Pulp Paper & Logistics
ANDRITZ 15 POYRY ¨
are normally higher for an integrated player as the concept has many cost benefits, while the producer is also stronger and less vulnerable with its own base paper. Consequently, adding base paper production is attractive to sizable independent tissue converters. Investors are currently active in the tissue sector making base paper additions possible, and enabling consolidation moves. Therefore, even investors can be considered a new entrant group.
Large family companies and financial owners increasing their share In the 1990s large multinational paper or hygiene companies accounted for a large share of tissue companies in Europe. Family-owned companies were small and more locally based. A significant share of tissue companies were private, local single-mill companies. The number of large listed and multinational companies has reduced from those days. Current major ones include SCA, K-C and Metsä Group (Metsä Tissue). The exit of
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Pulp mill forward integration • AMS/The Navigator Company • Paper Prime
Pulp mill forward integration • AMS/The Navigator Company • Paper Prime
Graphic paper site conversion • Norske Skog, Bruck • Arjowiggins Charavines/Global Hygiene
integration •
integration •
Graphic paper site conversion • Norske Skog, Bruck • Arjowiggins Charavines/Global Hygiene
Independent converters backwardIndependent converters backward Accroll Papers
• Global Hygiene • Vajda Papir
• Global Hygiene • Vajda Papir
Accroll Papers
Financial buyers entry • Abris Capital-Pehart Tec • Venture Investment & Yield Management - STG
North American companies from Europe has reduced the presence of multinationals and non-European companies significantly. Family-owned companies
Tissue Capacity (%) by Ownership Type
7 % 15 %
Other companies 38 % Investors and private funds
Public and other large companies
Family and private 40 %
have grown significantly, spreading across and even outside of European regions. New family companies have also become more visible. In addition, the industry has seen the reincarnation of family companies, such as Carrara
Financial buyers entry • Abris Capital-Pehart Tec • Venture Investment & Yield Management - STG
1. Competitiveness of smaller pulp mills in market pulp production
2. Tumbling graphic paper demand
2. Tumbling graphic paper demand
3. Manufacturing cost benefits 4. Investment cost savings 5. Ease of entry 6. Higher margins
7. Financial power to carry through plans
Group carrying the family name of former Cartoinvest owners and the independent converter Leicester Tissue Company owned by the Tejani family (former owner of LPC). Financial owners are also
becoming more common in tissue, especially in growth areas such as Iberia and Eastern Europe. Local funds have been common participants in smaller deals, while large international funds have always shown interest when anything significant has been for sale, as now related to the recent split of SCA into two companies. There are investors behind
several tissue companies, either full or partial. In addition, there are various small privately or even state owned companies. For many small companies the ownership structure is not known. The European top 100 tissue
base paper producers’ capacity is broken down into different ownership categories. Family and private companies account for approximately 40 per cent of capacity. Listed, large, and often multinational companies are the
7. Financial power to carry through plans
second biggest group. Investor ownership of tissue base paper producers accounts for approximately seven per cent of ownerships. This analysis does not include independent converters, which are mostly private companies, but can also be owned by investor funds (e.g. Accrol Paper). Minority ownerships, such as the case of Syktyvkar Tissue Group (30 per cent Venture Investments & Yield Management), are also excluded from this estimate. Considering all of this, it is fair to say that some 10 per cent of the European tissue business is in the hands of financial owners. There are no large groups
involved in this type of ownership at the moment, although in Eastern Europe these kinds of players are developing. • Pirkko Petäjä, is Principal;
Mikko Helin is Senior Consultant at Pöyry Management Consulting. More information from Pöyry Management Consulting Oy, PO Box 4, FI-01621 Vantaa, Finland. Tel. 358 1 0332 2329. Email:
pirkko.petaja@
poyry.com Website:
www.poyry.com
November/December 2017
3. Manufacturing cost benefits 4. Investment cost savings 5. Ease of entry 6. Higher margins
1. Competitiveness of smaller pulp mills in market pulp production
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