 |
| U.S. (000 tons) |
2001e |
2000p |
1999p |
| Production1 |
7,128 |
6,975 |
6,847 |
| % change |
2.2 |
1.9 |
4.0 |
| Capacity |
7,623 |
7,377 |
7,121 |
| % change |
3.3 |
3.6 |
3.5 |
| Utilization rate, % |
93.5 |
94.5 |
96.1 |
| Imports |
220 |
200 |
234 |
| Exports |
110 |
104 |
103 |
| Price index* |
- |
114.4 |
114.2 |
| Canada |
|
|
|
| Production1 |
- |
714 |
729 |
| % change |
- |
-2.1 |
5.9 |
| Capacity |
778 |
776 |
758 |
| % change |
0.3 |
2.4 |
-2.3 |
| Utilization rate, % |
- |
92 |
96.1 |
*Based on Bureau of Labor Statistics' Producer Price Index.
1982 = 100.
e = estimate,
p = preliminary,
r = revised.
1. Shipments.
Sources: American Forest & Paper Assn., Pulp and Paper Products Council, Pulp & Paper Forecaster. |
| Company |
Annual capacity (000 tons) |
Market share (%) |
| Georgia-Pacific1 |
2,956 |
39.6% |
| Kimberly-Clark |
1,437 |
19.2% |
| Procter & Gamble |
1,190 |
15.9% |
| Kruger |
276 |
3.7% |
| Cascades2 |
260 |
3.5% |
| Plainwell Paper |
260 |
3.5% |
| American Tissue |
250 |
3.3% |
| Potlatch |
165 |
2.2% |
| J.D. Irving |
125 |
1.7% |
| Wausau-Mosinee |
105 |
1.4% |
| Total |
7,469 |
|
North American capacity(2000): 8,089; U.S.: 7,313; Canada:776; Market share of top 5 companies: 80.2%; Market share of top 10 companies: 91.4%
1. G-P includes acquisitions of Fort James and Chesapeake/Wis. Tissue, and reflects company's stated plan to divest 368,000 tons of capacity in 2001 as part of Fort James merger.
2. Includes 100% of Perkins Papers.
Sources: Company reports, AF&PA, Pulp and Paper Products Council. |
|
MARKET STRUCTURE. Tissue paper is used in sanitary products such as bath tissue, paper towels, facial tissue, and napkins, and is sold to consumer and commercial/industrial (C&I) customers. Also called the "at home" market, consumer tissue accounts for about two-thirds of the U.S. tissue trade and is purchased at retail outlets such as supermarkets and drug stores. C&I tissue products, also called the "away from home" market, represent most of the remaining shipments, and are sold at wholesale to janitorial supply companies, hotels, offices, restaurants, factories, airports, schools, and government offices. A small quantity of tissue is used in absorbent products such as diapers, wipes, and feminine hygiene. It is also used for wadding and as base stock for waxing, wrapping, and miscellaneous uses.
Tissue is sold primarily as converted finished goods in cases rather than in roll or sheet form, although there is an active market in tissue jumbo rolls. Typical basis weights range from 12-14-lb/3,000 ft2 for single-ply bath tissue, and 29- 32-lb/3,000 ft2 for single-ply towel.
PRODUCERS. With among the highest profit margins and most stable growth rates in the paper industry, the $8 billion U.S. tissue business is intensely competitive and has continued to undergo significant consolidation in the past five years.
Late last year, Georgia-Pacific Corp. moved to the top rank of tissue producers with the $7.3 billion acquisition of Fort James Corp., which had been formed in 1997 with a $5.8 billion merger of C&I market leader Fort Howard Corp. and consumer company James River Corp.
The tissue sector remained relatively unscathed by the 1998-99 paper industry downturn, but also did not see much of the price upswing of 1999-2000. The consolidation of major players resulted in the closure of a number of old mills, but new machines and capacity additions have been the highest for any paper sector.
PRODUCTION. Despite an acceleration in capacity in the late 1990s, tissue production has almost kept pace and is forecast to increase around 2.0% in 2000 and 2001 following a 4.0% increase in 1999. This will maintain operating rates at just under 95% after they peaked at about 96% in 1998 and 1999. U.S. production of 6.85 million tons in 1999 was up 4.0% from a year earlier, according to revised data from the American Forest & Paper Assn. In Canada, tissue and specialty paper production was 729,000 tons in 1999, up 5.9% from the year before.
U.S. tissue output in 2000 was running about 1.2% higher based on annualized data through September, according to AF&PA. Canadian production through Sept. 2000 was down 2.0%, according to the Pulp and Paper Products Council.
CAPACITY. Four new tissue machines (two of which replace old machines) were added during 1999 in the U.S. and four more came on line during 2000. The new projects, along with incremental growth on existing machines and subtractions for discontinued machines, resulted in tissue paper capacity increases of 3.5% in 1999 and 3.6% in 2000. The AF&PA survey anticipates four new machines starting up during the projection period—three in 2001 and one in 2002. Tissue paper capacity growth is projected at 3.3% in 2001, 2.7% in 2002, followed by no change in 2003.
"Tissue is an area of particular concern," said one analyst. "New machines by Kimberly-Clark and Georgia-Pacific are largely responsible and suggest the potential for falling operating rates and pressure on pricing."
Installation of new tissue paper machines in North America is expected to slow during 1999-2002 but growth overall remains strong, according to a comprehensive review of global tissue projects by Pulp & Paper Project Report. Twelve new tissue PMs are slated for startup in North America during the four-year survey period. This is a 25% decline from the 16 new PMs tallied for the 1998-2001 period last year. However, there is only a 12% decline in capacity of scheduled new PMs, equivalent to approximately 101,000 tons.
By James McLaren Executive Editor, Pulp & Paper Week
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