Tissue Trends and Markets

Total world output of sanitary tissue is estimated at just under 20 million tons. The US and Canada represent approx. 36% of world capacity, followed by Western Europe at 26%, Asia & Pacific Rim region at about 25%, and Latin & South America just under 10%. Eastern Europe, Africa and the Middle East cover the remaining share of the tissue capacity.

This paper will cover trends, facts, developments and growth opportunities in various regions of the world, including a general survey of the global tissue industry. I hope the information we provide, together with your knowledge of the tissue sector, will contribute to your own global vision and give you a better insight into what you could expect entering the 21st Century.

The 1990s represent a very significant decade of changes for the tissue industry. A number of traditional import countries are now producing tissue and some have joined the international arena. 1994 & 1995 were the years of highest fiber cost. 1995 was the year of mega merger and consolidation trends which will further change the direction of global competition. The KC and Scott merger represent a massive change not only in the US, but also in many international markets.

The new capacity announcements in the US and Europe are unlikely to have an impact on the industry operating rates. Much of the new capacity due on stream in the States will be offset by shutdowns of older machines. Given the current favorable fiber cost, a more balanced available capacity and demand equation, we anticipate a healthier market with more stable pricing and improved profit rates for the tissue industry.

Recycled fiber furnish is expected to be the dominant fiber content for production of tissue in the US, Mexico, Europe and other markets. Low cost producers of recycled tissue can witness higher returns as more demand is shifting towards recycled grades of tissue.

The mature markets such as the US, Western Europe and Japan will expand at a slower pace. However, market penetration and expansion of tissue in the emerging and developing markets will be at an accelerated rate. China, Mexico, Russia, Asia-Pacific markets, South America and some Eastern European countries will represent the fastest growing markets for the coming years.

The challenges ahead of us are how to increase production output and provide a higher quality product, while lowering production cost and maintaining a cleaner environment.