Tissue market developments in the Americas

America consumes today some ten million tons of tissue products, of which North America accounts for 78%. But the markets in Central and South America are developing rapidly and offer tissue companies expansion opportunities.

Many Latin American countries have reached, or are just approaching, the phase of economic development when the consumption of tissue tends to accelerate with products other than toilet paper starting their typically rapid penetration. North American markets are relatively mature but population growth, quality upgrading and inventiveness of companies in launching new product specifications keep tissue consumption on a slowing-down but continuing growth track.

Esko Uutela

The volume growth of American tissue consumption totalled two million tons between 1996 and 2003. It is somewhat surprising that more than 60% of this growth took place in the United States, in spite of already very high per capita consumption and mature tissue markets with high penetration levels of all tissue products (Fig. 1).

The late 1990s were a period characterised by a very strong market growth in the USA, but thereafter growth rates have slowed down closer to long-term growth trend; American growth rates dropped almost to half in 2000-2003 from those of 1996-1999 (Fig. 2).

Central American tissue consumption is dominated by Mexico (accounting for 86% of regional consumption). US developments have a clear influence on the growth pattern in Mexico. Tissue markets in some smaller Central American countries, particularly in Costa Rica, Guatemala and El Salvador have shown very strong growth in recent years.

In South America, Brazil accounts for roughly half of regional tissue consumption. Brazil’s tissue consumption has grown less than expected, showing an average growth of only +2.8%/a in 1996-2003 (Fig. 3). Regional consumption growth is also affected by the fact that Venezuela’s tissue consumption was badly hit by the economic crisis of the country (GDP change -8.9% in 2002, -9.4% in 2003) and was not more than 87,000 tons in 2003, or at a level corresponding to 60% of the 2001 consumption level, according to Venezuela’s paper industry association APROPACA. Argentina’s tissue consumption did not fully recover in 2003 from the fall caused by the major economic recession in 2000-2002 (Table 1).

The Caribbean Isles have relatively small total tissue consumption, divided among many countries. But the region as a whole showed very strong consumption growth in the late 1990s, boosted by exploding tourism business. In the new millennium tourism has suffered from terrorism threats, and the growth of tissue consumption has slowed down. Today the Dominican Republic is the largest tissue market in the region (some 20,000 tons), followed by Trinidad & Tobago (14,000 tons).


The United States and Canada are the world leaders in terms of per capita consumption of tissue, both consuming some 24 kg/capita of tissue products per annum. In the USA, the tissue product range is somewhat more developed than in Canada, but this is compensated by the more homogeneous population structure of Canada. Therefore, per capita consumption is at about the same level in both countries In terms of per capita consumption, the range between Latin American countries is very wide.

Trade statistics that we can cover show that among the main countries, Trinidad & Tobago takes the lead with a per capita consumption of more than 12 kg in 2003 (Fig. 4 page 55). But we are not 100% sure if this is a true figure, as we can only estimate exports from Trinidad & Tobago to the neighbouring small islands. There is major tissue converting industry in Trinidad & Tobago, including enterprises such as The House of Paper Products, Trinidad Tissues and Vencaribbean Paper Products (owned by Manpa, Venezuela), major players in the West Indies region. Statistically seen, per capita tissue consumption is very high on some small islands due to mass tourism with a multiply number of visitors compared to domestic inhabitants. This is the situation on some islands, for example Bermuda with its 64,000 population records a per capita consumption of 25-30 kg/inhabitant, even higher than in North America. But this curiosity is related to the small population base and it has little impact on the total regional consumption.


The US tissue market is the most developed worldwide, but it still continues to grow at a multiple rate to population growth. In recent years, the consumer tissue sector has made more progress than the AfH tissue sector. September 11th consequences were to be seen as a major fall in AfH tissue consumption in 2001, but consumption recovered during 2002.

