The Away from Home (AFH) tissue industry is considerably large in terms of its growth and demand in the MENA region. Facilities across various sectors have a high demand for quality tissue paper products that serve every purpose – from hospitality to healthcare, restaurants, catering companies to malls and retail stores. In fact, the UAE paper and packaging industry is the fastest in terms of growth in the MENA region, reaching a market valued at $2.3 billion and will maintain an annual growth rate of 5 per cent till 2019.
According to the Outlook for World Tissue Business Forecast by Pulp and Paper Industry Intelligence (RISI), the region was poised to witness a surge in the sector at an average annual rate of 6.5 per cent from 2013 to 2023, fuelled by growth in gross domestic product (GDP) and population. The study also reported that the volume growth of tissue products in the Near and Middle East will surpass 1 million tonnes by 2023 at an annual average of 103,000 tonnes.
Clean Middle East talks to some of the region’s major tissue suppliers and converters about the AFH market to understand it better. Focusing on the GCC market, Pradeep Nair, General Manager, Fairlink Trading, says, “The size for AFH tissue paper in the GCC region is approximately 644 million AED annually, with UAE’s contribution amounting to approximately 160 million AED.” Sajid Hussain, General Manager, Gulf Manufacturing, adds, “AFH products amount to around 3,384MT annually within the GCC, out of which approximately 1,233MT are imported from China, of which 80 per cent is re-exported within the MENA region."
Globally, tissue products are of three types based on their quality - Premium, Standard and Economy. The GCC market deals in the standard quality, which is mostly made of pure cellulose, informs Nair. Depending on application, products produced and distributed include household and industrial products i.e., facial, toilet and kitchen rolls; maxi rolls; napkins, industrial and hospital bed rolls. According to Hussain, the quality used in the UAE and regional markets is 100 per cent virgin pulp.
Amer Omarzay, General Manager, Metropolic Paper, highlights the different tissue paper products required for different applications. He says, “In the healthcare industry, paper must be of health grade with a lower GSM (grams per square meter) for easy disposal and biodegradation. Hospitals usually require individually packaged hand towels and rolls. In hospitality, the quality of paper increases as the star-rating of the hotel goes up. Luxurious, soft, 2-ply paper is in high demand at such establishments for customer comfort. Such paper is usually with edge embossing and ply bonding for the best absorption. Public washrooms in facilities like malls, etc., use paper with a lower GSM and a biodegradable certification. In F&B, paper must be food-grade certified and absorb moisture while retaining its fibres.”
The right dispensing unit can reduce consumption considerably. Compatible dispensers are necessary for the varied tissue papers available in the market. The wrong dispenser can certainly increase wastage. Both hospitals and public washrooms prefer sensor dispensing machines.
Quality, design and price are the ruling factors in the market. Generally, the GCC market looks for soft, strong, white tissues made of pure cellulose. Hussain says, “In the current scenario, 45 per cent of tissue sales is being generated from shopping malls. Hotels and institutions tend to shift their preferences from virgin to commercial paper (60% virgin and 40% re-cycled or 100% re-cycle paper). Moreover, economical packs are more in demand. And, consumers are equally aware when they buy the products and focus on the finished product, price, design, etc. A lot depends on the quality and origin of machines on which tissues are produced to the satisfaction of the consumers. In recent times, there is also a shift towards bleach free paper,"
Nair says, “Tissues produced by local convertors usually lack ply bonding, therefore reducing absorbency. Recycled tissues are yet to become popular with customers as are premium tissues made using TAD (Through Air Drying) technology in hand towels and toilet rolls.”
He observes that currently, customers are dissatisfied with maxi rolls and interfold hand towels. The latter is incompatible with dispensers currently available in the market, which then results in huge wastage of tissue. Hence, customers are more interested in hand roll towels and their dispensers. The maxi roll, on the other hand, is traditionally sold according to its length but it is difficult for the customer to ascertain the appropriate length required. Price reductions force customers to buy the rolls according to weight, which is directly proportionate to the GSM and TAD technology adds to the confusion since the GSM relevance is affected in these technologically advanced products.
Market changes and sustainability
Tissue manufacturing is growing in all regions albeit at distinctly different rates. Hussain informs, “Two undeveloped tissue markets are (excluding South Africa) and India. These are unlikely to change the market balance in the next five years. Improved hot air hand dryers will continue to take away the hand towel business.” He adds that trends in manufacturing processes, cutting-edge machinery development and tissue end use are being examined both on a global and regional basis. Moreover, the current operating environment and technology development are being assessed for potential disruption to tissue manufacturing and converting.
With the dip in the GCC economy, says Nair, the purchasing decision is to reduce the cost by shifting from premium tissues to standard and economy. And, with hotel occupancy rates on a decline, lower quality tissues are in demand and tissue converters reduce the prices by compromising on the size and GSM. At Metropolic Paper, Omarzay is planning to introduce newer and greener technologies like textured tissue made through TAD or NTT,
which is focused on high observance and reduced usage. While at Gulf Manufacturing, Hussain continues to remain focused on quality and innovation, by improving features and adding value to the products. He and his team are fully geared to meet the forthcoming market trends and it’s challenges.
The outlook for the AFH tissue market seems to be quite positive. Nair concludes, “Per capita tissue consumption will grow to 9 kg, and this will increase the consumption of tissues if we consider 50 million population; consumption will grow to 450K tonnes in the decade to come.” The tissue industry’s biggest challenge is the erosion in brand to commodity. Lack of awareness of the features require for each category confuse consumers and prevent them from making informed decisions, finds Nair.
Hussain is optimistic about the future – he says, “Operating environment trends and diverging product performance levels will push for alternate manufacturing technologies. With tissue manufacturing currently competing primarily on the basis of price, the focus needs to shift to productivity and cost control.” He predicts that products marketing will now involve a two-level strategy with economy and premium performance products being promoted,
While middle-off-the road products will be increasingly left behind. Tree free products are also poised to take off, and this is the period when consumers interest will be assessed. And this is the point where all tissue suppliers must be geare to meet this demand.