While revenue maintained growth, profitability has declined over the past five years
New York, NY (PRWEB) April 09, 2014
The Sanitary Paper Product Manufacturing industry has experienced volatile growth over the past five years. Revenue has experienced ups and downs due to volatile demand associated with the global recession. Additionally, similar to the overall Canadian forests products sector, industry revenue is anticipated to remain below the heights reached in the first half of the 2000s. Nevertheless, given that sanitary paper products are necessities for consumers, industry operators have fared better than firms specializing in other types of forest and paper products. In particular, adult incontinence products are a major growth area for industry operators, given the aging Canadian population. Indeed, the number of adults aged 65 and older grew at an average annual rate of 3.5% over the past five years. As a result, in the five years to 2014, industry revenue is anticipated to increase at an average annual rate of 2.4% to $1.1 billion, including growth of 0.4% in 2014.
According to IBISWorld Industry Analyst David Yang, “While revenue maintained growth, profitability has declined over the past five years.” Industry operators have faced pricing pressures due to rising wood pulp prices. Import competition has also intensified because downstream customers looked for bargains following the recession. From 2009 to 2014, wood pulp prices are expected to increase at an average annual rate of 6.6%, causing profit to fall in 2014. Consequently, paper manufacturers have consolidated operations and focused on expanding industrial automation. In the five years to 2014, employment is anticipated to fall an average of 0.4% per year, while the number establishments is anticipated to fall an average of 1.3% per year.
The Sanitary Paper Product Manufacturing industry is anticipated to return to steady growth over the next five years as demographic changes stimulate consumer demand. “In particular, the steadily growing and aging population will drive demand for tissue, toilet paper and adult incontinence products,” says Yang. Improving consumer confidence and income levels will also drive demand for higher quality and premium sanitary paper products, further bolstering revenue. However, the industry will continue to face competition from imported sanitary paper products, though profit margins are anticipated to increase due to falling wood pulp prices. Overall, IBISWorld forecasts that industry revenue will steadily increase in the five years to 2019.
For more information, visit IBISWorld’s Sanitary Paper Product Manufacturing in Canada industry report page.
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IBISWorld industry Report Key Topics
The Sanitary Paper Product Manufacturing in Canada industry converts sanitary paper stock or wadding, as well as pulp and paper, into sanitary paper products such as facial tissues and handkerchiefs, table napkins, towels, toilet paper, disposable diapers and tampons. Some operators may manufacture their own sanitary paper while others purchase it from mills. Final industry products are sold to wholesalers for distribution, straight to retailers or directly to large companies.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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