2003 was not a good year for the North American tissue industry. Tissue consumption grew moderately, below the long-term growth trend. The industry had to regulate the demand-supply balance by taking substantial downtime. Even these measures did not prevent a tissue price downslide across the board for all products during 2003. Most tissue manufacturers experienced declining operating profit margins and now have to reverse this trend (Table 2). For 2004 we expect that the tone of the business will improve, but only modestly. The industry can expect a consumption increase of +2.2% for At-Home products and +1.2-1.4% for Away-from-Home products (excluding wipers), measured in tons shipped. In cases of product sold the expectations are +3.3% for At-Home products, and +1.3-1.5% for AfH cases. The difference in At-Home growth rates between tons and cases is explained by the increasing share of bulky TAD products that save fibre (G-P and Potlatch new capacities adding TAD share in particular).


New product launches and existing product re-launches after modified specifications very much characterise the North American tissue business, particularly in the consumer tissue sector. The main recent or current events are Georgia-Pacific’s towel and bathroom tissue re-launches; Potlatch’s new TAD tissue-based private label product range; Procter & Gamble’s simple versions of their brands; and very soon after the time of publishing this tissue of PJL, First Quality Tissue’s new TAD tissue products being introduced in the US market. In the AfH sector, SCA’s new Barton, Alabama mill is expected to be the main base for SCA’s “Tork” brand expansion in the North American markets.

Georgia-Pacific started the re-launch of their new, improved products in late 2003. The relaunches of extra soft “Quilted Northern Ultra” bathroom tissue and more absorbent “hybrid” “Brawny” kitchen towel were completed during the second quarter of 2004. G-P’s Chairman Pete Correll has stated that all the objectives of the relaunches have been met or exceeded, with “Brawny’s” value share of the towel market exceeding its unit share, and the same applying to “Northern’s” value share.

“Northern Ultra” relaunch used “the success from frame” – the product consists of two differently designed plies: the top sheet is embossed, while the bottom sheet is non-embossed. The “Brawny” hybrid towel, consisting of one layer of TAD tissue and the second of conventional tissue, has actually proved to be the quickest absorber of water among the leading towels, including “Bounty”. G-P stated that “Bounty” is superior in water absorption capacity, but cannot absorb as fast as “Brawny”. Potlatch’s retailer label product range from the new Las Vegas TAD PM has been on shop shelves with full effect from the beginning of the second quarter of 2004 onwards.

Potlatch will introduce two towel products as retailer labels. The “HydraSorb” (patent pending) range is a two-ply towel with both plies made of TAD tissue, and the other like G-P’s “Brawny” with the top layer of TAD tissue and the bottom layer of conventional tissue. The main part of production will be “HydraSorb” with performance target at P&G’s “Bounty”, not G-P’s “Brawny” brand.

Procter & Gamble have decided to extend their price-point-shopper opportunities by offering a 400 sheet-count, single-ply “Charmin Basic” bathroom tissue. Although “Charmin” has already been available as a 400-count, single-ply version in many stores, “Charmin Basic” appears as a lower (-20%) price point product than the regular “Charmin” 400-count, single-ply product.

The Albany, Georgia mill is the sole producer of this product at this time. P&G’s plans also include the introduction of “Bounty Basic” kitchen towel in the similar manner as “Charmin Basic”. The product will be single-ply “Bounty” with an offset lower price.

In all quietness, the First Quality Group has been preparing to launch their new TAD tissue products on the US market. Our sources suggest that the company will be in the position to convert and ship the first products on or around October 1, 2004.

The new TAD machine is expected to yield a towel quality that permits First Quality to offer a “Brawny” equivalent private label towel to Wal-Mart. First Quality will certainly offer also bathroom tissue and facial tissue products based on TAD tissue from the machine. It remains to be seen how successful the start of a newcomer to the tissue business will be – even though First Quality has already shown their capabilities in the absorbent hygienic products business.


In 2003, the North American tissue industry experienced a marginal capacity growth of some 60,000 t/a. Only three new machines were started up (G-P Port Hudson, Scott Paper/Kruger Crabtree and G-P Wauna), although several restarts of mills/machines, most of which originated from American Tissue’s heritage, adding some 100,000 t/a capacity in 2003. Wauna’s PM was started up on December 24, 2003 so that the capacity effect is for 2004. Permanent and/or indefinite machine closures (-160,000 t/a) at the same time effectively counterbalanced the capacity situation.

