Workshop Fibria-ABTCP 30 th April. 2013 Daniela dos Reis Innovation Center R&D Engineer id21377109 pdfMachine by Broadgun Software - a great PDF writer! - a great PDF creator! - http://www.pdfmachine.com http://www.broadgun.com 2 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 3 Economic Development Urbanization Living and Hygiene Standards Population Growth Substitution? Drivers of Tissue Consumption How are the medium-term and long-term perspectives? 4 Total Tissue consumption 2011: 30.4 mio. tonnes Tissue Consumption Per Region 5 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 6 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 7 0 5 10 15 20 25 Amrica do Norte Europa Ocidental Japo Oceania Amrica Latina China Europa Oriental Oriente Mdio 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 8 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 17 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 9 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% 10 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 11 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) 0 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% 12 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% 13 Tissue Paper by Region Characteristics and Trends 14 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 15 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 16 !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 17 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 18 ! 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 19 ! 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 20 !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 21 Tissue quality = Eucalyptus fibers 22 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 23 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 < 24 Tissue manufacturing introduction | Dalcio 25 Coarseness is the most important parameter for tissue Represents a mass unit over certain length of fiber (g/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! 26 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 27 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 28 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. 10 12 14 16 18 20 22 24 26 28 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 29 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 30 Contact: Daniela dos Reis R. Del Monaco R&D Engineer - COC Tissue Fone +55 11 3944-4078 daniela.reis@voith.com