Paolo Di Spigna Metsä Fibre S.r.l.’s Managing Director, Sales Italy
 
 
 
 
 

Market review: The ties that bind

​Certain historical factors still govern the market for pulp in Italy, including companies’ family ownership and strong regional roots. However, the country’s paper makers must also face up to the reality of global competition to ensure their future prosperity.

11/2016 TEXT: IAN FENTON, PHOTOS: VELHOT / MICHELE SEGHIERI & METSÄ FIBRE

​One crucial difference about the paper business in Italy, explains Paolo Di Spigna, Metsä Fibre S.r.l.’s Managing Director, Sales in the country, is the importance of family.

“As much as 95 per cent of the companies we deal with here are family-owned and family-run businesses,” he tells us. “And it’s easy to point to certain general characteristics that set them apart from others.”

First, he explains, family business owners are tough people. “Negotiations are more difficult, which is perfectly understandable, as every cent is coming out of their own pockets.”

Lucca, Italy 

But this toughness has a silver lining: “There are no grey areas. You know exactly what their aims are, what they are interested in, and what they expect from us.”

In a supplier-customer relationship, this is no small advantage. “You are dealing with the owners, so nothing strange or unexpected comes up,” Di Spigna continues.  “All that matters is the quality of the product, the service you provide, and then the price. The focus is on the basic ingredients of being a good supplier, so naturally our confidence in our own product is a great foundation.”

The resilience of paper

The Italian economy has lost around a third of its industrial base in an ongoing recession. But even against such an uninspiring economic backdrop, Di Spigna sees remarkable signs of resilience in the country’s paper producers, which make up Metsä Fibre’s customer base.

“While there have been real challenges in the printing-and-writing category, our biggest customers are still there, weathering the storm,” he says. “On the other hand, specialty paper makers have done quite well in the last few years, with those with strong export businesses turning reasonable profits.”

But on the topic of tissue, Di Spigna sees even more potential, provided the industry can overcome certain challenges.

Lucca, Italy
 

“The Lucca area in Tuscany is a major centre for tissue production,” he explains, “with many areas of specialization having developed around the industry.”

In addition to the importance of family heritage to the Italian market, regional history is another crucial topic. Where one locality may be famous for leather production, another will stand out for the pedigree of its glass workshops. In Lucca, tissue paper is one such area of excellence.

“Here, in addition to our tissue-maker customers, you will find companies making machinery, converting equipment, and everything imaginable relating to tissue production. It’s a true eco system, comparable to the one developing around our Äänekoski mill in Finland, in a sense.”

Too much of a good thing

But where the conditions for paper-making are excellent, the danger of overcapacity can emerge, and as Di Spigna points out, this has been an issue in Italy for some time. “1.5 million tonnes of tissue paper are produced annually in this country,” he says. “A colossal amount.”

“The tissue makers who have been able to grow depend on exports, and sell in the UK, Spain and Germany, for example. But with other countries also turning to the export market, competition here has been fierce.”

Could there be a future in consolidation, Di Spigna speculates, with the various producers pooling their resources to make production more efficient, reduce overheads, and establish more focus upon their chosen markets? Only time will tell, but in this incredibly resilient market of tough, disciplined players, there may yet be surprises in store.

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