ETS presentation

MIAC
Lucca, Italy
Fanis Papakostas

11 Oct. 2017

Public
 ETS presentation / MIAC 2017
Lucca, Oct. 2017
ETS PRESENTATION SECTIONS

•Top global Tissue Paper Market info - Good news

•Challenges – opportunities – Watch out
•ETS
Who we are
Scope strategy and projects,
How can we help.
•Example of research project
•DATA Audit AFH example.
•Key take out
•Questions
Public
Top global Tissue Paper Market info

The NEWS for our Tissue Paper

family are GOOD!

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Growth across the world’s regions
is here to stay

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Growth champions are outside
North America and W. Europe

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 Capacity tracking

• All topglobal Tissue

Producers continue
to add capacity.
•Italy remains the
top European
producer followed by
Germany and France.

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 Growth across Europe too, but
Western Europe stays in the area of 1%

*High lever of imports from Turkey to Greece and UK (320 tons)

sacrificed growth potential in WE.

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 ETS presentation / MIAC 2017
Wrap up and Key Market predictions
Regions:
•Developed markets (W. Europe and N. America) will continue to grow although
quite modestly (1-2% pa)
•China will keep growing steadily while remaining the biggest and India is the one
with the highest growth potential.

Consumer:
•GDP, population, habits formation, product features awareness, and innovation
will continue to be key growth drivers.
•Private label will further improve the quality / price balance and will keep
growing in the developing markets also helped by the concentration of the
organized trade.

AFH
•The growth will continue especially in the developing markets driven by product
innovation, awareness of Tissue products advantages and customer service
solutions especially in the developed markets.
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 ETS presentation / MIAC 2017

Yes, overall News are Good, BUT…

1) Pressure on profit margins will continue (trade,
competition – key drivers)
2) External competition coming from other
industries (electric dryers, wipes, cloth…).
3) Continuous need for Optimization of our already
good Environmental footprint.
4) Need for innovation along the business circle will
be higher than ever.

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 ETS presentation / MIAC 2017

Questions to ask ourselves:

“What is our understanding of our

customers, shoppers and product users
perception about Tissue paper?”

“What do they know about our hygiene

advantages and our sustainability levels?

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 ETS presentation / MIAC 2017
Challenges / opportunities

Here are some watch outs…

…which require common effort

to be handled properly.

Public
 About ETS:

•The European Tissue Symposium (ETS) - founded in 1971

is a trade association, organized as a non-profit association
under the Belgian law and established in the International and
European Union environment of Brussels, Belgium.

•The members of ETS represent the majority of tissue paper

producers throughout Europe. and about 90% of the total
European tissue production.

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Who we are :

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 ETS presentation / MIAC 2017
The scope of ETS is changing

Up to recently, the ETS's scope was to:

•Monitor events and developments affecting the Tissue
sector in Europe and ensure that Member Companies are
informed about it.
• deal with relevant environmental and technical aspects,
European norms, etc. that have an impact on the Tissue paper
industry
•Working with other Associations like Assocarta and EU
Institutions.

Public
 ETS presentation MIAC 12 Oct. 2017

In the last years, the scope of ETS has been enlarged to

promote the use of tissue products by:
•Deepening scientific knowledge on the use of tissue products,
by carrying out advanced studies with the most authoritative
institutions, on Hygiene, LCA / Carbon Footprint / Food contact,
but also consumer preferences vs. alternative usage, etc.
•Communicate Industry Position Papers on Relevant Topics like
Hygiene and Sustainability.
•Use conferences, trade fairs, press releases and especially
Internet to spread the world with the right messages.
•Collect data and organize Audits which after certain processing can be
published to all the contributing members helping them to improve level of
understanding. e.g. AFH Sales data, or Mill environmental information.
•In Italy , on top of our excellent collaboration with Assocarta, we are starting
a new one with “iT’s tissue” – the Tissue Machines producers from which we
may enjoy the outcome of some very useful projects.

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 ETS presentation / MIAC 2017
Need to keep making the world go around
We’ll deal more and more with:
Sustainable Sustainable distr/tion
production and customer
service

Sustainable Sustainable management of

resourcing waste after use

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 Interesting Research study
example
on
User’s behaviour and perception

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 ETS presentation / MIAC 2017

Thanks to our investment on research, the ETS members

now have access to information like:

the different preference rates of the users for each hand

drying system per country and by age group for:

Italy, UK , Germany, France, Sweden Finland

as well as…
the key reason of their preference!

