Pulp Paper & Logistics


ANDRITZ 13 POYRY ¨ Cartoinvest -02 P-G -07 SCA Werra -07 LPC -10


Sofidel K-C


Wepa


Metsä-Tissue Tronchetti Lucart


Carrara SHP


-400 0 Paloma -16 400 800 1200


Kartogroup -08 Zilina -06


K-C Capacity 2017


Capacity 2000 Acquisitions / divestments New PMs


Shut Downs 1600 Capacity 2017Q1, 1000 tons How the tissue industry has changed between 2000 and 2017, showing the leading manufacturers


led K-C to actively divest its less profitable units and locations, where it does not have ‘number 1 brand position’. Since 2000, K-C has divested some 300,000 t/a tissue capacity as individual mills to different buyers. In the same time period,


strategic acquisitions, such as SCA’s acquisition of P&G and G-P, Sofidel’s acquisition of LPC and WEPA’s of Kartogroup. These deals have resulted in significant synergy benefits and positively impacted the business environment. There is, however, a limited number of opportunities for large acquisitions. Finding one buyer for all, or the majority of, assets has become difficult. This has


most of the largest companies in the industry have made a clear transformation through acquisitions. SCA, the clear leader in the M&A activity, has more than doubled its size in the last 15 years. Sofidel first expanded throughout Europe with new mills, and then through acquisitions. Sofidel has grown into a million-ton company, and has recently started to expand outside of Europe. WEPA made one of the biggest leaps by first acquiring Kartogroup, and more recently through active organic growth and complementary smaller acquisitions. Kimberly Clark has been a clear


exception – its capacity in Europe has reduced by more than 30 per cent. Metsä Tissue has been stagnant. The last acquisition it made was ten years ago, and the company’s organic growth has been cautious, mainly replacing outdated capacity. Companies on the smaller end of this


spectrum have grown steadily and have doubled their capacity since 2000. Lucart has made acquisitions and built mills in France and Italy, and Carrara in Italy.


Recent M&A activities focused on small companies and individuals mills In the last five years, since SCA’s Georgia-Pacific acquisition in 2012, European tissue acquisitions have been relatively small. Deals have included re-arrangements related to the aftermath of the G-P exit: Sofidel’s completion of its portfolio through purchase of selected targets, and WEPA’s strategic acquisitions in the UK and France, and divestment of two Italian mills. In addition, recent deals have involved acquisitions of individual single mills, or small companies, where the buyer is often a private equity fund and in many cases, the seller is K-C. In some cases, there is


distinct strategic benefit to the smaller deals. These are often concentrated to the CEE, currently a ‘hot’ area in European tissue. The Paloma deal, whereby the Slovenian


company finally ended up with the Slovakian SHP, is one step towards Eastern European consolidation. Also,


2000 2400 2800 G-P -12


4


Mikko Helin, Senior Consultant at Pöyry Management Consulting


“The largest companies in the tissue industry have made a clear transformation through acquisitions,” says Pirkko Petäjä, Principal at Pöyry Management Consulting


November/December 2017


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