A DYNAMIC TISSUE MARKET DESPITE POLITICAL AND SOCIAL BARRIERS

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In one of the world’s fastest-growing regions, the industry is strategically poised for expansion with populations and disposable incomes increasing. Bruce Janda, Senior Consultant of Fisher International reports.

The Middle East stands as a prominent birthplace of human civilisation, with shared linguistic and religious origins. However, enduring differences and disputes that have simmered for centuries and even millennia continue to hinder the development of pan-regional cooperation across many business sectors. Tissue is one of those.

It is politics, rather than geography, that dictates economic collaboration and trade within the region. Therefore, an analysis of tissue demand and production in the area must take into consideration these factors. The component countries of the Middle East are not well defined and vary by political instead of geographic definitions. Statistical sources use several different definitions. This report considers Bahrain, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Palestinian Territories, Saudi Arabia, Syria, UAE, and Yemen.

Table 1 summarises key differences in the region derived from the World Factbook. Economic and trade rate data is more difficult to obtain in closed societies. Some of these figures are the best estimates of the source noted. In this case, the Palestinian Territories are broken separately as Gaza and West Bank. Data shown in the table are mostly 2023 estimates and go no earlier than 2021, except as noted for Syria and Yemen.

The disparity between rich and poor countries in the Middle East is shocking and probably the result of the current and historic conflicts. Despite this, tissue demand and production continue to increase. Several factors that drive the growth of the tissue industry in the Middle East include:

• The growing population and disposable income. The Middle East is one of the fastest-growing regions in the world, and the population is expected to reach over 600m by 2050. This growth is accompanied by an increase in disposable income, making tissue products more affordable for more people.

• The increasing awareness of hygiene and sanitation. There is a growing awareness of the importance of hygiene and sanitation in the Middle East. This leads to increased use of tissue products for personal hygiene and cleaning.

• The rising demand for tissue products from hotels, restaurants, and other businesses. The tourism industry is increasing, driving the need for tissue products from hotels, restaurants, and other companies. However, it’s important to acknowledge some headwinds that impair the development of a robust regional tissue sector, such as:

• Lack of access to recycled paper. The Middle East lacks robust access to recycled paper, a primary raw material for tissue production. This forces tissue manufacturers to rely on virgin wood pulp, which is more expensive.

• Competition from imported tissue products. Some global tissue manufacturers are setting up production facilities near the Middle East to take advantage of the growing market. This is increasing competition for local tissue manufacturers.

We last discussed this region in 2021 during the pandemic. And since then, the Russian invasion of Ukraine has further divided the area and boosted energy exporters. A map of the Middle East region is shown in Figure 1, with tissue mills shown as pin markers. Egypt is an African tissue maker but continues to be part of the cultural and economic ties of the Middle East.

Tissue imports into the region are shown in Figure 2. Turkey and Indonesia are significant sources of tissue imports, with smaller amounts from China and Italy. Egypt is counted as a producer in the region, but it would be a substantial source on this supply chart if broken out separately.

Tissue product exports from the Middle East are shown in Figure 3. The enormous export contribution of Egypt tends to overshadow the other producers. A study of the intra-Middle East tissue trade would be complicated enough to merit a separate article. However, except for Egypt, relatively little tissue is exported from the region.

Egypt, Iran, UAE, and Saudi Arabia are the overwhelming heavyweight producers in the region. Iran and Saudi Arabia have also announced significant new tissue projects that are to come online in 2024-25. However, Lebanon, Israel, and Jordan have lost capacity over the trend period shown. Iraq discontinued production in 2012. The trend of tissue machine count changes is shown in Figure 4. Note the forecast increase in 2024. The number of machines can be misleading as the new machines coming in tend to be much larger and faster than the old ones that were shut down.

The region’s tissue fibre use for each finished product is shown in Figure 5. Some eucalyptus and other tropical hardwoods are used in the consumer grades. Relatively little recycled fibre is used, except in commercial bath. Some producers have work underway to increase the use of low-cost recycled fibre.

The exact breakdown by finished tissue product is shown in Figure 6. Here, the coloured bar segments represent each country’s tissue production mix. Most countries tend to make the same product range, but Iran specialises in absorbent liners and creped wadding.

The quality of the Middle East’s tissue machine fleet is shown in Figure 7. The size of the bubble for each country represents the relative production capacity. The X-axis represents the average technical age, and the Y-axis represents the average machine width. This tends to track well with average machine (...)

This is just an article preview, for the full magazine, articles, images and charts open the PDF. Tissue World Magazine, The independent news provider for the global tissue business