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Global Tissue Market
Workshop Fibria-ABTCP – 30
th
April. 2013
Daniela dos Reis – Innovation Center R&D Engineer
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Global Tissue Consumption
Development from 2001 to 2015
0
5
10
15
20
25
30
35
40
0
1
2
3
4
5
2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001
Year on year growth in %
Source: RISI (Status: 2011-03)
Average growth 2001-2008: 3.6%
Before the economic crisis => average growth of 3.6%
Expected to grow till 2015 => 4.1%
Expected average growth 2010-2015: 4.1%
In mio. tonnes
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Economic Development
Urbanization
Living and Hygiene Standards
Population Growth
Substitution?
Drivers of Tissue Consumption
How are the medium-term and long-term perspectives?
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Total Tissue consumption 2011: 30.4 mio. tonnes
Tissue Consumption
Per Region
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Tissue Consumption
By Region
0
2
4
6
8
10
12
14
2009 2000 2006 2003
Asia-Pacific incl. ME
Africa
Latin America
Eastern Europe
Western Europe
North America
2012 2015
In mio. tonnes
Since 2008, Asia-Pacific incl. ME is the largest Tissue consuming region
NA continue to grow even by being most mature market
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Total additional Production 2012-2015: 4.0 mio. tonnes
40% of expected additional production until 2015 => expected to be in China
USA will continue to grow strongly (only behind China in tons): mainly in Premium
Middle East
Mexico
Italy
Indonesia
Brazil
Eastern Europe*
USA
China
Other
23%
4%
4%
4%
9%
10%
3%
Global Tissue Market
Production Growth – Additional Per Region: 2012 – 2015
40%
3%
Brazil & Mexico: driving LA expansion => quality demand increasing rapidly
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0
5
10
15
20
25
América do
Norte
Europa
Ocidental
Japão Oceania América
Latina
China Europa
Oriental
Oriente
Médio
Asia Africa
Worldwide average: 4.15 kg/capita
Emerging markets
Developing markets: quantity
Mature Markets: quality + quantity
Most mature markets: Premium & Ultra Premium quality
World Tissue Consumption 2010
Per capita consumption per region
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Tissue Consumption Growth
Per Capita in selected Countries
In kg / capita
0.8 0.7
0.1
Brazil World
total
5.0
4.3
0.1
South
Korea
n/a
3.0
5.2
4.0
6.0
4.9
10.4
9.8
15.3
14.6
Germany
19.7
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USA
25.0
24.1
India China Russia Indonesia Japan
2015
2011
Even high developed countries continue to increase per capita consumption
Still very low per capita consumption in Asia & EEUR => huge growth potential
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In mio. tonnes
Growth in Consumer Tissue is expected to be larger than in AfH
End-Consumers - World
Tissue Consumption Forecast by End-Use
6.2
19.6
2019
41.8
7.9
2014
26.5
2012
3.7%
34.4
9.3
32.5
2001
21.7
5.4
16.3
6.6
21.6
28.2
31.8
7.3
2006
25.8
24.5
2009
Away from Home
Consumer
Av. Growth
2001-2019
3.9%
3.0%
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Share of private label in Retail Tissue in % (Retail value based on retail sales price)
Private label is popular in Western Europe and is getting more popular in
NA but, with Premium quality
Tissue Market - World
Share of Private Label in Retail Tissue
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
Total Asia-Pacific
China
Eastern Europe
Japan
North America
World
Western Europe
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In mio. tonnes
Toilet Tissue shows the highest consumption growth rates
End-Consumers - World
Tissue Consumption Forecast by End-Use
Source: RISI (Status: 2011-02)
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5
10
15
20
25
30
35
40
45
2009
28
+3.7%
2019
42
2014
34
2012
32
2006
26
2001
22
Sanitary and Other
Napkins
Toweling
Facial/Hankies
Toilet Tissue
Av. Growth
2001-2019
+4.2%
+3.1%
+3.9%
+2.2%
-2.1%
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Total World Capacity in 2011 in mio. tonnes: 34.7
KV, GP and SCA are the by far largest Tissue producers
Largest Tissue Producers
World
Others
Sofidel
APP
P&G
SCA
Georgia-Pacific
Kimberly-Clark
12%
11%
9%
5%
4%
3%
56%
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Tissue Paper by Region
Characteristics and Trends
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Most important drivers of Tissue consumption at different stages of development
12 11 10 9 8 7 6 5 4 2 3 20 21 22 23 24 13 14 15 16 17 18 19 1 0
Tissue
consumption/
capita in kg
Quality
Upgrades,
infrastructure,
retail system
Quality Upgrades and product
penetration levels decisive for further
growth
GDP,
Population,
Urbanization
GDP/capita
Tissue End-Consumers – World
Drivers of Tissue Consumption
Source: RISI
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Structured Paper
High Softness
High Absorbency
Capacity
1-ply and 2-ply
Virgin Fibre
Superficial Softness
Absorbency is
increasing
Same quality as EUA
High Strength
Several plies (3 to 5)
Virgin Fibre
England- Strong Private
Labels
Tissue Paper Premium
Current Consumer Perception in each Region
Virgin Fibre
Superficial Softness
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!Most Mature market
!Strong dominance of Brands
!Premium did not suffer with last recession
!Supermarkets requiring Premium Private Label
!PL business will grow in the next few years
!3-ply toilet not successful against Premium
!New investments resulting in old TM & mill closures
!Business has grown based on quality upgrading, new
product launches and modified product re-launches, in
addition to innovative marketing by industry leaders
Tissue Market - North America
Trends
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Tissue Market - Europe
Trends
! Market expansion exceed recession tumble
! Germany leading growth by far (2010)
! Quality demand in WE; high kg/capita: 15,5
! High PL share (50%) in WE; cost pressure
!Towel tissue as major driver for premium
!High GDP growth in EE stimulates demand
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! The total Chinese Tissue market is expected to grow by 12% annually in the
2005 to 2015 period.
