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TRENDS, CHALLENGES AND FUTURE OPPORTUNITIES IN RETAIL CONSUMER TISSUE IN THE MIDDLE EAST

TISSUE WORLD ISTANBUL, SEPTEMBER 2016

http://www.euromonitor.com/

© Euromonitor International

2OUR RESEARCH NETWORK



3

WHAT IS THE GLOBAL UNMET MARKET POTENTIAL FOR THE TISSUE

INDUSTRY?

INDUSTRY FORECAST MODEL



4INDUSTRY FORECAST MODEL

Significant unmet retail volume potential globally - at estimated around 10 million tonnes - creates opportunities for further industry development

Source: Euromonitor International Industry Forecast Model

Over 2015-2020, retail sales of consumer tissue are expected to grow by 3% CAGR in constant valueGDP growth and habit persistence will be among the key drivers of future growth



5POSITIVE GROWTH GLOBALLY OVER THE REVIEW PERIOD

Worl

d

Asia P

acific

North A

merica

Wes

tern E

urope

Latin

Ameri

ca

Middle

East a

nd A

frica

Easter

n Euro

pe

Austra

lasia

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

-1

0

1

2

3

4

5

2010 2015 2010-2015 % CAGR Growth

Retail tissue, US$, constant value rsp, 2015 fixed exchange rateU

S$ m

illio

n

% C

AG

R G

row

th

Positive growth globally, at 2% CAGR in constant value Asia Pacific, led by China, records the fastest growth and by 2015 leads in absolute value

US$3.5 Billion

US$72 Billion

US$22 Billion



6UNITED ARAB EMIRATES – ECONOMIC OVERVIEW

UAE

Real GDP Growth: 3.15% in 2015

Only 11% of the total population are UAE

nationals

Population: 9.16 Million



7UNITED ARAB EMIRATES – MARKET ANALYSIS

UAE

Three Factory Mills across the UAE160,000 tonnes(Total Production, Including Exports & AFH)

US$270 Million

Retail Tissue Total Value for 2015

YoY Growth

7%

Population Growth & Influx of ExpatriatesRise in Disposable IncomeRise in Production & Freight CostsAverage Increase in Unit Prices



8UNITED ARAB EMIRATES – MARKET ANALYSIS

UAE

Toilet Paper

Facial Tissues

Paper Towels

20%

70%

8%

Retail Tissue Split – 2015

Paper Tableware

2%

&Lifestyle & Multi-Purpose Usage

In-store Promotions

VS. Premiumisati

on

Sustainability



9UNITED ARAB EMIRATES – COMPETITIVE ANALYSIS

UAE

16.4% 16%

13%



10SAUDI ARABIA – ECONOMIC OVERVIEW

Saudi Arabia


Accounts For Around 90% of Export Earnings, 80% of Budget

Revenues, and 45% of GDP

Saudi Arabia Vision 2030



11SAUDI ARABIA – MARKET ANALYSIS

Saudi Arabia

Two Factory Mills across the KSA160,000 tonnes (Total Production, Including Exports & AFH)

US$508 Million Retail Tissue Total Value for 2015

YoY Growth

9%

The expansion of modern grocery retailersIncrease of health and hygiene awareness



12SAUDI ARABIA– MARKET ANALYSIS

Saudi Arabia

Toilet PaperFacial

Tissues

Paper Towels

10%

71%

13%


Paper Tableware

6%

Bigger Bulk PurchasesWomen

Engagement Haj Time



13SAUDI ARABIA– COMPETITIVE ANALYSIS

Saudi Arabia



14GCC REGION



15EGYPT – ECONOMIC OVERVIEW

Egypt


Egypt is the most populous country in the Middle East

with population reaching 90 Million in 2015

Per capita consumption of retail tissue in the country stands at less than 1 kg



16EGYPT – MARKET OVERVIEW

Egypt

Facial Tissues

Toilet Paper

55% 40%

YoY Growth 2015

11%

Foreign Investment

Tourism Revenues

Devaluation of EGP

Inflation

Egypt, Retail Tissue Volume, tonnes, % Year-on-year Growth

Paper Towels

Paper Tableware

4% 1%



17EGYPT – MARKET OVERVIEW

Egypt

Among the top 10 tissue exporters in the World

Seven Factory Mills across Egypt250,000 tonnes

(Total Production, Including Exports & AFH)

Raw MaterialsPrice Conscious

Smaller Packs



18EGYPT – COMPETITIVE ANALYSIS

Egypt



19IRAN – ECONOMIC OVERVIEW

IRAN


2nd most populous Country in the Middle East

2nd Largest Economy in the Middle East

Per Capita Consumption for retail tissue is just at 1.7 Kg



20IRAN – MARKET ANALYSIS

Iran

US$645 Million Retail Tissue Total Value for 2015

YoY Growth

14%

Six Factory Mills across Iran191,000 tonnes

(Total Production, Including Exports & AFH)

Rapid Urbanization

Convenience Awareness

Price Sensitive ConsumersHigh Income consumers & Kitchen towels

Retail distribution development



21IRAN – COMPETITIVE ANALYSIS

Iran

Pars Crepe Co Khorasan Paper Product Co

Is the competitive landscape going to change?

“It’s a good day for the world!” When? How?



