ABC Tissue has confirmed that it will build its long awaited second tissue machine (PM2) in Sydney by the end of 2015. Source: IndustryEdge
Building on its recent dominance of the toilet tissue market in Australia, the privately owned company has long been expected to install a second machine at its headquarters in Sydney.
The existing tissue machine in Sydney can produce 30 kt of tissue per annum. ABC Tissue’s Brisbane mill also manufactures around 30 kt per annum.
Although not confirmed, it is considered that the minimum capacity for a new installation would be a further 30 kt per annum. However, the prospects are that the new machine will be larger, possibly with capacity of 50 kt per annum.
By any measure, ABC Tissue’s decision to install new capacity is a major event.
Current Australian tissue production capacity is 235 kt per annum and it is estimated in the 2014 Pulp & Paper Strategic Review its utilisation rate was sub-optimal at 79% in 2013-14.
Assuming domestic production remains at or near its current levels over coming years, the total industry’s capacity utilisation will fall when ABC Tissue’s new machine is commissioned.
Should ABC Tissue’s new machine have capacity of a modest 30 kt per annum, Australian capacity utilisation will fall below 70% for the first time in decades.