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CountryReport: Spain
Figure 1
as shown in Figure 3. This reflects the very low Spanish birthrate and emigration to other European Union countries as people look for work. Figure 3 doesn't tell the whole story, however. The United Nations population division forecasts that Spain's will decrease by 9.4m or about 24% by 2050. This follows the trend of low fertility and aging populations seen in most developed countries, but Spain is expected to see the most significant impact. Whether this extreme decrease will come to pass cannot be proven at this point. Anyone who has forecasted future school enrollment or even baby diaper demand for children not yet born understands this frustration. Immigration is another politically sensitive subject in developed countries, but again this could change over the next 30 years. The key takeaway is that Spain is at high risk for a significant decline in consumers of tissue products.
Tissue production characteristics Spain's tissue production capacity was carefully managed during the economic downturn and recovery. The cumulative average growth rate for domestic tissue capacity was 0.57%. Adding the announced changes through 2021 results in a cumulative annual growth rate of 0.52%. Figure 4 shows the changes in the number
Bruce Janda Senior consultant, Fisher International
of Spanish tissue lines over this period. This indicates that the country has taken out smaller machines and replaced them with several larger machines, all while keeping capacity flat in order to slow growth. Spain’s tissue imports over the recent periods are shown in Figure 5. The short bar shown in the year 2019 represents data through the second quarter only. Tissue imports represent less than 10% of total tissue consumption. These appear to have decreased since 2008 and have been relatively level since. Spain's tissue exports are about four times lower than imports. Figure 6 suggests that exports have continued to drop off with time. A quick review of the country’s tissue trading partners around the world shows that Belgium, France, Germany, Italy,
Figure 2
Tissue World Magazine | November/December 2019
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CountryReport: Spain
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pain's tissue business has been shaped by the economic challenges the country has faced since 2007. The great worldwide recession that started 12 years ago disproportionally affected Spain's economy. By 2018, the country had recovered lost GDP but only partially returned to unemployment levels seen before the downturn. Figure 1 shows the changes in real GDP as a percent in orange bars compared to the sum of household final consumption expenditures in blue. This is important to note because it indicates consumer spending available for tissue. Total household expenditures in 2018 have just about recovered to the 2007 level. Figure 2 pairs the unemployment rate and the consumer price index over the same economic downturn and recovery. The unemployment rate shown as orange bars has not entirely recovered to 2007 levels. Unfortunately, the consumer price index has continued to advance during this period. This economic difficulty also reduced the per capita tissue consumption per person, which dropped from about 17.5 kg per person in 2007 to approximately 15.5 kg per person in 2010. Spanish tissue consumption has recovered recently to the pre-downturn demand levels. After the downturn started, Spain also experienced changes in population, with numbers flattening to slightly decreasing,
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SPAIN’S TISSUE BUSINESS WEATHERS ECONOMIC CHALLENGES BUT FACES HEADWINDS FROM DECLINING POPULATION