The industry for sanitary paper making will see its revenue decline by an estimated 2.3 per cent this financial year, with a new report citing low-cost imports among factors pressuring margins.
The new Sanitary Paper Product Manufacturing in Australia – Market Research Report (2015-2030), compiled by research firm IBISWorld, said import competition was partly to blame, with Imports from countries including China, Indonesia and Singapore up sharply, “fuelled by lower production costs and advantageous trade agreements.”
Other sources of pressure on the industry – which is predicted to see a decline of revenue by 0.3 per cent over the past five years.– include ecommerce and direct-to-consumer sales models cutting into market share, and no manufacturing presence for the industry in Queensland.
Another negative trend affecting margins is input costs “set to continue climbing”, with passing price hikes to consumers having its limits, and “rival products ready to absorb demand if consumers feel a brand is charging too much.”
Industry representatives including the Australian Industry Group and Australian Food and Grocery Council have recently cited lingering high inflation for manufacturers in areas such as energy, commodities and logistics, despite moderating inflating figures for consumers.
The IBISWorld report counts 52 businesses operating in the tissue paper manufacturing sector, with the three biggest being Kimberly-Clark Pacific Holdings, ABC Tissue and Essity Holding Australia.
Picture: credit Kimberly-Clark
Further reading
Cost pressures leading companies to consider increasing prices, ending production altogether: AFGC
AFGC: annual figures show resilience in tough era, though “strategic intervention” needed