Innovative advances across the industry have seen 25% of tissue production going for export, three times higher than imports. Report by Bruce Janda, Senior Consultant, ResourceWise.
Portugal, which borders Spain and the Atlantic Ocean, has a rich trading history. Brazil’s language and culture reflect the Portuguese Empire’s influence. Both countries share another similarity: they produce and consume eucalyptus market pulp for tissue production. As tissue exporters, they can integrate more eucalyptus pulp production on-site to lower the cost of exporting finished tissue compared to market pulp.
Figure 1 shows Portugal’s tissue production facilities. Besides the integrated site, four other market pulp sites also produce market pulp. There is significant potential for additional integrated tissue production to achieve cost savings and environmental benefits.
Portugal has a population of approximately 10.5m, which has declined slightly over the past 10-12 years. The World Factbook projected a – 0.14% growth rate in 2024, while FisherSolve by ResourceWise data reports some recent growth due to immigration. Portugal is becoming an increasingly popular destination for retirees from colder and more expensive northern countries. Although older immigrants may not have a long-term effect on the population, they are likely to impact demand immediately. Figure 2 presents Portugal’s population as bars since 2007.
Real GDP per capita, expressed as PPP (purchasing power parity), is represented by the blue line in Figure 2. It has shown significant growth following the Great Recession and the Covid-19 pandemic. This income level is expected to continue supporting the increase in per capita tissue consumption. Portugal’s tissue consumption per person tends to be lower than that of northern Europe, indicating potential for growth in categories other than toilet paper, which is currently the primary focus. Additionally, Portugal is reporting increased installation of bidets and automated toilets, similar to trends observed in Japan. This may decrease demand for bath tissue but create opportunities for growth in towel and AfH commercial applications.
Inflation and unemployment are key indicators of economic factors that slow down tissue consumption. Figure 3 shows Portugal’s inflation trend as a blue line. Inflation has mostly been stable, except during the pandemic recovery period, when it spiked in 2022. Unemployment is represented by the bars in the chart and is currently near 4%. However, the youth unemployment rate for ages 15-24 is around 21%, which is concerning and similar to the situation in many other European countries.
Figure 4 shows Portugal’s tissue import trends, with Spain as the main source. Imports notably spiked in 2024, coinciding with the shutdown of a tissue line (see Figure 5).
Portugal has seen significant growth in tissue exports, as shown in Figure 5. Spain, France, and the United Kingdom are the main tissue buyers. Exports are roughly three times higher than imports (except for 2024) – exporting about 25% of its tissue production capacity.
Portugal added six new tissue machines and removed one in 2024, positioning it mid-range for machine technical age (see Figure 11). No new projects are planned.
Eucalyptus trees were introduced to Portugal in the late 19th century to prevent soil erosion and provide income for rural communities. Today, bleached eucalyptus pulp makes up 3% of Portugal’s exports and 1% of its GDP. Eucalyptus plantations cover about 25% of all forested land. Almost 75% of these plantations are managed by private landowners, with the rest overseen by paper companies. Figure 7 displays eucalyptus pulp production for the market, showing the proportions of kraft and magnesium sulfite pulp. The sulfite pulp is used in viscose production for fibre manufacturing. Some kraft pulp is used domestically, excluding integrated pulp produced at tissue manufacturing sites. These eucalyptus plantations pose similar environmental risks as those in Brazil: fire risk, water demand, and soil depletion. Figure 7 shows the market pulp production of Kraft and magnesium sulfite (Magnafite) eucalyptus pulps at the five market pulp mills.
Portugal has several integrated tissue mills alongside virgin pulp mills. Nearly 60% of the country’s tissue facilities are integrated, either with virgin or recycled pulp, providing opportunities for cost savings and environmental benefits through the process synergies of larger combined sites.
This integration enhances operational efficiency and supports cost-effective production, which is further explored in subsequent figures. Additionally, product formats and manufacturing technologies have diversified, reflecting the evolving preferences of consumers and the adoption of innovative processes throughout the industry. These advances contribute to Portugal’s growing reputation as a competitive player in the European tissue market.