! App has tripled its market share in the last 6 years and planning a higher
global performance
! More demanding pollution regulations by Chinese authorities
! Biggest players are investing in new and modern machines
! Infrastructure improvements and advances in the retail system are
necessary to improve the business
! Cultural issues in India are still a barrier in the Tissue consumption
Tissue Market – Asia and China
Trends
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! Strong market expansion over the last years
! Mexico, Brazil & Colombia driving expansion
Towel
! Production of Premium still low but growing
! Only 1 premium product in kitchen towel
! Premium on AfH towel growing strongly
Toilet
! Premium still not being sold in Latin America
! Some countries migrating from 1-ply to 2-ply & 3-ply
! Future migration can follow Europe or USA
Tissue Market - Latin America
Trends
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!2-ply Tissue Paper in 2010
! Production increased by 15,4 % in 2010
! 25,5% of 4708 bi of rolls
! 39% of Tissue Business Sales
!Demanding quality products
!3-ply Tissue paper has been introduced into the market
!Different consumption per capita in each region
! South / Southeast: 10 kg/year
! North/ Northeast: < 1 kg/year
! Average: 4.5 kg/year
! Production and Converting growth in the regions North and
Northeast
Tissue Market – Brasil
Trends
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Tissue quality = Eucalyptus fibers
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Tissue Grade Quality Requirements
Toilet Softness, Bulk
Facial Softness, Tensile Strength
Napkin Bulk, Tensile Strength
Towel Absorbency Capacity, Bulk, Wet Tensile Strength
Tissue Market
Main Quality requirements per grade
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Most common fibers
Fiber type Characteristics
After-press
dryness
Hardwood:
Eucalyptus, Birch,
Aspen
handfeel, good formation, bulk,
structural softness, lower
strength
STD
Softwood: Pinus, Spruce tension strength, bad formation =
CTMP
absorbency, brightness
reversion
<<
Recycled
Tension strength, dirt, lower
bulk, lower handfeel
<
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Tissue manufacturing introduction | Dalcio
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• Coarseness is the most important parameter for tissue
• Represents a mass unit over certain length of fiber (µg/m)
• Lower coarseness means more flexible and thin fiber,
which fill the paper structure spaces
• Lower coarsness means:
– higher softness
– higher bulk
– better formation
Coarseness
Hardwood fibers have low coarsness!
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Average length and coarseness
Fiber type
Length
[mm]
Coarseness
[mg/100m]
Southern Pine 4,0 30
Radiata Pine 2,8 22
Scandinavian Pine 2,6 20
Spruce 3,0 18
Cedar 2,8 16
Birch 1,0 10
Eucalyptus 0,8 8
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Most common composition
Tissue type Composition
Toilet
30% SW / 70% HW
100% HW
100% DIP
Facial
50% SW / 50% HW
30% SW / 70% HW
Napkin
40% SW / 60% HW
100% SW
Towel
70% SW / 30% HW
70% SW / 30% CTMP
100% SW
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Tissue Market
Shortage of Recovered Fiber Sources
Tissue producers are big consumers
of recovered paper, especially
woodfree printing and writing
paper. But those papers are
now in much shorter supply due
to ongoing substitution from
paper to electronic media.
Rising Tissue demand coupled with
falling recovered paper supply
pushes Tissue producers toward
virgin fiber utilization.
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12
14
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20
22
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2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Tissue Demand Woodfree P&W Paper Demand
Demand for Tissue and Woodfree P&W Paper
North America & Western Europe in Million Short Tons per Year
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Tissue Market Summary
• Globally, tissue business is expected to grow at 4% per year in the next few
years and also in the long term.
• Different stages of development in each region with specific needs.
• Global tissue industry uses approx. half recycled fiber and half virgin pulp
• Wood pulp will even gain some share from alternative raw materials
! Restricted availability of recovered paper leading to higher costs and lower
fiber quality.
! Increasing demand of quality products not only in developed countries
• Hardwood fiber, mainly Eucalyptus, has presented best characteristics to meet
tissue quality demands
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Contact:
Daniela dos Reis R. Del Monaco
R&D Engineer - COC Tissue
Fone +55 11 3944-4078
daniela.reis@voith.com