Tissue360 - Fall/Winter 2014 - (Page 16)
on the rise
Private label growth, pulp integration, energy, converting
expansion among key drivers
This exclusive Tissue360° magazine report by Pöyry reviews investment
activity highlights and discusses various
projects that have been publicized in different parts of the tissue supply and value chain,
covering pulp, tissue making, converting,
distribution, and marketing.
Specifically, this report reviews tissue
paper manufacturing, converting, distribution centers, marketing and promotion, M&A activities and implications/key
TISSUE PAPER MANUFACTURING
The drivers for investments can be grouped
into different categories, including geographic expansion, capacity replacements,
market growth, and backward integration,
Table 1. North American tissue paper machines.
to mention a few. For example, regional
expansion has played a role for Cascades
as the company solidifies its position in the
North American West Coast by converting
an uncoated freesheet machine to produce
tissue paper. Orchids is closing two small
tissue paper machines at its mill in Pryor,
Okla., and starting a new larger scale one
based on conventional technology.
Private label growth, and especially the
demand for high end products that combine
increased softness and performance, continues to justify investments for premium
tissue producers, especially in the U.S. South
(e.g., First Quality). Backward integration to
pulp-virgin or recovered-is a key element
for low cost manufacturing, and especially
prevalent in the away-from-home (AfH)
segment. Along those lines, we are seeing
investments in former market deinked pulp
mills (like VonDrehle).
For 2015 and onward, more capital will
go to projects that are built around leveraging integrated pulp (St.Croix in Bailyeville,
Maine) or expanding within existing sites
that have adequate room for installing new
tissue machines (First Quality, P&G).
Where are the investments taking place?
For the time being, the U.S. South and East
are regions with growing tissue output and,
to a lesser extent, the Midwest and West (see
Figure 1). The U.S. South continues to be a
hub serving the regions to the west and north
that are short on "local" tissue. It is important to highlight that the upcoming tissue
capacity will further strengthen the position
of the South region as the largest and newest
asset base region in North America.
Also worth noting is that the listed tissue machine capacity additions are mainly
for the At-Home (AH) segment and, when
comparing the technology choices between
2013 and 2014, contrary to last year, the
TAD investments are now second to conventional PMs.
As part of continued efforts to reduce
costs at the mill level, tissue producers are
also allocating capital into energy projects.
A bold move in this direction was P&G's
$50 million investment in a co-generation
project at its Mehoopany site in Pennsylvania.
This investment not only made the site energy
self-sufficient, but it also generated enough
excess electricity to power approximately
20,000 homes for sale back into the local grid.
In addition, Lincoln Paper and Tissue is retrofitting its pulping handling and refining process with more modern and energy efficient
equipment (total project cost of $8 million).
Table of Contents for the Digital Edition of Tissue360 - Fall/Winter 2014
Tissue Industry News
Wausau Paper’s ATMOS at Harrodsburg: Right Machine for Right Company at the Right Time
North American Tissue Investments on the Rise
Healthy European Tissue and Towel Market Driven by Growth in Per Capita Consumption
Maximizing Yankee Dryer Safety, Reliability, Efficiency Key Goals for Today’s Tissue Mills
Tissue360 - Fall/Winter 2014