Tissue 2018 Scores in Appleton

More than 300 delegates attended the second annual Tissue event, co-organized by TAPPI and RISI, held Oct. 3-5 in Appleton, WI, heart of the tissue industry.

Conference organizers scored a coup in having Katja Lerner, vice president, research and engineering, Kimberly-Clark, as the opening plenary speaker. She addressed an important issue facing the sector: The world of tissue in a changing environment.

Other conference sessions looked at issues such as safety, automation, project performance, tissue flushability and operating efficiency. The 2018 featured several supplier site visits as well. These included CR Meyer, Pulsar and Fabio Perini.

From the RISI end, economist Patrick Cavanagh discussed the global fiber outlook for tissue while renowned analyst Esko Uutela looked at future tissue consumption. In the same session, Nicholas Mockett, Moorgate Capital, spoke about international expansion and corporate development.

What are the tissue industry issues keeping executives up at night (or should be). This was the thought provoking topic of the final plenary session. Matt Elhardt, vice president, business development, Fisher International, said there are three ways to address the issues: as a risk, an opportunity or status quo (do nothing).

Elhardt looked at four issues in particular: pulp prices, e-commerce, technology, and, the environment.

With no new capacity coming online in the near-term, most agree that pulp prices are not dropping any time soon. And, Elhardt added, fiber is the important cost component for tissue makers, up to 67 percent for some. For some mills, manufacturing costs are going up by double digits, year over year. Therefore, pulp prices are pushing non-integrated mills to the high end of the cost curve. Also, conventional tissue machines are becoming less competitive.

E-commerce is growing rapidly. Consumer packaging goods such as paper and tissue have not been a big part of e-commerce so the opportunity is there. Tissue is important to e-retailers. Why/ It is a non-perishable; it is a repeat business; and, everyone buys it. E-commerce will also drive the growth of private labels, Elhardt added.

Looking at the environment, Elhardt said carbon regulations are on the way. Water is also a big issue for many mills and could be the cause of closures. In conclusion, he said companies need an understanding of the four issues to make the strategic decisions needed.

Finally, fresh after his induction into the Paper Industry Hall of Fame the night before, and two days after the official opening of Sofidel’s new Circleville, Ohio, tissue mill, company CEO Luigi Lazzareschi honored delegates with a presentation.

Discussing Sofidel’s move to the US, Lazzareschi said the company is trying to replicate what worked in Europe. Growth will be through Greenfield projects and acquisitions. Sofidel tries to be close to its customers, but because logistics costs are lower than in Europe facilities can be further away, up to 400 miles.

Why come to the US? Lazzareschi cited several reasons, including personal, as he received part of his education in the US and always wanted to come back. Market growth is better in the US. Quality of assets is another. "We believe we can bring some changes in quality here. There have been no big investments in the US tissue industry in the last 20 to 30 years," he added.

The growth of the private label sector is also a key factor for Sofidel’s decision. "This is a big space for us. There is room for a medium-size company such as Sofidel," Lazzareschi said. He added that in the US, private labels only account for about 28 percent of the market compared to more than 70 percent in some sectors in Europe.

 

For 2019, the event has been rebranded as TissueCon and will be held October 1-4 in Orlando, FL.

Tissue 2018 attendees were able to join several offsite tours, including a Tissue Testing Workshop at SGS-IPS Testing, the largest independent lab catering exclusively to the paper and nonwovens industries. Here, members of the tour group view several prepared slides of tissue samples for fiber analysis.