China looks to Middle East and APAC for its tissue oversupply remedy

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By: Shradha Priyadarshini -- Research Analyst, Paper Packaging

01 January, 2017

ARTICLE

Abstract:

Globally, the tissue market has been moving steadily, mostly unaffected by the economic slowdown in various regions. Western Europe registered a growth in demandof about 2.3percentin 2015 while North America witnessed 2.2percentgrowth in consumption during the same period. While the market has been able to maintain stability in the supply-demand scenario forboth these regions, the exorbitant capacity addition planned in APAC is expected to cause some variations in the trade flow of tissue. Also, with the private label market share reaching as high as 60percentin Western Europe and about 25percentin North America, the branded label suppliers may have to think of more innovations and product enhancements to protect their market share.

North Americaand EU tissue market: How much can it absorb?

North American Tissue Market Overview:

Even though North America is the largest consumer of tissue globally, the region has been witnessing steadygrowth rates in the recent past. While the growth was1.4percentin 2013 and 1.3percentin 2014, it jumped to2.2percentin 2015. The away-from-home segmentwitnessed a growth of about 3.5 –4.0percentduring the same period.

The improving lifestyle in North America is certainly impacting the tissue market as much as it is affecting the developing regions. Hotel occupancy rate increased from 64.4percentin 2014 to 65.6percentin 2015and also, the HoReCa (Hotels, restaurants and Cafes)sector is witnessing a steady growth in the range of 2.5 –3.5percent, leading to the rise in consumption of away-from-home tissue products.

The North Americanmarket is operating in the range of 92 –96percentand is expected to continue the same trend going forward. Except First Quality Tissue which held 3percentof the market share in 2015, mostof the toptensuppliers donothaveexpansion plans till 2017. A major part of the expansion is carried by other suppliers who are trying to expand inthe market to improve their share. If the expansionplans materialize, it will increase First QualityTissue’s market share to 4percent, bringing it at par with Clearwater Paper and Kruger Paper.




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