Global tissue paper demand growth forecast at 4%-5%; capacity expansion remains focused on China, which will account for nearly 62% of the total increase in 2013 as regions like US slow down, pause to absorb new capacity amid market concerns
April 5, 2013
(Industry Intelligence Inc.)
China has been the predominate force in the tissue paper products marketplace as far as forecasts for demand and production growth and that will continue this year. However, at least a temporary lull has occurred this year as far as announcements for future expansions in the U.S.
In the past several weeks, many of the future tissue paper capacity expansions announced have come from regions other than the U.S. They have come from Chile, Russia and Turkey, as well as from China.
The world market for tissue is valued at more than 410 billion Swedish kronor (US$62.9 billion) and is growing by 5% annually, according to the 2012 annual report of Swedish tissue producer Svenska Cellulosa Aktiebolaget (SCA).
SCA plans to expand its tissue brands globally. SCA plans to own and develop between six and 10 global brand platforms, each with more than 10 billion kronor in annual sales, according to the company.
Global growth for tissue paper products was forecast at 4% annually and the industry turnover was estimated at US$80 billion in a March 24 article in The Independent, a London-based newspaper, which at the time was reporting from the Tissue World conference.
In Spain, tissue paper product sales increased by 2% in 2012. This compares to a projected average annual growth rate of 8.3% in China until at least 2021, according to the article covering the conference in Barcelona, Spain.
China sees tissue overcapacity in 2013 or 2014. However, China’s market isn’t growing fast enough to absorb all of the tissue paper production capacity coming onstream. The output will begin to exceed China’s ability to consume it in 2013 or 2014, a China Paper Association official recently stated.
Over the next five years, tissue paper consumption in China is forecast to grow by 10%-12% yearly in the next few years, according to the official, who was quoted in a March 7 article on ChinaPaperOnline.com.
The world market for consumer tissue is growing at about 5% annually and now totals about 310 billion kronor, while the away-from-home tissue market worldwide is valued at about 100 billion kronor and is growing by slightly more than 3% a year, according to SCA.
The company notes in its 2012 annual report that growth in mature markets is in the single digits but considerably higher in emerging markets, both for consumer and away-from-home tissue products.
China’s tissue expansion far outpaces others. This year, China is expected to add 1.184 million tonnes/year of new tissue paper production capacity, which is 61.7% of the global total projected to come onstream in 2013, based on data in MarketPulpMonthly’s December 2012 report.
The next biggest portion of tissue production capacity increases this year are in South America, with 15.2% of the total, followed by Europe and the U.S., each with a 9.3% share. Mexico, South Korea and Australia have 25,000-30,000 tonnes/year increases each.
In recent weeks, Shandong Sun Paper Industry Co., in partnership with Yanzhow Xudong, and Asia Pulp and Paper Co. have separately announced tissue capacity expansions in China, together totaling 156,000 tonnes/year. Startup dates have not been set.
Earlier this year, Hengan International Group Co. Ltd. commissioned Metso Corp. to supply four tissue machines in China totaling 240,000 tonnes/year of capacity. The four machines will start up in turn, with the first in Weifang, China, this December.
Shandong Chenming Paper Holdings Ltd. also announced this year plans to add a 136,000 tonnes/year tissue paper machine in Wuhan, China, but set dates were not revealed.
Tissue projects planned in other countries. More recent announcements include two that will be in Russia, both at greenfield sites and both scheduled to come online next year.
Syktyvkar Tissue Group plans by mid-2014 to add a 30,000 tonnes/year tissue line in Semibratovo, Russia, and Turkey-based Hayat Kimya plans a 70,000 tonnes/year tissue line for Alabuga, Russia, to start in second-half 2014.
Hayat Kimya also has ordered a 70,000 tonnes/year tissue line for Mersin, in southern Turkey, but does not plan for it to come onstream until late 2015.
Finally, Chilean packaging producer Forestal y Papelera Concepción SA recently announced plans to enter the tissue market with a new machine to be installed at its mill near Concepción, Chile, with startup set for late 2014.
U.S. stops to absorb startups in recent months. No tissue expansion announcements have come from the U.S. this year. The market is trying to absorb five new tissue production startups completed between last fall and early this year.
The most recent of these startups known to have occurred was at Kruger Products LP’s mill in Memphis, Tennessee, where a 60,000 tons/year tissue machine came online in February.
Two startups were confirmed to have happened last December. These included a 75,000 tons/year machine at Wausau Paper Corp.’s mill in Harrodsburg, Kentucky and a 70,000 tons/year machine at Clearwater Paper Corp.’s mill in Shelby, North Carolina.
First Quality Tissue SE LLC was to start up another tissue machine at its mill in Anderson, South Carolina, in late 2012, but this was not confirmed.
A fifth tissue machine was brought onstream in the U.S. in recent months at ST Tissue’s Franklin, Virginia, mill, according to a Feb. 22 announcement by the supplier of the machine, PMT Italia SPA.
Cascades eyes U.S. for its future expansion. Cascades Inc. stated in releasing its fourth-quarter results late in February that it expects some modest weakness in tissue prices in the near- to mid-term, but was seeing a firm market at the time due to continued strong demand.
The company said that the market was expected to be competitive in first-quarter 2013, especially in the U.S., but that it was seeing increased volumes in most market segments. It plans to continue expanding and will look to the U.S. for Cascades’ growth.
Cascades does not have any tissue expansion plans currently but will be looking more closely at possible acquisitions or to grow internally once it has completed its reorganization, said Alain Lemaire, the company’s CEO at the time.