RISI Global Tissue Market Outlook

Transcription

1 RISI Global Tissue Market Outlook With a Focus on Europe What Is Going On? RISI European Conference, Barcelona, Spain March 2017 Esko Uutela Principal, Tissue Copyright 2018 RISI, Inc. Proprietary Information

2 Esko Uutela Principal, Tissue 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 Copyright 2018 RISI, Inc. Proprietary Information 2

3 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

4 RECENT GLOBAL TRENDS AND OUTLOOK Copyright 2018 RISI, Inc. Proprietary Information 4

5 World Tissue Consumption by Region Market 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 E.Europe 5.4% N&M East 4.0% Africa 2.1% Oceania 1.2% Asia Far East 6.0% Japan 5.5% N. America 25.0% L. America 11.1% W. Europe 18.3% China 21.3% Global Consumption: 36.4 Million Tonnes (2016) Copyright 2018 RISI, Inc. Proprietary Information 5

6 Growth in the Global Tissue Market Relatively stable growth until the Great Recession in 2009, recent years strong Thousand Tonnes 1,600 Volume Growth 1,400 Relative Growth 1,200 1, Relative Growth, Percent per Year Copyright 2018 RISI, Inc. Proprietary Information 6

7 Volume Growth of Tissue Consumption, China accounted for 41% of growth, North and Latin America share second place Thousand Tonnes 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, Total Global Growth: 10.5 Million Tonnes (1.05 Million Tonnes per Year) Copyright 2018 RISI, Inc. Proprietary Information 7

8 Long Term Growth Trends in the Global Tissue Market International trade in tissue shows higher growth rate than tissue consumption, a clear sign of business globalization. Parent roll trade has accelerated in recent years. 6 Growth Rate, Percentage per Year Tissue Consumption Total Tissue Trade Parent Roll Trade Copyright 2018 RISI, Inc. Proprietary Information Copyright 2016 RISI, Inc. Proprietary Information 8

9 Anticipated Growth in the Global Tissue Market Tissue consumption benefitting from improving global economic growth, but there are also uncertainties ahead Thousand Tonnes 1,800 1,600 1,400 1,200 1, Volume Growth Relative Growth Relative Growth, Percent per Year Copyright 2018 RISI, Inc. Proprietary Information 9

10 NORTH AND LATIN AMERICAN OUTLOOK Copyright 2018 RISI, Inc. Proprietary Information 10

11 North American Tissue Business Strong in The AfH sector in particular has benefitted from the strong economy and low gasoline prices Growth Rate, Percent per Year Average growth accelerating from 1.5% to 1.75% per year 2.0 Copyright 2018 RISI, Inc. Proprietary Information 11

12 Expected Growth in US Tissue Consumption by Business Sector At 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 Million Tonnes Minor growth of 0.4% per year Market Volume Growth of 5.9% per year Growth of 2.3% per year 0.0 AH Brands Retailer Labels AfH Copyright 2018 RISI, Inc. Proprietary Information 12

13 Major Tissue Capacity Changes in North America, 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/a 2019 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/a Potential 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

14 Net Capacity Change* and Tissue Operating Rate in North America Last 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 Thousand Tonnes A lot of new capacity coming on stream that will affect ; utilization rate will head south if no further closures occur Capacity Change Capacity Utilization Capacity Utilization, Percent *Based on committed projects only Copyright 2018 RISI, Inc. Proprietary Information

15 Main Latin American Tissue Markets, 2016 The five largest markets accounted for 77% of total consumption Costa Rica 2% Ecuador 2% Guatemala 2% Venezuela 4% Peru 4% Colombia 5% Chile 6% All Others 9% Brazil 31% Argentina 8% Mexico 27% Total Market Size: 4.0 Million Tonnes Copyright 2018 RISI, Inc. Proprietary Information 15

16 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 , Brazilian recession the main reason 12 Growth Rate, Percent per Year Average Growth 4.4%/a Copyright 2018 RISI, Inc. Proprietary Information Copyright 2016 RISI, Inc. Proprietary Information 16

17 Recent Growth of Tissue Consumption in the Five Largest Latin American Markets Significant annual variation in annual growth rates of apparent consumption typical in every major country Market Growth, Percentage from the Previous Year Brazil Mexico Argentina Colombia Chile Copyright 2017 RISI, Inc. Proprietary Information Copyright 2016 RISI, Inc. Proprietary Information 17

18 Expected Volume Growth of Latin American Tissue Demand by Main Country, Brazil is projected to recover in Thousand Tonnes ??? Copyright 2018 RISI, Inc. Proprietary Information 18

19 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 Thousand Tonnes Capacity Change Capacity Utilization Capacity Utilization, Percent * Based on committed projects only Copyright 2018 RISI, Inc. Proprietary Information 19

20 ASIAN OUTLOOK Copyright 2018 RISI, Inc. Proprietary Information 20

21 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 Growth Rate, Percent per Year Average growth: 8.0% per year Recently, growth has been slowing, but 2015 was an exception /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/ Copyright 2018 RISI, Inc. Proprietary Information 21