Fibre sources for Portugal’s tissue production are shown in Figure 9. Consumer bath tissue accounts for more volume than all other tissue product types combined. Eucalyptus fibre accounts for approximately 60% of the bath tissue volume. Recycled fibre is also used in bath tissue, as well as in consumer towels, facial tissue, and creped wadding. Commercial products for AfH use have relatively small volumes compared to those in other European and North American countries, indicating an opportunity for increased tissue demand.
Portugal also has advanced tissue manufacturing technology that enhances the performance of tissue products with lower fibre grammage. This technology is specifically focused on bath tissue production, likely for export. Growing tissue demand and trade expansion may require the use of advanced technology to produce consumer kitchen towels that meet expectations in France and the UK.
A comparison set of tissue manufacturing countries was selected from nearby trading partners and countries with a focus on tissue exports to benchmark Portugal’s tissue machine quality. This set includes France (imports), Germany (imports), Italy (imports), Spain (imports and exports), Indonesia (imports), and Brazil (benchmark).
Results of this benchmark comparison are shown in Figure 11. Spain and Portugal are in the middle of this group for technical age, while Indonesia and Brazil have newer tissue machine fleets on average. The Y-axis of this chart is the average machine speed. This was chosen as a benchmark because it shows Portugal’s tissue machines running at higher speeds than Spain, France, and Germany, indicating technical capability. It should be noted that the width of Portugal’s machines is slightly narrower than those of the others.
Figure 12 shows the average tissue production costs across countries in the comparison group, including Portugal. Each bar’s height indicates the cash cost per ton, while its width reflects tissue capacity. The coloured segments represent various cost components, such as raw materials, pulp, chemicals, energy, labour, overhead, and credits. Brazil, Indonesia, and Portugal have the lowest costs compared to other European tissue producers. Integrating tissue manufacturing with fibre production on-site provides some cost benefits over relying on purchased pulp.
Figure 13 illustrates the relative average viability of the comparison country set of tissue machines. FisherSolve’s algorithm utilises estimated capital requirements, cash production costs, machine size, technical age, grade risk in the local economy, internal company risk, manufacturing competitiveness of the area, tons per unit trim, and export destination charges. Portugal and Indonesia hold the most viable positions, followed by Spain. Meanwhile, France, Germany, and Italy have significantly lower viability scores for their tissue capacity. This indicates that they would be at risk if Portugal were to expand their tissue capacity.
Figure 14 illustrates Scope 1 (on-site fuel) and Scope 2 (electricity) carbon emissions per the ton of finished tissue produced. The data indicates that Brazil and Portugal’s carbon emissions are low, due to low electric grid carbon (scope 2 balancing out high carbon emissions (scope 1) from fuel oil burned onsite. Only France’s nuclear-based electric grid does better to facilitate low-carbon tissue production. Brazil appears to be getting more process heat from renewable sources on-site than Portugal. Conversely, Portugal has a lower electric grid carbon content, along with Spain.
Portugal Tissue Summary
Portugal’s tissue manufacturing sector demonstrates strong machine speeds and comparatively low production costs when benchmarked against global competitors.
The integration of tissue production with on-site fibre manufacturing offers Portugal a significant cost advantage relative to countries dependent on externally sourced pulp.
Portugal and Indonesia lead in machine viability, whereas France, Germany, and Italy exhibit lower viability scores and face heightened risk should Portugal increase its production capacity.
Portugal sustains low carbon emissions per ton of tissue, primarily attributable to its low-carbon electric grid; in this regard, only France, with its nuclear-based grid, achieves superior performance.
While Brazil attains lower process heat emissions due to higher utilisation of renewable on-site sources, Portugal excels in maintaining low electric grid carbon content, comparable to Spain.
The Portuguese tissue industry is shaped by fluctuations in fibre prices, exchange rates, and evolving environmental regulations, alongside ongoing changes in ownership structures and potential capacity investments from neighbouring countries.
A detailed understanding of tissue producers and their individual machines is crucial for analysing the competitive landscape. This article presents an overview of the current tissue industry in Portugal. Fluctuations in fibre prices, exchange rates, and environmental regulations create both opportunities and challenges for industry participants. Moreover, changes in ownership and consolidations are expected to persist among tissue mills in Portugal, while investments in tissue-making capacity from neighbouring countries may impact imports and exports.
