Tissue down under: Carter Holt Harvey Tissue

Carter Holt Harvey Tissue is the main tissue producer of Oceania. Market leader in Australia and New Zealand, CHHT belongs to the Carter Holt Harvey Group ,principal integrated pulp & Paper producer of the region, 50.1 % owned by international paper, the n. 1 world producer of cellulose and paper.

Cristina Bernardini

In terms of distance, nothing is farther away from Europe than Oceania, but in terms of global markets, the distances are immediately reduced. Let's take the example of a company that operates between Australia and New Zealand. The above company belongs to one of the most important integrated pulp & paper producers of the southern hemisphere. The above producer belongs for 50.1% to a large American multinational group, the n°1 worldwide for forest products and products derived from wood pulp, with facilities spread out over 50 countries. The scenario thus changes and expands to eliminate territorial boundaries. This is the case of Carter Holt Harvey Tissue, main tissue producer of Oceania.

CHHT IS OWNED BY THE CARTER HOLT HARVEY GROUP, A GIANT IN THE FIELD OF FOREST PRODUCTS THAT OPERATES BETWEEN NEW ZEALAND, AUSTRALIA, FIJI AND CHILE. With 11,300 workers and an annual turnover of around 3.2 billion New Zealand dollars (something like 7.34 billion US dollars), today Carter Holt Harvey is the n° 2 company among those quoted in the New Zealand stock exchange and n°32 overall in Australia. Main integrated producer of wood derived products in the southern hemisphere, CHH has a range of activities that spans from cellulose pulp to paper finishing to the packaging of building materials, passing through various distribution companies. Since the beginning of the 1990s, the major shareholder of Carter Holt Harvey is the American multinational group International Paper, the main pulp & paper and forest products company in the world. IP can boast a turnover of over 28 billion US dollars and employs over 113,000 people worldwide. Neither IP nor CHH have their core business in tissue, which represents a rather limited portion of their turnover.

However, in the case of Carter Holt Harvey, the field of tissue products for domestic and industrial use has taken on great importance, following the evolution of a dynamic industrial sector that in the last 15 years has shown great vitality. The history of Carter Holt Harvey Tissue is a relatively recent one, dating back to two companies that have made the history of the industrial field: Caxton of New Zealand and Bowater of Australia.

IT WAS IN FACT IN I988 THAT CARTER HOLT HARVEY DECIDED TO ACQUIRE THE PRESTIGIOUS CAXTON GROUP, at the time one of the few completely integrated tissue producers in the world and renowned name in the paper industry. Founded in 1895 in Auckland, Caxton Printing Works began to produce toilet tissue rolls in 1922, but flourished above all in the second half of the 1950s, following the post-war industrial boom. At the end of the 1980s, besides a substantial forest inheritance, Caxton brought to the purchaser also the first and only tissue mill of the country, one of the most advanced pulp mills, three converting facilities and a wide range of products commercialized under established brand names, absolute market leaders. Strong of the results obtained in tissue in New Zealand, Carter Holt Harvey decided to further invest in this field and in 1995 set out to conquer Australia with the purchase of Bowater Tissue Ltd. In this case, too, besides material goods and production facilities, the investment allowed access to a large pool of know-how and years of experience in this field. And the history of Bowater begins in the 1930s, when the British Australian Paper Company Ltd. was founded in the state of Victoria for the import of hygiene products from the United States. In 1956 it was bought by the British The Bowater Corporation Ltd. which, three years later, sold 50% of it to Scott Paper. Thus, the Bowater-Scott joint-venture was born and so was the start of a series of substantial investments. In 1959/60 a new facility was built at Box Hill, near Melbourne, and in 1961 a first PM was installed there, followed by PM2 in 1964 and PM3 in 1970. In 1978 Bowater-Scott formed a joint-venture with the Swedish Mölnlycke AB group for the creation of Sancella Pty. Ltd., a company dedicated to feminine and personal hygiene products. In 1984 Deeko was purchased, Australian leader in the field of table-top products. A few years later, Scott Paper sold its 50% stake and the group returned under the complete control of Bowater until the acquisition by Carter Holt Harvey.