22 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 Thousand Tonnes per Year 2,500 2,000 1,500 1, ,000 1,500 * PM start up/learning curves considered. Effective Capacity Change* New Projects Closures Net Capacity Change Copyright 2018 RISI, Inc. Proprietary Information 22

23 Net Capacity Change* and Capacity Utilization in the Asian Tissue Industry Overcapacity is obvious, although project delays may help Thousand Tonnes 2,500 2,000 1,500 1, Capacity Change Capacity Utilization Capacity Utilization, Percent *Based on committed projects only, learning curves considered. Copyright 2018 RISI, Inc. Proprietary Information 23

24 WESTERN AND EASTERN EUROPEAN OUTLOOK Copyright 2018 RISI, Inc. Proprietary Information 24

25 Western European Tissue Market Showed Positive Recovery in 2015, 2016 Disappointing Major variations in growth from year to year Growth Rate, Percentage per Year Recession over but no consistent return to past growth rates Copyright 2018 RISI, Inc. Proprietary Information 25

26 Volume Growth of Western European Tissue Markets by Main Country, In the past 10 years, growth has been strongest in Germany, followed by the UK and France Thousand Tonnes Copyright 2018 RISI, Inc. Proprietary Information Copyright 2016 RISI, Inc. Proprietary Information 26

27 Eastern European Tissue Market Growth Negatively Affected by the Political Tension The Russia Ukraine conflict has taken its toll also in the tissue sector, but 2016 was surprisingly strong, mainly thanks to Poland Growth Rate, Percentage per Year Growth in weak and far from the trend line Copyright 2018 RISI, Inc. Proprietary Information 27

28 Volume Growth of Eastern European Tissue Markets by Main Country, In the past 10 years, Russia and Poland have clearly been driving the growth, followed distantly by Romania and Ukraine Thousand Tonnes Russia Poland Romania Ukraine Czech Rep. Hungary Serbia Bulgaria Belarus Croatia All Others Copyright 2018 RISI, Inc. Proprietary Information Copyright 2016 RISI, Inc. Proprietary Information 28

29 Growth Rate of Western European Tissue Consumption, We expect relatively slow growth to continue in the next years 3.0 Average Annual Percentage Growth Forecast Copyright 2018 RISI, Inc. Proprietary Information 29

30 Volume Growth of Western European Tissue Markets by Main Country, In the next five years, volume growth will be largest in the UK, Italy and Germany Thousand Tonnes Copyright 2018 RISI, Inc. Proprietary Information Copyright 2016 RISI, Inc. Proprietary Information 30

31 Growth Rate of Eastern European Tissue Consumption, The outlook is rather optimistic for tissue market growth in the next few years Average Annual Percentage Growth Forecast Copyright 2018 RISI, Inc. Proprietary Information 31

32 Volume Growth of Eastern European Tissue Markets by Main Country, In the next five years, volume growth will be largest in Russia, followed by Poland, Romania and Ukraine Thousand Tonnes Russia Poland Romania Ukraine Hungary Czech Rep. Belarus Croatia Bulgaria Serbia All Others Copyright 2018 RISI, Inc. Proprietary Information Copyright 2016 RISI, Inc. Proprietary Information 32

33 Major Capacity Changes (>10,000 t/a) in the WE Tissue Industry, 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/a 2017 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 2018 RISI, Inc. Proprietary Information Copyright 2014 RISI, Inc. All rights reserved. 33

34 Major Capacity Changes (>10,000 t/a) in the WE Tissue Industry, 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/a Potential Projects ( ) 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

35 Net Capacity Change* and Tissue Capacity Utilization in Western Europe until 2021 Capacity closures helped the industry in , but new projects thereafter cut the trend; outlook is not promising for Thousand Tonnes Capacity Change * Based on committed projects only Capacity Utilization Capacity Utilization, Percent Copyright 2018 RISI, Inc. Proprietary Information 35

36 Major Capacity Changes (>5,000 t/a) in the Eastern European Tissue Industry, 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/a 2017 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 Copyright 2014 RISI, Inc. All rights reserved. 36

37 Major Capacity Changes (>5,000 t/a) in the Eastern European Tissue Industry, 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/a 2019 Higi Papersoft (Drenik), Szolnok, Hungary 30,000 t/a Copyright 2014 RISI, Inc. All rights reserved. 37

38 Net Capacity Change* and Tissue Capacity Utilization in Eastern Europe until 2021 New investments from late 2014 onward and slower demand growth caused capacity utilization to decline, which will continue in Thousand Tonnes Capacity Change * Based on committed projects only Capacity Utilization Capacity Utilization, Percent Copyright 2018 RISI, Inc. Proprietary Information 38

39 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. Copyright 2018 RISI, Inc. Proprietary Information 39

40 Thank you for your attention! For more information: Outlook for World Tissue Business World Tissue Business Monitor US Tissue Monthly Data Copyright 2018 RISI, Inc. Proprietary Information