Esko’s Take on Tissue

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Tissue360° recently had the opportunity recently to converse with FastmarketsRISI’s tissue guru, Esko Uutela. Esko will be one of the speakers at the upcoming TissueCon 2019 in Orlando, Oct. 1-4. This is a sneak preview of what delegates can expect to hear from the industry’s most notable analyst,

Asked how tissue markets are looking, particularly in North America, as we go into the late part of 2019, Esko said, in the second half of 2019, the industry can expect demand growth to continue but probably some weakening will be seen toward the end of the year as there are increasingly clouds on the economic skyline originating from seasonal developments and uncertainty with the geopolitical situation and trade wars.

What are the issues to watch concerning the tissue sector?

“In the tissue sector, new technology has been a challenge to companies to sell new product categories to retailers and convince them to accept new quality labels.”

Uutela added that older tissue machines and mills with conventional technology are partly at risk and closures have taken place and this restructuring is expected to continue. Cascades' acquisition of Orchids will likely result in some changes in their supply chain, for example. “Big players are getting increasingly critical in evaluating the performance of their mills and tissue machines. Closures are possible when new capacity starts up. “P&G may be an exception as capacity is always kept in top condition with smaller rebuilds which are not publicly discussed (and, for example, PMP as the supplier).

Internationally, what trade issues do people need to keep their eyes on?

“In foreign trade, imports tariffs for Chinese tissue are the main issue but one tissue category, 48.18.90 other tissue is excluded and imports under that code have grown strongly.  But US total imports have not been much affected, only the growth in imports has stopped as more tissue is coming from other countries. Tariffs are hitting China but not other countries. Canada has meanwhile removed the 10 percent import duty for US goods and there was no effect even in the months when the tariff was valid.”

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