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Portucel Soporcel raises sales and profits in 2015 on higher prices and new tissue business

Friday, Feb 05, 2016

Portucel Soporcel says year 2015 is a landmark in the company's history. Portucel became a player on the tissue market in Europe under a new strategic development plan.

Portuguese Portucel Soporcel Group has delivered a strong performance in 2015. Total sales increased by 5.6% against the previous year to €1.63bn. Operating profit jumped by almost 30% to €282m and net profit increased 8% y-o-y to €196m. The company attributed the €86m increase in sales to higher pulp and prices in euro terms, resulting from the strength of the dollar against the euro, in particular. The inclusion of the new tissue business in the group's consolidated results also contributed to the growth recorded in 2015, Portucel explained.  

According to Portucel, the woodfree uncoated paper market in Europe has seen a 0.3% decrease in consumption in 2015, while weak Euro and strong US dollar supported exports to overseas markets. Portucel expanded paper deliveries to dollar denominated markets by 1.7% with an increase in sales of 14.5% compared to 2014. The group's average sales prices showed a 5% increase over 2014, the company explained.

"Bleached eucalyptus kraft (BEK) pulp business maintained the positive performance record since the start of the year, with prices significantly better than in the same period in 2014," writes Portucel Soporcel. The price increase of almost $40/t ($784 in 2015 vs. $746 in 2014 ) translated into a sharp rise in pulp prices in euro due to the foreign exchange rate.  The upward trend in pulp prices resulted in a 23% increase in sales, despite a 1.7% reduction in deliveries, according to the company.

Sales in the tissue business reached almost €56m in 2015, 9% above last year. The company explained the increase in sales to additional production and converting capacities that allowed for more volume to be sold and to improvement in the average sales prices.

In February 2015, Portucel Soporcel acquired Portugese tissue company AMS Br Star Paper. In September, the company kicked off production on a second tissue machine at the AMS Vila Velha de Rodão site, which has doubled annual production capacity to 60,000 tpy. Furthermore, the company added more than 20,000 tpy in converting capacity. Portucel's new tissue branch operates in both consumer tissue and AFH segments, which consumer tissue accounting for a 75% share. According to the company, the sales strategy is mainly focused on the Iberian market, but the company is working on additional markets in Europe and Africa, in particular. Portucel has recently approved a €120m investment in a new 70,000 tpy tissue machine which will come online at the Cacia site in the first quarter of 2017.

In addition to the Vila Velha de Rodão site, Portucel Soporcel runs another three production sites in Portugal. The Cacia pulp mill has an installed capacity of 350,000 tpy of bleached eucalyptus pulp. The mill at Figueira da Foz has a capacity of 570,000 tpy of eucalyptus pulp and 800,000 tpy of uncoated fine paper. The Setúbal site hosts a pulp mill and two paper machines which together produce 550,000 tpy of eucalyptus pulp and 775,000 tpy of uncoated woodfree paper.

 

euwid-paper.com

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