,000 t/a• Arkhbum Tissue Group, Vorsino, Kaluga, Russia 70,000 t/a• Drenik ND, Belgrade, Serbia 30,000 t/a• Hayat Kimya Group, Alabuga, Tatarstan, Russia 70,000 t/a

202,000 t/a2019• Higi Papersoft (Drenik), Szolnok, Hungary 30,000 t/a


Net Capacity Change* and Tissue Capacity Utilization in Eastern Europe until 2021New investments from late 2014 onward and slower demand growth caused capacity utilization to decline, which will continue in 2018‐2019

78

80

82

84

86

88

90

92

94

020406080

100120140160180200

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Capa


Thou

sand

Ton

nes




Concluding Remarks• China will continue to be the main driving force of global tissue industry expansion,

although overcapacity is a threat in nearly every region. Project delays will be common.

• North American developments will be characterized by steady and encouraging growth, but also ongoing battles between brands and private labels.

• The Western European tissue business is rather mature, and with population growth limited, growth will remain modest, helped only by some improvement in product penetration.

• Europe had a quiet expansion phase due to the recession, but capacity growth is picking up with investments in Southern and Eastern Europe.

• Eastern Europe still has a lot of potential to grow, and even though the Russian‐Ukrainian conflict in the Donbas region nowhere close to being solved yet, the overall outlook is improving. However, many investments are coming and more are reportedly planned, so no major improvement in capacity utilization can be expected in the next few years.


Thank you for your attention!For more information:

Outlook for World Tissue Businesswww.risi.com/OWTB

World Tissue Business Monitorwww.risi.com/WTBM

US Tissue Monthly Datawww.risi.com/USTM


risi global tissue market outlook - events.risiinfo.com · risi global tissue market outlook ......

Documents