Following decades of low consumption, demand for tissue is now greater than supply. SCA’s growth figures in the country in recent years have been double-digit.
The Russian economy is growing at a breakneck pace, despite the enormous gaps between metropolitan and rural standards of living. Surveys show that Moscow residents spend twice as much of their disposable income on consumption compared with Parisians and Londoners.
Surprisingly low consumption
In one area however, the purchase level is surprisingly low. The average Russian consumes about 1.6 kilograms of tissue annually. This compares with the average American who consumes about 21 kilograms annually.
“There is a clear correlation between GDP and consumption of tissue. But even with a less-developed economy factored in, there is a considerable lag behind other countries. In Poland, for example, three times as much tissue is used,” says Urban Lundberg, who is responsible for SCA Tissues expansion in eastern countries.
Wellknown Zewa brand
SCA is presently number one in tissue in Russia with 40% of the market in the 23 largest cities. The Zewa brand is recognized by 90% of Russian consumers.
“In addition to achieving a high growth rate, we have also achieved high value growth – which means that customers are not only buying more, but also more expensive paper,” says Timofei Sokolenko, who heads SCA’s tissue division in Russia.
Demand today is greater than production, and SCA is presently planning a new plant near Moscow. It will be the company’s largest investment to date in Russia.