22

Iran

Saudi Arabia

United Arab Emirates

Egypt

Morocco

Kenya

Nigeria

Cameroon

Tunisia

South Africa

Israel

Algeria

-2 0 2 4 6 8 10 12

MEA region*, US$, constant value % CAGR growth, 2015-2020

* Euromonitor MEA region full research coverage includes the 12 markets on the chart

FUTURE OF THE MIDDLE EAST

Saudi Arabia

United Arab Emirates

Iran

Egypt



23



24

10%

11%

12%

13%

14%

15%

16%

17%

18%

19%

20%

2010 2011 2012 2013 2014 2015

Retail Tissue Sales in Turkey – 2010-2015,TRY current value

Value Sales YOY Growth

YO

Y g

row

th %

RETAIL TISSUE REGISTERS DOUBLE-DIGIT GROWTH IN LOCAL CURRENCY TERMS

1.9 Bln

The significant growth in TRY terms largely rely on the strong rise in the average unit prices

A marked decline is observed in retail tissue in 2015 when retail sales in current US$ is taken into consideration

2010 2011 2012 2013 2014 2015

-15%

-10%

-5%

0%

5%

10%

15%

20%

-8,8%

% YOY growthUS$ current value



25VOLUME SALES OF RETAIL TISSUE SLOWS DOWN AS INCOME LEVEL STAGNATES

2010 2011 2012 2013 2014 20150

50

100

150

200

250

300

350

400

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

326,47

Retail Tissue Sales in Turkey - 2010-2015,Volume, thousand tonnes

Volume Sales YOY Growth

Thousand tonnes YO

Y g

row

th %

Growth in volume sales slows down in accordance with the stagnation in the overall consumer income level

2010 2011 2012 2013 2014 20152%

3%

4%

5%

6%

7%

8%

9%

10%

GDP Measured at Purchasing Power Parity in Turkey - in-ternational dollar Per Capita



26POSITIVE VOLUME GROWTH CONTINUES DESPITE NEGATIVE ECONOMIC OUTLOOK

Rapid Urbanisation Modern Grocery Retailers

Although consumers’ income level stagnates, positive growth in volume sales of retail tissue continues



27RAPID URBANISATION HAS A REMARKABLE IMPACT ON TISSUE CONSUMPTION

2010

2011

2012

2013

2014

2015

0

9,000

18,000

27,000

36,000

45,000

54,000 50,538.2055,843.90

22,023.10 21,852.00

Urban vs. Rural Population in Turkey‘000 persons

Urban Population Rural population

Share of Urban Population in Turkey

2010 vs. 2015

71.9%2015

69.6%2010

Urban Rural

Urbanisation leads increasing per capita retail tissue consumption



28WIDESPREAD OF MODERN GROCERY RETAILERS DRIVES VOLUME SALES

2006 2007 2008 2009 2010 2011 2012 2013 2014 20155,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

18.325

39.703

Number of modern grocery retailers in TurkeyOutlets Number of grocery retailers

% YOY Growth

Rapid widespread of modern grocery retailers, in particular discounters, postively affected per capita consumption of retail tissue in Turkey



29THE GROWTH TREND IN PER CAPITA CONSUMPTION IS PROMISING

2006 2007 2008 2009 2010 2011 2012 2013 2014 20152.5

3.5

4.5

5.5

6.5

7.5

8.5

2.573.37

4.2

8.43 8.6 8.68

Retail Tissue - Per capita consumption in Turkeykg per Persons (Total Population)

Per capita consumption in Turkey

Per capita consumption in Western Europe

Per capita consumption demonstrated healthy growth in Turkey, but still barely exceeds the half of Western Europe averageWhich is why, retail tissue in Turkey harbors significant potential for further growth



30POSITIVE GROWTH IS SET TO CONTINUE OVER THE FORECAST PERIOD

2015 2016 2017 2018 2019 2020150

200

250

300

350

400

450

0%

1%

2%

3%

4%

5%

6%

326.47

395.81

Retail Tissue Sales in Turkey - 2015-2020,Volume, thousand tonnes

Volume sales % YOY Growth

2015 2016 2017 2018 2019 20203.53.73.94.14.34.54.74.95.15.35.5

4.2

4.85

Retail Tissue - Per capita consumption in Turkey, 2015-2020

kg per Persons (Total Population)

Per capita consumption in Turkey

The gap between per capita retail tissue consumption in Turkey and per capita consumption in Western Europe

will continue to become narrow

Expected per capita consumption in Western Europe in 2020

8,90 kg



31TOILET PAPERS IS THE MOST COMMON TISSUE TYPE IN TURKEY

Toilet PaperFacial

Tissues

Paper Towels

66.5%

2.4%

19.4%


Paper Tableware

11.7%Toilet paper is commonly used across the country, particularly by consumers living in urban areas

Popularity of paper towels remarkably increases as the product is used by consumers for a variety of purposes such as; as disposable hand and face towels in bathrooms, to soak up the extra oil of fried food, to clean desks’ and tables’ surfaces, etc.



32VAST MAJORITY OF TOILET PAPER USERS ALSO USE WATER DURING CLEANSING

Absorbency level of toilet paper is a key purchasing decision factor for consumers in Turkey



33FUTURE OF RETAIL TISSUE IN TURKEY


THANK YOU FOR LISTENINGAhmed BakrResearch AnalystEuromonitor InternationalDubai+971 4 372 4363E-mail: [email protected]

Caglar AtunelResearch AnalystEuromonitor InternationalIstanbul

E-mail:[email protected]

mailto:[email protected]




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