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 Representative example
on
AFH European Sales Data Collection
project while maintaining
confidentiality

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 ETS relevant projects
AFH European Collection project

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AFH European Collection project

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 ETS presentation / MIAC 2017
Key take out

The more the World knows that Tissue producers provide:

Convenient Hygienic Drying - Sustainably,
the better will be!

•This work is HUGE and can NOT just be an individual effort.

•In ETS we work hard, using any resources available, to support our
members in this direction.
•Thanks to the team, so far a lot has been achieved until now.
•We are happy to welcome new members on board and amplify the
benefits of our achievements for the Tissue family.

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 THANK YOU ALL

Vi auguro di godere di una

conferenza costruttiva
Questions

Public
NEW TISSUE CAPACITY WITH SIGNIFICANT
COMPETITIVE EDGE
MIAC Tissue Conference, October 11, 2017
Pirkko Petäjä and Mikko Helin
NEW TISSUE CAPACITY WITH SIGNIFICANT COMPETITIVE EDGE

 Continuing market growth allows for new projects to emerge, but the capacity additions
tend to focus on certain regions tightening the local competition

 Many new investments have a competitive edge based on economies of scale,

premium technology and/or an advanced energy concept

 Integration of tissue production with hardwood pulp is increasing, especially among

new entrants that base the entry on low manufacturing costs

 Competitive edge based on technology advantage or pulp integration can be significant

 Cost optimization is a continuous process – digitalization can be the next major step

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NEW TISSUE CAPACITY WITH SIGNIFICANT COMPETITIVE EDGE

 Continuing market growth allows for new projects to emerge, but the capacity additions
tend to focus on certain regions tightening the local competition
– The tissue demand is growing all over the world, the global growth rate being some 3%/a. Asia,
especially China, is driving the growth
– Market growth drives investment pace, but for instance China is adding significant volumes,
surpassing market demand
– Also in mature markets the investments tend to concentrate on certain hot spots. The tightening
competition is urging the producers to search for new competitive advantages and cost savings
 Many new investments have a competitive edge based on economies of scale,
premium technology and/or an advanced energy concept
 Integration of tissue production with hardwood pulp is increasing, especially among
new entrants that base the entry on low manufacturing costs
 Competitive edge based on technology advantage or pulp integration can be significant
 Cost optimization is a continuous process – digitalization can be the next major step

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GLOBAL TISSUE DEMAND
Demand is forecast to grow by some 3%/a from 2015 to 2030. North America and
Europe account today for 50% of the demand whereas Asia’s share is forecast to
increase from 37% in 2016 to 45% in 2030

Note: Middle East included in Asia. Other category comprises Oceania and Africa.

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WHERE ARE THE INVESTMENTS
Market growth drives investment pace, but for instance China is adding significant
volume, surpassing market demand
Base Capacity and Additions : 2016-2018
Million tons/a
25

+4.1
Asia Europe North America Latin America
20

15

+0.6
+0.5
10

+0.4
5

0
2015 New 2015 New 2015 New 2015 New
capacity capacity capacity capacity
2016-18 2016-18 2016-18 2016-18

Note: Middle East included in Asia. Other category comprises Oceania and Africa. Capacity closures have been taken into account.

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INVESTMENT HOT SPOTS IN EUROPE
In CEE and Iberia the competition tightens urging the producers to search for new
competitive edge and cost savings

Central Eastern Europe: Poland, Czech, Slovakia, Croatia, Ukraine, Hungary, Belarus, Moldova, Bulgaria, Albania, Macedonia, Bosnia-Herzegovina,
Slovenia, Serbia, Baltics and Romania.
Rest of Europe: Austria, Belgium, Denmark, Greece, Ireland, Netherlands, Switzerland, Nordics, Russia, Other CIS

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NEW TISSUE CAPACITY WITH SIGNIFICANT COMPETITIVE EDGE
 Continuing market growth allows for new projects to emerge, but the capacity additions
tend to focus on certain regions tightening the local competition
 Many new investments have a competitive edge based on economies of scale,
premium technology and/or an advanced energy concept
– Large machines account for most of the new capacity in the NA markets while many small PMs
are still installed in Europe. Even very small machines are common in the emerging markets
– In the mature markets the technology concepts are more varied, while conventional technology
is still predominant in the emerging markets
– The new textured tissue is entering the market both in North America and Europe. There is also
a new TAD boom in NA. Premium quality demand is growing both in NA and Europe, and
expanding also to the private label segment
– The largest market share and installed capacity of structured tissue is still in North America
– Investment in an energy efficient technology can provide a competitive edge
 Integration of tissue production with hardwood pulp is increasing, especially among
new entrants that base the entry on low manufacturing costs
 Competitive edge based on technology advantage or pulp integration can be significant
 Cost optimization is a continuous process – digitalization can be the next major step