TODAY, CARTER HOLT HARVEY TISSUE UNITES THESE TWO IMPORTANT TRADITIONS AND IS THE LARGEST PRODUCER IN THE REGION. Its production activities are spread out between New Zealand, Australia and Fiji for a total of over 1100 employees. In New Zealand, the main facility is located in Kawerau, in the Bay of Plenty, in the northeast region of the country, heart of the forest and paper district of New Zealand. About 250 people work at the Kawerau paper mill, ex-Caxton.

Three 3-meter wide paper machines are located here, as well as a CTMP pulp producing facility and a converting sector for handkerchiefs and toilet rolls and hygiene products for the away-from-home sector. Toilet tissue, kitchen towels and facial tissue for the consumer segment of the market are converted at the Te Rapa mill, in the region of Hamilton. The Swanson Road plant, near Auckland, is instead dedicated to the production of baby diapers. Apart from the Fiji converting plant, where toilet rolls and kitchen towels for the local market are converted, the rest of the converting production is located in Australia, where Deeko and the Box Hill paper mill are located.

THE PERINI JOURNAL HAS GONE TO BOX HILL AND VISITED CARTER HOLT HARVEY TISSUE'S BIGGEST FACILITY AND ADMINISTRATIVE CENTER OF THE GROUP'S TISSUE ACTIVITIES. Box Hill is not very far from Melbourne, in the state of Victoria, the Australian district located on the southern most point looking towards Tasmania. In this facility that was the starting point of the Bowater structure, work about 450 people. From here, all CHHT's production and converting facilities are managed and administered. General Manager of all production facilities is Howard Meadows, English by birth and then New Zealander first and Australian today by adoption. Mr. Meadows was born in England where, after his studies in engineering, he began his career at Beloit. In 1973 he left Europe for New Zealand and joined the Caxton team where the third tissue PM was started up at the Kawerau plant. With him, direct witness to the acquisition and integration processes, we have retraced the steps of the birth of Carter Holt Harvey Tissue. Today, Howard travels between Australia and New Zealand, but is based at Box Hill.

IN THIS COMPLEX, PRESENTLY 3 TISSUE PMS ARE LOCATED: PM 2 (PM1 of 1961 was closed down), a Beloit 3.4-m wide machine, is a Crescent Former started up in 1964. PM3, another Beloit Crescent Former of the same size, was started up between 1989 and 1990. The latter machine is one of the first PMs for the production of through-air-dried tissue installed outside ofthe USA. Howard Meadows told us the genesis and realization of the TAD project in Australia: "This project was an initiative of Scott Paper. In the 1980s Scott Paper decided to export the through-hair-drying tissue formula, consolidated in the United States, also to some European plants - Italy, France, Spain - and in Australia where it was participating in a joint venture with Bowater-Scott.

When in 1986 Scott pulled out of the joint venture, Bowater Tissue Ltd. brought the project ahead autonomously and started up the machine between 1989 and 1990, at the same time as Scott's TAD PMs in the Orlèans, Salamanca and Alanno plants. The then-CEO of Bowater, Larry Wilson, had strong technical know-how and thanks to his strong efforts, the machine was successfully started up". At the Box Hill plant, toilet rolls, kitchen towels and facial tissue destined for the consumer segment of the market are produced. Our guide inside the important tissue converting compartment was Mr. Gary Wood, Senior Engineer of technical development.

Gary started his career at Bowater and has been in paper technology for over 15 years. With him, we visited the lines that convert the products destined to reach Australian and New Zealand consumers. The last in chronological order is a 3.4-m wide Perini Sincro 9.0 line, converting through-air-dried tissue reels produced by PM4 into toilet rolls. The machine, installed in the spring of 2000, mounts a double trolley unwind backstand, a 4-color printer and a double rubber-to-steel embosser. Another line for toilet rolls of the same width is also present at the mill, a Perini Mod. Alfa that has been in operation since 1990 and was bought during Bowater's TAD project. The other tissue roll converting lines have a smaller width and work both TAD and traditional tissue, together with a Chadwick 4-color offset printer.

