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In commemoration of the 12th annual International Holocaust Remembrance Day, 67 years after the opening of the gates of Auschwitz by the Red Army, we remember The Wrench, a novel by Primo Levi published in 1978 and awarded with the Strega Prize, the most prestigious Italian literary award, in 1979. This work by Primo Levi is included in the industrial style of literature that was in vogue during the 1960s. The story revolves around the adventures of a specialised labourer, Libertino Faussone, who represents the image of a wilful man, doing demanding and strenuous work, and who realises himself and finds his spirit through exertion and pride in his work. “If we exclude the single prodigious instants that destiny can give us, to love one’s own work (which is,...

Not before I have sold my last item of furniture will I stop buying toilet paper. And I’m probably not alone in that view. This is a consolation and one of the great strengths of the tissue business. There is no prospect of tissue substitution in the foreseeable future. There are factors beyond our control, mainly economic, which can influence our success or otherwise in this business. Decisions made by Ben Bernanke at the US Federal Reserve are likely to have more influence over your bottom line than your competitors’ strategies. So we need to manage the risks we can’t control, but focus on what we can control. I’d like to highlight three aspects of our business which we can still influence strongly – service, innovation and energy. Service What we can...

Another day, and news of another new tissue machine in China pops in my inbox courtesy of RISI. This time it’s Zhejiang Jingxing, boosting capacity by 68,000 tpa. At least half of last year’s new tissue machine orders came from China and as we all know, just modest growth in Chinese demand for tissue needs at least a couple of new lines to service it. But is there a way we can evaluate the Chinese business opportunity beyond sheer market size? The benefits of a slight boost in demand can easily be outweighed by a slump. Big opportunity = big risk? You only have to look at the stock flotation in New York in early May of Renren, the Chinese social network, to see how China’s potential can lead to some wild speculation. Renren was priced at 72 times...

Away-from-Home/Professional Green issues Green issues are nothing new in tissue, but there has been a renewed focus with the increased interest in climate change combined with adverse publicity about forestry practices, particularly in North America. SCA’s response has been to set up the Tork Green Hygiene Council “to assist in its ongoing commitment to providing hygienic and environmentally responsible away-from-home washroom solutions.” The environment is a particular concern in professional tissue, because corporations are held responsible for their buying decisions in a way which is not possible for consumers. Tissue choice can affect a company’s carbon footprint, so it has to be taken seriously. With this in mind, Sofidel from September 2009...

Product innovation As explained earlier in the report, pure product innovation has been held back by economic conditions. But it has by no means been absent. Product innovation is dominated by, but not exclusive to, brands. Private label innovation tends to be more strategic rather than purely product focused, although there are signs that this might be changing, as private labels fight the brands for market share. This is most likely to happen where a single retailer, such Walmart, or on a different scale, Migros in Switzerland, has sufficient market presence to command genuine and exclusive product innovation from its suppliers. It is a global trend for private label producers to demand greater differentiation and exclusivity from converters, who need to be more...

Introduction The main driver of innovation in the tissue roll products market during the past decade has been mature markets, in which possibilities for increased sales volumes are limited. Producers have sought to grow their business through added value instead. This effect was stifled by the world economic downturn, with consumers looking to save money and buy basic alternatives to luxury consumables. This has undoubtedly had the effect of holding back product innovation in the industry. Producers have not ceased to take an innovative approach to their business, but this innovation has been strategic – pack sizes, marketing etc. – rather than pure product development. The depressed market has favoured private labels as they are perceived to offer better...