Preview of the Focus Report - First 3 Pages

A Tissue World New Orleans Initiative

FOCUS

STATE OF THE UNION T&T Key developments in the world’s leading tissue market M&A: intense activity Integration: energy essential?

Innovation: adding value imperative Transition: the emergence of new players Millennials: o strong is t eir in uen e Private label: structural changes in US production?

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Introduction

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News

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Pöyry

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Fisher

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Sofidel

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Resolute

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Cascades

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FOCUS In this issue

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Introduction: the key trends coming your way

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Welcome to TW Focus: North America - Tissue World magazine’s exclusive white paper on the world leader in towel and tissue.

o e with M&A activity

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$700 million+ changed hands in Q4 2015 alone as tissue giants positioned to take advantage of a shift towards AfH driven by less brand loyal millennials, and the transition from printing and writing paper grades accelerated. Pöyry’s Soile Kilpi and Keith Freudenberger report.

USA’s exemplary leadership in T&T papermaking

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One can readily make the case that the United States has been the leader of Towel and Tissue in the world of papermaking. Not only has the USA been the capacity leader, it has been (and to a large extent still is) the leader behind much of the industry’s technology innovation, product design, and performance achievements. Fisher International’s Bill Burns gives an in-depth analysis of the market.

Sofidel e ed o e advantage of growing AfH and private label demand Sofidel Group chief executive uigi a areschi explains his US market strategy on the back of a recovering economy, an increased prominence of Millennials and a shift towards European buying habits.

Resolute accelerates into tissue production

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President and chief executive Richard Garneau explains why the historic “stepchange acquisition” of Atlas Paper positions it to maximise opportunity in the US Southeast.

Cascades

www.tissueworldmagazine.com

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President and chief operating officer ean obin talks new competitors coming on stream, population growth and an increase in TAD product demand in the retail market.

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Introduction

US FOCUS: the key trends coming your way

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elcome to TW Focus: North America – Tissue World magazine’s exclusive white paper on the world leader in towel and tissue.

The aim of TW Focus is simple – to arm you with as much up-to-date information as possible to put you ahead of the curve. We have timed it to maximise opportunity when TW brings industry leaders together for the New Orleans trade show in March.

The US tissue market is continuously evolving. Recent M&A activity reminds us just how fierce the competition is - over $700m changed hands in 4Q 2015 alone.

There are significant new trends: • less brand loyal Millennials are influencing the market; • European giants increasing US market share; • brands facing increased challenge from the European trend for private label; • AfH sales boosted by Americans travelling and dining out more; • former paper specialists jumping ship into tissue; • fluctuating exchange rates and energy costs.

TW Focus brings together leading experts to try to answer some of these hot questions - exploring the who, what, where and why to provide some glimpse into possible future market trends.

Our contributors include:

Sofidel Group chief executive Luigi Lazzareschi who is forecasting significant structural changes in US tissue production; President and chief executive Richard Garneau on why he is steering Resolute Forest Products into tissue for the first time;

Helen Morris

Editor, Tissue World magazine

In an extensive M&A analysis, Pöyry director Soile Kilpi and consultant Keith Freudenberger ask whether dramatic shifts in market share are possible with roughly 60% of total tissue capacity under the control of three producers?; Fisher International examines the US’s historic role in developing the tissue industry – and asks how crucial consumer preference will shape its future; Cascades Tissue Group boss Jean Jobin talks new competitors coming on stream, population growth and an increase in TAD product demand in the retail market.

As the region’s consumer base continues to evolve and demand an even greater variety of high-quality, innovate and better-performing sustainable tissue products, we hope our report gives you an insight into what American tissue players are doing to keep hold of the global top spot.

EDITORIAL HEADQUARTERS UBM Exhibition Singapore Pte Ltd. 10 Hoe Chiang Road, #20-05 Keppel Towers, Singapore 089315 Tel: +65 6592 0888 • Fax: +65 6438 6090

SR. GLOBAL EVENT MANAGER & PUBLISHER Agnes Gehot Agnes.gehot@ubm.com EDITOR Helen Morris helen.morris@ubm.com

ASSISTANT MARKETING MANAGER Lei Ching Yew leiching.yew@ubm.com MANAGING DIRECTOR Paul Wan paul.wan@ubm.com SENIOR VICE PRESIDENT Chris Eve christopher.eve@ubm.com PRESIDENT/CEO Jimé Essink jime.essink@ubm.com

TISSUE WORLD NORTH AMERICA FOCUS REPORT is a single publication, sponsored by Tissue World magazine. The purchase price is 90US$/copy.

Please send your enquiries to info@tissueworld.com In Tissue World Focus Report all measures are metric and all dollars ($) are US dollars, unless otherwise stated.

Copyright 2005 - 2016 by UBM Exhibition Singapore Pte Ltd. All rights reserved. All material printed in the Tissue World Focus Report is owned by UBM Exhibition Singapore Pte Ltd and protected under the copyright act. No material may be reproduced in part or in whole without the prior written consent of UBM Exhibition Singapore Pte Ltd.

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News

“ This acquisition is an excellent strategic fit and makes us a stronger supplier in North America.”

Magnus Groth

SCA closes Wausau Paper acquisition SCA has closed its acquisition of Wausau Paper for USD 513 million in cash.

The European tissue giant consolidated Wausau Paper on 21 January 2016.

Magnus Groth, SCA president and chief executive, said: “SCA is the world’s leading supplier of Away-from-Home tissue with the global brand Tork®.

“This acquisition is an excellent strategic fit and makes us a stronger supplier in North America.”

Wausau Paper produces a complete line of Away-from-Home towel and tissue products that are marketed along with soap and dispensing system products under a number of brands including Artisan™, DublSoft®, DublNature®, EcoSoft®, and related custom brands.

The transaction expands North America footprint production capacity.

SCA’s and

Michael C. Burandt, chairman and chief executive of Wausau Paper, said: “With the closing of this transaction, the Wausau team joins an organisation that shares our vision and values.

Gordon Brothers Group purchases assets formerly owned by Lincoln Paper and Tissue

“We believe this provides an opportunity to capitalise on new resources and opportunities that will benefit our customers.”

Gordon Brothers Group has purchased the assets of Lincoln Paper and Tissue as part of a joint venture that includes Capital Recovery Group (CRG), PPL Group and Rabin Worldwide.

The move enhances SCA’s AfH premium tissue portfolio and extends its North American footprint and production capacity.

Wausau Paper is one of the largest AfH tissue companies in North America; it has 900 staff and manufactures and markets AfH towel and tissue products along with soap and dispensing systems through its Artisan™, DublNature®, DublSoft® and EcoSoft® brands.

Its towels and tissue are manufactured entirely from recycled paper.

It reported sales for the first half year 2015 amounted to USD 175 million and EBITDA of USD 32 million.

The global advisory, restructuring and investment business specialises in the industrial, consumer products and retail sectors, and the acquisition follows the Maine-based tissue and paper mill’s file for bankruptcy in late September 2015.

Bob Maroney, president of the commercial and industrial division of Gordon Brothers Group, said: “Our purchase of this mill provides a significant opportunity for a strategic operator to restart the mill.

“In the event an operator does not materialise, we will provide buyers with the chance to purchase some highly

TW Focus Report: North America

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