CARTER HOLT HARVEY TISSUE PRODUCES ALMOST EXCLUSIVELY BRANDED PRODUCTS AND DEDICATES AMPLE RESOURCES TO THE PROMOTION OF ITS NUMEROUS BRANDS. First among the group's brands is Sorbent (see box), premium quality TAD toilet rolls and facial tissue. With a 25% market share, this brand is the absolute n°1 on the Australian market, followed by Kleenex toilet rolls, premium quality product by Kimberly-Clark Corp., which boasts a market share of around 20%. In the towel segment, the premium quality through-air-dried product is the Handee Ultra kitchen towel (n° 1 on the Australian market), a 2-ply, 4-color printed product. In the quality, or medium segment of the market, the corresponding product is the Handee kitchen towel, a 2-ply, 4-color printed product made in traditional creped tissue. To the medium segment of the market is also directed the Purex brand, historical Caxton brand name for toilet rolls and facial tissue. The Purex traditional 2-ply toilet tissue is the n° 1 brand on the New Zealand market and n° 3 in Australia. In the table napkins and table-top products field, the Deeko brand successfully covers all market segments. To the Away-from-Home segment is dedicated the entire range of Hygienics brand products.

"Australia and New Zealand are markets oriented towards branded products", explains Howard Meadows - "CHHT possesses very strong transnational brands such as Sorbent for the premium quality segment or Purex for the intermediate segment. It dedicates large resources and energies to sustain and promote its products. Advertising through media, in particular television, and special promotions are the most commonly used and effective instruments". To our question regarding the group's commercial strategy, Howard informed us: "Besides investments for the promotion of branded products, we aim at developing the entire region's tissue market rather than simply trying to take some share points away from one of our competitors. If we look at the per capita consumption in this area, we can see that it is around 11 kg per year, when in nations such as Sweden, not to mention the USA, this figure is around 20 kg. So, if an increase of, say, 4 kg per year were to take place in a population that between Australia and New Zealand exceeds 23 million people, it is clear that this would entail a very consistent growth in the entire sector. I repeat: the best medium-to-long-term philosophy is the one that leads to the development of the entire level of demand and the consumption of tissue in general. Regarding short-term prospects, in Australia, too, we look to the away-from-home segment as the one where a faster growth can he registered". Developing demand, therefore, through the offer of a wide range of products, having quality as the clear aim. "The Australian and New Zealand consumer is willing to spend more for a superior quality product, as is evident from the success of premium-quality products. For this reason, it is necessary to be consistently innovative and attentive to constantly improving the quality level of the offer."

CHHT BELONGS TO A LARGE PAPER MULTINATIONAL, BUT FOR WHAT CONCERNS TISSUE, IT CAN BE COUNTED AS BEING PART OF THE REALM OF INDEPENDENT PRODUCERS, and typical of independent producers are its mentality, entrepreneurial spirit and reaction times. Speed and reaction times are fundamental characteristics for any company who finds itself up against colossus of the Kimberly-Clark or Georgia Pacific type which, for size and structure, tend to have longer reaction times. Another factor that at CHHT is considered fundamental is the possibility of exchanging experiences and information with producers in other countries, above all in North America and Europe. In the old continent, the relationship with the SCA group is very important, with whom Carter Holt Harvey Tissue is in joint-venture agreement for the ownership of Sancella, leader of feminine and personal hygiene products, whose brand of feminine pads Lybra has for years been the n°1 in Australia. From Sancella comes Keith Forbes, present CEO of the Carter Holt Harvey Tissue group.

Born in New Zealand, Mr. Forbes moved to Australia 22 years ago and in 1984 started to work for Bowater-Scott, then owner, together with Mölnlycke, of Sancella. After spending some time in Latin America as General Manager of the Sancella facilities in Mexico and Central America, Keith Forbes returned to Australia as General Manager of Sancella Australasia, to be recently nominated CEO of CHHT. With a sales increase in the consumer tissue field that since 1999 has been of over 7.5%, Keith Forbes can rightfully look to the future with optimism. "Carter Holt Harvey Tissue is a dynamic reality founded on solid bases".

