A man with a fishing net

The royalty of tissue

Metsä Fibre’s expertise and high-quality pulp enable the competitive production of tissue paper for the growing Middle Eastern market. Accelerated paper production and lower costs – without compromising on the quality of the end product – are the key factors helping Queenex Hygiene Paper Manufacturing LLC (QHPM) develop into the fastest growing player in the region.
TEXT: IAN FENTON, PHOTO: VELHOT / VAIDA VAITK

The super absorbent towel in your kitchen or the soft and fragrant facial tissue in your hand is not just a branded representation of pulp and technology but also a complex mixture of commerce and legalities. The consumer paper and packaging industry – once considered a costly luxury in the Gulf Cooperation Council (GCC) countries of Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain, and Oman – has significantly risen from its humble beginnings to reveal a future of profitable returns. This is despite the fact that the GCC is comparatively modest in its paper production owing to the scarcity of water and fibre in the region. This phenomenal intensification over the last ten years can be attributed primarily to an increased inflow of population in the region, creating a demanding consumer base. Such an exponentially growing market has not only succeeded in drawing the attention of investors from around the globe but the trend has also led both local and regional players to expand their investments in an industry now valued at $500 million (Dh 1.83 billion) in the UAE alone.

The foundations for Queenex Hygiene Paper Manufacturing LLC (QHPM) were laid in 2010, when the project was initiated by current Deputy Chairman and partner Mr Mohamed Hamad Al Hajeri.

What began as the brainchild of Chairman and owner Mr Hamad Rashid Al Hajeri, in the form of a single company called Queenex Tissue Factory (QTF) in 1978, soon branched out into all the major paper-related areas such as the Queenex Corrugated Factory and the National Packaging and Printing establishment (NPP). Because of his interest and experience in the paper industry, and an uninhibited urge for strategic investment in paper production, QHPM grew into a limited company and started production by 2012.


Production line

 

GENERATING THE FIBRE OF SUCCESS

Stepping into hygiene paper production has proven profitable for QHPM, which is already manoeuvring to expand after only four years of business, having created a successful hold on the market.

“The tissue paper business is like white gold,” says Medhat Saleh, Plant Manager at QHPM. “Its demand will never stop or decrease anywhere in the world. Increasing populations and changing lifestyles that lay stress upon disposable hygiene products rather than their traditional alternatives, are the major contributors that will keep demand at an all-time high. Standing at a current production level of 28,000 metric tonnes of tissue paper per annum, our share in the UAE is still only 18 per cent, and in Saudi it is 6 per cent. We are also exporting hygiene paper to other countries such as South Africa and the UK. Although we are well ahead in our targets and amongst the market competition, when looking at the vast appetite of the market, we are hopeful and working towards acquiring an even greater market share, with a second production line being planned in the near future.”

Currently, with one production line with a design capacity of 30,000 metric tonnes of tissue paper per annum, QHPM has already spread its wings wide. “Demand and supply play a major role in this business. Saudi is the biggest supplier and also the largest consumer market in the GCC, followed by UAE, Kuwait and Qatar. Kuwait, for example, with its one paper mill equalling a production capacity of almost 1,000 tonnes a month has been importing about 4,000 tonnes of tissue paper per month,” explains Mr Saleh, highlighting the wide gap. This does not only ensure steady growth for the industry in the years to come, but also puts paper in the forefront as a viable candidate for boosting the non-oil industrial sector within the broader Gulf economy.

“We have positioned ourselves not only in the GCC market, but have also made our mark in the global competition,” he continues. “The company’s owner has been quick in investing in the best technology and highly skilled labour, which, combined with a flexible business strategy that allows us to jump from one target to another, has given us a substantial lead.”

Production line

QHPM aims to position itself in the supplier market as a superior quality paper manufacturer that can be trusted and graded by global standards. Mr Saleh is confident in his company’s approach to building a lasting impression on their customers, not just by creating and supplying a graded standard of high quality product but also by providing efficient after-sale and troubleshooting services. “We strive at all times to maintain the best relationships with our clients as well as our suppliers.”

The variety of hygiene paper being produced at QHPM requires several varieties of pulp. QHPM sources a large percentage of its raw materials from Metsä Fibre, working through its partner in the region, Ekman. Metsä is well represented in the UAE, where its high standards as regards quality are valued.

“We have been in an efficient relationship with Metsä Fibre, primarily through Ekman who is responsible for all our day to day dealings,” explains Mr Saleh. “Quality is a pivotal point for both of us, and that has made this relationship a very fruitful one.”

He indicates that the two companies may also collaborate in extending QHPM’s business into Europe in the near future. “Consistency in running the business, quality and customer support are the three attributes of Metsä Fibre that have resulted in our continued relationship with them.” An open channel for regular communication has worked greatly in cementing the bond and establishing trust. Having maintained a mutually profitable relationship for more than four years, QHPM and Metsä Fibre have good reason to look forward to successful future ventures, particularly in light of the increased capacity which the latter’s Äänekoski bioproduct mill will bring to bear upon the global markets.

Medhat Saleh, QHPM

WIPING OUT THE CHALLENGES

Mr Saleh is very clear on the drivers affecting QHPM’s business. “Pricing is one of many vital factors affecting the growth of GCC-based manufacturers,” he says. “This in itself is affected by many factors, including the political situation in some neighbouring countries, as well as market dynamics. Today’s customer is as conscious of price as he is of quality. And this makes it a very sensitive issue.” Mr Saleh does not hide his concern when looking at the open trading policy of UAE in the face of mega-producers such as China. “At times, other exporting countries push additional products into the country with much lower prices. It is then difficult for a local manufacturer to judge their actual position in the market. For the UAE’s own products to compete, some sort of government strategy protecting local producers is sorely needed, at least for some specific industries such as ours.”

QHPM is nevertheless hopeful of working out solutions to challenges such as this with support from Metsä Fibre and Ekman. To face such competitive prices from outside sources head on, the company is researching strategies to reduce costs at their end. “Raw material represents nearly 70 per cent of our total costs. It thus becomes very important to have Metsä Fibre’s advice to maximise the utilisation of the pulp we procure,” suggests Mr Saleh. By leveraging Metsä Fibre’s expertise in fibre production and processing, he believes it will be possible to develop more efficient paper production, reducing costs without compromising on the quality of the finished product.

“Despite the attendant challenges, we have all the ingredients to be the fastest-growing player in the region, and hopefully in the next few years, we will expand elsewhere also”, concludes Mr Saleh, striking a positive note that sounds entirely justified.


A straw hat
 

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