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SCALE OF NEW CAPACITY
Large machines dominate in NA while in Europe there are still many small new
machines. Even very small machines are common in the emerging markets
New Capacity by PM Size: 2016-2018

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TECHNOLOGY CONCEPTS 2016-2018
Technology choices are more varied in the mature markets, while in the emerging
markets conventional technologies are predominant

Mature markets – NA, Europe Emerging markets – Asia, LA

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CONCEPTS BY PRODUCER IN MATURE MARKETS 2016-2018
Investments in TAD continue in the US (First Quality). New textured tissue is
entering the markets (Resolute, Orchids, von Drehle, Sofidel and Renova)

*QRT

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CURRENT TECHNOLOGY IN MATURE MARKETS
North America has a broader range of technologies installed, and more structured
tissue capacity

Top North American Producers Top European Producers

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ENERGY CONCEPTS
New innovations often lower the energy consumption and depending on prevailing
price relations co-generation may reduce the energy costs significantly
Modern technology offers energy efficiency Energy prices

 Many modern technical solutions offer lower

energy consumption in tissue production.
– These are often related to higher dryness
after press, Yankee conductivity, lower
water consumption etc.
 A co-generation system can also provide
substantial savings, especially in countries of
high electricity and reasonable natural gas
prices.
– There are various systems available with
differing levels of efficiency; a system
where the exhaust gases from the turbine
are used in the hood represents the high
end technology.
– Examples of European countries where
the co-generation systems have been
installed include Italy, Spain and the UK.

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NEW TISSUE CAPACITY WITH SIGNIFICANT COMPETITIVE EDGE

 Continuing market growth allows for new projects to emerge, but the capacity additions
tend to focus on certain regions tightening the local competition
 Many new investments have a competitive edge based on economies of scale,
premium technology and/or an advanced energy concept
 Integration of tissue production with hardwood pulp is increasing, especially among
new entrants that base the entry on low manufacturing costs
– Integration with chemical pulp is currently rather rare, limiting mainly to APP in Asia and Georgia
Pacific in North America
– Quite a lot of the new capacity is integrated to pulp. Most of the producers that integrate are new
entrants to tissue market; e.g. less competitive market pulp mills, large pulp & paper sites
diversifying to tissue or bamboo pulp mills in China

 Competitive edge based on technology advantage or pulp integration can be significant

 Cost optimization is a continuous process – digitalization can be the next major step

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VIRGIN PULP INTEGRATION IN TISSUE
Physical integration of chemical pulp and tissue is currently relatively rare, globally
only some 11 % of tissue capacity is integrated with a chemical pulp mill

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PULP INTEGRATION OF NEW CAPACITY 2016-2018 (1/2)
Market pulp is key, but pulp integration is becoming more common in mature
markets. Market pulp mills (St.Croix, Altri, Navigator Cacia) and larger sites
(Resolute, Calhoun) are diversifying into tissue

*Paper Prime will be sourcing slush pulp from the Altri mill in Celtejo, Portugal

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PULP INTEGRATION OF NEW CAPACITY 2016-2018 (2/2)
Most of the new capacity in Asia is pulp integrated. APP is planning a massive
tissue capacity increase in its pulp mills in Indonesia. Bamboo based integration is
emerging especially in China with the brown tissue boom. Suzano is the first LA
market pulp producer physically integrating with tissue

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NEW TISSUE CAPACITY WITH SIGNIFICANT COMPETITIVE EDGE
 Continuing market growth allows for new projects to emerge, but the capacity additions
tend to focus on certain regions tightening the local competition
 Many new investments have a competitive edge based on economies of scale,
premium technology and/or an advanced energy concept
 Integration of tissue production with hardwood pulp is increasing, especially among
new entrants that base the entry on low manufacturing costs
 Competitive edge based on technology advantage or pulp integration can be significant
– Fiber integration gives a significant cost advantage, considering the savings in e.g. pulp logistics
and drying. If the pulp can be valued based on its manufacturing costs, the advantage is higher
– Cost advantage from own power generation requires suitable energy price relations, which can
also change over time and reduce the advantage
– Big scale is a cost advantage, especially in large uniform markets
– The cost benefits of premium technologies are forthcoming in the converted products