WE MUST EMPHASIZE THAT THE SUCCESS OF THE TISSUE SECTOR, AND OF THE ENTIRE CARTER HOLT HARVEY GROUP, IS THANKS TO THE PEOPLE WHO WORK HERE. Individual capabilities and the entrepreneurial spirit of each single worker are constantly acknowledged and stimulated. For a few years now, CHH has been promoting and carrying on a project called I-2-B, acronym for Ideas-to-Business, addressed at every employee of every company belonging to the Carter Holt Harvey group. It is a type of contest: everyone can present his or her own business plan or a research and development plan in any realm activity. It can be a new idea in marketing and advertising, a technological novelty or a new product to be made - there are no limitations. A special commission then chooses the best project or projects, and these are then financed and carried out. This initiative has met with great success and the number of projects presented increases every year. In this way, it is possible not only to pool new ideas and projects that enrich the company's heritage, but also the entrepreneurial capability of each individual is stimulated and enhanced". Mr. Forbes then spoke to us about safety, an aspect in which the Carter Holt Harvey group invests many resources. "It is simply unthinkable that a person be put in the condition of doubting about his or her own safety and physical integrity on the job when he or she enters the company. People must be put in the best possible conditions so that they can work serenely and with satisfaction". The results of this mentality are clear: in 2000 the frequency of accidents on the job decreased by 62% and in some fields, among which tissue, it has been brought down to two accidents every 200,000 hours of work.


Few are the products that can boast of commercial success and consumer loyalty for 50 consecutive years. But Sorbent toilet tissue, produced by Carter Holt Harvey Tissue, is certainly one of these. Launched in 1952 in Australia, this brand has gone hand-in-hand with the social and economic development of this country, conquering the loyalty of three generations of consumers. Is there a universal recipe for obtaining successful brands?

Probably not, but Sorbent's history is surely an interesting one and offers an amusing image of the evolution of modern society told through the development of one of the most successful advertising campaigns in this industrial field. The pleasant television advert that was first aired on Australian TV in 1956 officially marked Sorbent's first apparition. The ear-catching jingle that accompanied the TV commercial conquered the Australian public and became a veritable national anthem, even almost more famous than "Waltzing Matilda", as Phillip Adams, famous journalist of that time, noted. Furthermore, the development of supermarkets, favored in those years by the prospects of the post-war economic boom, facilitated the diffusion of Sorbent, thus increasing its popularity among Australians. The flourishing 1960s firmly established the success of the popular roll that, by presenting itself on the market in double packs of high quality colored paper at the right price, conquered consumers. Even if we cannot speak of an actual recipe, we can state that quality and the right price are indispensable ingredients for a product's success. And if these are joined with an effective advertising campaign, then the result is surely a winner. And it is this attractive mix that allowed Sorbent to gain a 50% market share in 1968. During the turbulent 1970s, characterized by an unstable economy with increasing inflation and a high unemployment rate, the growth of private labels overshadowed the primacy gained in previous years. Bowater-Scott, then owner of the brand, succeeded in any case in overcoming the difficulty, creating a new identity for Sorbent. If, at the beginning, it was the jingle that identified the product, now it was up to a cartoon that narrated the adventures of a muscular super-hero - Supermarket Man: the Consumers' Defender! - to represent the strength and value of the roll. In this way, Sorbent was once again able to stand out among other brands, newly awakening sleepy consumers and conquering new ones. The strong will to remain on the crest of the wave stimulated new investments in new technologies. Greater softness and resistance: these were the key elements of Sorbent's new generation of the 80s.

The mascot was the famous Labrador puppy, renowned the world over as the protagonist of Scottex products adverts. During the decade of the 1990s, several different commercials were aired, all equally successful. Among them, one of the most beloved for Australians is the one which shows images of the old Australia to the tune of the famous original Sorbent jingle. And the popular motif represents the liaison between this country's yesterday and today, re-confirming its role of "popular anthem."

Maura Leonardi

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