But there may be too many new machines starting up in 2004: four new tissue machines will start up – three of which are TAD machines – together with the Wauna PM and some expected restarts and rebuilds adding more than 300,000 metric t/a of capacity.

Tissue consumption is projected to grow at an average compounded rate of +2.3%/a in North America (USA and Canada) over the period from 2003 to 2006, or altogether by +6.7% in the next three years. Operating rates will remain in the low 92% range – however, this will very much depend on how much older capacity will be closed. Capacity additions would suggest an increase of +7.5% to current production. This does not include so called “natural growth” through debottlenecking at existing mills, bringing another +2.5% into the capacity figures in 2004-2006. More than 250,000 t/a tissue capacity should be closed in order to maintain the current situation, without an improvement in the demand-supply balance. Another factor is the restart schedule of a number of idle machines, some of which (formerly owned by American Tissue) could be restarted (Table 3).

Georgia-Pacific will suffer most from the overcapacity issue. Capacity additions at Georgia-Pacific’s mills to produce TAD towels (160,000 short t/a or 145,000 metric t/a) on top of existing capacity has resulted in closures of three machines at Bellingham, WA and one PM closure at both Old Town, ME and East Mill Green Bay, WI mills. Several other PMs have been announced to be “temporarily” idle or in part-time production. G-P’s evident overcapacity grew further (without additional closures) by some 100,000 short tons of parent reels as SCA’s new AfH tissue machine became operational at their new greenfield mill in Barton, Alabama in March 2004.


Latin American tissue consumption suffered from economic problems in several countries in 2001-2003. Total GDP fell in some countries in successive years (Argentina 1999-2002, Uruguay 1999-2003, Venezuela 1999 and 2002-2003, and several Caribbean Isles in 2001-2003). Economic growth was moderate also in Brazil (2001: +1.3%; 2002: +1.9%; 2003: -0.2%) and Mexico (2001: -0.3%; 2002: +0.9%; 2003: +1.3%), meaning that per capita GDP did not grow at all. We are optimistic that Latin American tissue consumption will recover substantially in 2004-2005, and return on long-term growth trend of +5.5%/a (Fig. 5). Mexico’s economy will benefit from the economic upturn in the USA, and is expected to grow by +4% in 2004.

Expectations for 2004 GDP growth are positive also in Argentina +6%; Brazil +3.5%, Chile +5%; Colombia +4% and Venezuela 8% (but after two successive -9% falls). In this light, there should be good prospects also for recovery in tissue consumption.

Some signs of the recovery can already be seen: Brazil’s tissue consumption grew by +4.6% in January-April 2004 over the same period in 2003.


The number of new tissue projects is currently rather low in Latin America as a reflection of slow demand growth in the largest countries in 2001-2003, and some major investments (e.g. K-C’s and Copamex’s new machine investments in Mexico in 2002) made in 1999-2002. The main currently known investments since 2003 are shown in Table 4. Two new machine start-ups are expected in 2004. Three new machines are expected to come on stream in 2005-2006, but it is possible that some more projects will emerge with improving market outlook. Unicell’s new tissue mill project in Trinidad & Tobago, though delayed a few times, has a major effect on the supply pattern on the Caribbean Islands, reducing imports from South America and elsewhere. There are also some smaller investment projects in Latin America, including two projects by Bipacel – one for the Manaus, Amazonas plant and the other for Acrepel, Rio Branco, Acre. Financing for the 2 projects is reportedly still pending so that it may take time before they are realised. We have ignored in this context most second-hand machine and rebuild projects because of space limitations. Second-hand machine projects worth mentioning include a.o. Papelera Samseng’s project (PM from SCA/Lilla Edet) in Argentina and Copamex’s (now SCA) machine transfer from Mexico to Nicaragua (IUCASA mill). However, at the time of writing we were not able to verify any details on the Nicaragua project and have left it out of our list.•

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