SCA Hygiene Products, the Swedish producer of Zewa, one of the most established global paper brands, generated 70% higher Zewa sales on the Romanian market in the first five months of this year, both in terms of volume and value.
The company's sales posted a stronger increase in modern retail, with the Zewa brand reporting a 78% increase in terms of value and an 84% increase in terms of volume, according to the Romanian unit of SCA Hygiene Products Swedish group, Zewa producer, as quoted by MEMRB data.
The Consumer Tissue unit of the Swedish group derives an annual turnover worth 20m euros in Romania, whilst operating on four segments including Zewa tissues, Libero baby diapers, Libresse women's hygiene products and Tena incontinence products. "Powerful brands are very important to Romanians and Zewa is such a product. Romanians are not loyal to products unless they are market leaders," believes Doru Petrescu, sales manager with SCA Hygiene Products.
More than half of the company's sales in Romania are channelled through the International Key Account network (modern retail), a trend that has remained constant in recent years.
"Investing in Romania is highly attractive for a paper producer. Paper is a volume commodity and the products destined for Romania come from Austria and Germany," said Doru Petrescu.
The Romanian market has accelerated in recent years, with the growth outlook for the future remaining solid. The overall volume of the paper market is 60,000 tonnes, and the value stands at around 50m euros, according to ZF estimates. According to the company's estimates, the market registers an annual growth of around 10% in terms of volume and 20% in terms of value.
"The German and Austrian plants perform at an optimum capacity, with high productivity allowing for economies of scale to be achieved, largely offsetting transportation costs. At certain times, however, volumes increase so fast that an investment becomes interesting to make. Whether it is an acquisition or a greenfield investment, that remains to be seen," says Petrescu.
The Swedish company is currently tapping into the premium segment of toilet paper with the Zewa brand, which entails ongoing promotions and strong communications on all channels.
"The market is fragmented, but is consolidating. There are only a few producers, while there are more than 30 distributors. SCA holds 19,6% of the toilet paper market, whilst Zewa leads the market boasting a growth rate higher than the market level," says Petrescu. In modern retail, SCA is the market leader and has a 29% share in terms of value, according to MEMRB data, as quoted by the company.
"The market will continue to see strong growth given the very low consumption per capita in Romania. Domestic consumption amounts to around 2 kg of paper per year, while in the West consumption is close to 16 kg," says Petrescu.
SCA Hygiene Products
Is the Swedish producer of the Zewa brand, one of the most established global paper brands
Generated 70% higher Zewa sales on the domestic market, both in terms of volume and value, in the first 5 months of this year
The company's sales posted a stronger increase in modern retail, with the Zewa brand reporting a 78% increase in terms of value and 84% in terms of volume
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