The great changes of the last two years have brought about a new, more careful and conscious way of considering tissue, also on the part of the consumer. A product capable of protecting health and ensuring hygiene. Despite its acknowledged essentiality, the industry producing this product continues to suffer from the rising costs of raw materials and energy. The result is a sector that will have to find new stability.
A market in trouble for a variety of contingent and economic reasons, and a worrying situation linked to supplies of materials and, even more so, of energy. The framework within which the industry in general – and the paper industry in particular – must currently operate is one of the most complex in recent years. However, some certainties remain firmly in place and constitute a solid foundation for European manufacturing industries: the quality of their products. And the first element is the technology applied to the processing phases. In this brief focus we will talk about tissue converting.
The European tissue trend
But let’s start with a quick overview of the situation. According to data referred to at Miac 2021 by Assocarta specifically by Tissue Gruppo president Guido Pasquini, who spoke about it at the conference dedicated to tissue, at European level production stood at 7.9 million tons with a production increase of 105 thousand tons, equal to 1.7%. A general context with some interesting differences within it.
The United Kingdom shows a situation that ends up affecting the other countries on the continent, as it shifts the balance that has existed up to now. The British data speaks of a drop in production that, although only 20 thousand tons, is equal to 2.6%; a result that is sufficient to increase the need to import tissue paper from other countries. In particular, those who are increasing their export quota include Turkey and Indonesia. So much so that, as Pasquini pointed out, in the last few months important new installations of paper machines have been announced in these countries, precisely to compensate for the production gap created by Great Britain’s exit from the European Union.
This trend in the growth of non-EU production is also confirmed by looking at the decreasing data from Cepi (Confederation of European Paper Industries) the European association of paper manufacturers that groups 18 countries in the continent, i.e. Austria, Belgium, Finland, France, Germany, Italy, Norway, the Netherlands, Poland, Portugal, the United Kingdom, the Czech Republic, the Slovak Republic, Romania, Slovenia, Spain, Sweden, Hungary. Overall, a decrease of 3.9% must be recorded (figure 1). The top two tissue paper producers in the region are Italy and Germany, which have 20.4% and 19.3% of the total produced in 2020, respectively (figure 2), and which will remain at the top in 2021.
While Europe is declining, other parts of the world are proving far more vibrant. In Latin America, Risi forecasts a growth of around 4% by 2020, rising to 8% for North American countries.
Different trends, motivated by various factors that may be related to what has happened in the last two years following the pandemic. Mr. Pasquini of Assocarta speaks of possible changes in market trends that may have consequences in the years to come and that in the meantime have led to a general reduction in volumes and a return to pre-pandemic values in 2019.
The biggest – and most worrying – impact now is cost increases. Already between 2020 and 2021 there has been an explosion in the cost of everything raw material related, followed by a surge in all other cost components due to the post lockdown recovery. Plastics, which are used to package tissue products, chemical additives, transport, pallets have all gone up. Not to mention energy components – electricity and natural gas – which sky-rocketed in late 2021 and early 2022.
Contingencies that, of course, affect the entire world and industry as a whole, but which must necessarily be taken into account when talking specifically about certain manufacturing sectors. The paper industry, in particular, is affected by the problem of energy costs, as it is energy intensive.
The cost of energy will have a major impact on what happens in the coming months. Certainly, the market will shift to new equilibriums and, as far as European-made tissue is concerned, there are already forecasts of a substantial increase in production between now and 2024, with several new productions putting more than 1.2 million tons on the market in three years, an increase of 20%.
Despite the great difficulties faced in the last two years – mainly economic – the profound changes that have taken place have improved the perception of the tissue product by the market and consumers. There has been recognition of the essential nature of a sector that, especially in the peculiarities of household and sanitary paper, represents an important tool for hygiene and for safeguarding people’s health.