Together with Fisher International, I-Plan and Valmet Automation, Tietoevry conducted a global market study in the tissue industry from June to October 2022. The purpose of this study is to find new methods and areas to improve efficiency and focus on efficiency; cross-border thinking and end-to-end value creation through digitalization; and support for a sustainable industrial future.
A total of 36 respondents from 50 verified tissue production companies around the world participated in the study, gaining insight into their current situation and areas of focus, while also sharing information on the expected impact of current market conditions, as well as possible investments and trends.
Below is a brief overview of the findings.
Sustainability: Going hand in hand with digitalization
In the study, profitability and sustainability topped the list when asked about important areas of development and improvement, as shown in Figure 1. A key message from respondents was that the outlook for the tissue business was uncertain on many fronts and business fundamentals were being reviewed due to volatile market conditions, rising raw material costs and rising inflation.
One of the biggest uncertainties in the industry has to do with the cost and availability of raw materials. Shortages of raw materials, chemicals and spare parts have led to significant price increases in many regions and extended lead times. The increase in inflation has a huge impact on the industrial chain of daily life, because it increases the cost of the entire supply chain, including transportation, labor, etc. At the same time, the purchasing power of consumers is reduced, which puts a lot of pressure on production costs and sales prices.
As a result, tissue producers are under pressure to protect their profitability and seek efficiency through sustainability and digitalization.
When it comes to digitalization over the next 12 months, the key areas of focus are often related to production. When asked in which areas they would apply new technologies, a whopping 85 percent of respondents chose production. 57% chose maintenance and 52% chose energy, see Figure 2.
Profitability and efficiency have been at the center of the discussion for several years. In addition to production efficiency, there is also the topic of energy efficiency, which is even more prominent during the current European energy crisis. The global economy and current trends, especially in Europe, have an impact on profitability: energy prices, raw material availability and costs are the top concerns of respondents. The tissue industry is a low-margin industry, and cost fluctuations can have a direct impact on profitability.
Sustainability is a new theme compared to the two; Sustainability has been a hot topic globally in the past few years alone, especially in the tissue and board industry, which has been talking more around recently. While efficiency remains central to the focus, the goal pursued along with efficiency is sustainability.
Digitalization is a factor that contributes to greater efficiency and sustainability. However, if people and processes don't work together, no amount of digitization or new systems will help. People, tools and processes are linked together in a kind of "sacred trinity," and digitalization will only increase productivity and thus help factories and factories become more sustainable.
Energy efficiency is paramount
The two most important initiatives cited by respondents were energy related to sustainability and carbon footprint planned at tissue mill sites: capital investments in equipment that can be used to reduce plant emissions and on-site investments in green energy. Therefore, companies are expected to invest in energy efficiency in the coming years.
This is also demonstrated in a research survey that shows that the most critical investments involve new equipment to reduce energy consumption in production, on-site green energy, and on-site and steam generation equipment. As mentioned earlier, the gap analysis of this study also provided interesting results in terms of efficiency. There is a big gap between the importance of energy efficiency, logistics and supply chain efficiency, and production efficiency and current performance.
Since new equipment or refurbishment that reduces energy consumption in production is the largest area of investment, there are two key processes that can be used to improve energy efficiency: pressing and drying. Energy costs account for more than 30% of the total cost of the tissue industry, of which about 70% of energy costs are drying energy.
The focus of the investment is on improving press performance and press dewatering, which means less water evaporates in the drying section. Improved drying section operations, including Yankee drums, Yankee hoods and heat recovery, are key to maximizing energy efficiency. Quality control systems play an important role in organizing the manufacturing process, and accurate measurement is the basis for raw material and drying energy savings by reducing mass variability. All of these investments have proven to increase the operational capacity of machine lines and conversion lines.