 Cost optimization is a continuous process – digitalization can be the next major step

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IMPLICATIONS OF TECHNICAL CONCEPT TO OPERATING COSTS
Fiber integration, scale and energy co-generation in right conditions give a clear
cost advantage in jumbo reels. Premium technologies have higher cost per ton

JR manufacturing costs

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IMPLICATIONS OF TECHNICAL CONCEPT TO OPERATING COSTS
The cost benefits of premium technologies are forthcoming in the converted
products

Toilet paper manufacturing costs with a modern converting line

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NEW TISSUE CAPACITY WITH SIGNIFICANT COMPETITIVE EDGE

 Continuing market growth allows for new projects to emerge, but the capacity additions
tend to focus on certain regions tightening the local competition
 Many new investments have a competitive edge based on economies of scale,
premium technology and/or an advanced energy concept
 Integration of tissue production with hardwood pulp is increasing, especially among
new entrants that base the entry on low manufacturing costs
 Competitive edge based on technology advantage or pulp integration can be significant
 Cost optimization is a continuous process – digitalization can be the next major step
– Digitalization, along with new technical innovations, can be the next step to improve the
production and supply chain efficiencies

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DIGITALIZATION
Digitalization can be the next game changer – improved production and supply
chain efficiency, sales and margin optimization…

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NEW TISSUE CAPACITY WITH SIGNIFICANT COMPETITIVE EDGE
 Continuing market growth allows for new projects to emerge, but the capacity additions
tend to focus on certain regions tightening the local competition
 Many new investments have a competitive edge based on economies of scale,
premium technology and/or an advanced energy concept
– Will the new structured tissue technologies be a game changer? The new technologies
can set a new quality standard especially in the markets where TAD has not succeeded
and in new segments such as private label and even AfH

 Integration of tissue production with hardwood pulp is increasing, especially among

new entrants that base the entry on low manufacturing costs
– Despite the increasing fiber integration, market pulp will remain as the main concept.
Integration creates some new players, such as Suzano and The Navigator, but overseas
transports from Brazil or Asia to Europe or NA are likely to remain marginal

 Competitive edge based on technology advantage or pulp integration can be significant

 Cost optimization is a continuous process – digitalization can be the next major step

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CRESCITA COSTANTE
DEL MERCATO DEL TISSUE
CONTENIMENTO E RIDUZIONE
DEI COSTI ENERGETICI ELEVATA CONCORRENZA
CRESCENTE NUMERO DI INVESTIMENTI

ALTA QUALITÀ
CONTENIMENTO DELL’UTILIZZO DI FIBRE PRESSIONE SUI COSTI
PRODUZIONE EFFICIENTE
RISPARMIO ENERGETICO
INNOVAZIONI
INNOVAZIONI TECNOLOGICHE CON LO SCOPO DI UNA
NOTEVOLE RIDUZIONE DEI CONSUMI DI ENERGIA E FIBRE
PRODUZIONE ECO SOSTENIBILE
RIDUZIONE DEL
TIME TO MARKET
Flessibilità
Qualità dei prodotti ed efficienza nell’uso delle risorse
Industria 4.0 utilizzo di macchinari e sistemi intelligenti fortemente
interconnessi tra loro
Big data..enormi volumi di dati in diversi settori
Dare un senso a tutta questa informazione trasformandola in conoscenza
applicata a beneficio degli utenti
Tecnologia 4.0 ha come finalità principale l’ottimizzazione
della produzione in ottica di efficacia ed efficienza
Innovazione competitività
Affidabilità
Cambiamenti in velocità, essere flessibili è fondamentale
L’industria 4.0 non si realizza al di là delle persone ma oggi più che mai
grazie e con loro
UN NUOVO MONDO
SOSTENIBILE
FARE DI PIÙ CON MENO
IMMETTERE IN ATMOSFERA
MENO CO2

QUESTO È UN MUST PER IL FUTURO

UN MERCATO GLOBALE
PIÙ FRENETICO E CONCENTRATO
COGLIERE LE LORO NECESSITÀ

RIUSCIRE AD AGIRE IN TEMPO REALE

ORGANIZZAZIONE ARMONICA
ED EFFICIENTE

TECNOLOGIE OMNICHANNEL
ACCORDI IMPORTANTI
PER LA DISTRIBUZIONE

MIGLIORARE LE LORO PERFORMANCE

CONTINUARE A INNOVARE A 360
GRADI SU TUTTA LA SUPPLY CHAIN

RISPETTANDO UN TIME TO MARKET EFFICACE