For a country of its size—and proximity to Germany and other large, mature markets—Poland may seem unlikely to support a nonwovens industry of global significance. Yet demand for nonwoven fabrics in Poland is comparable to that of more developed, populous countries like Italy and the UK, and the market is expected to grow at an above average rate of 3.2% per year through 2022.
So what is driving Poland’s nonwovens boom? A combination of factors.
Economic Growth & Expanding Export Markets Support Nonwovens Sales
Poland’s steadily expanding economy and domestic consumer base help to some extent. In October 2018, the London, U.K.-based Financial Times and Stock Exchange (FTSE) upgraded Poland’s credit rating to developed status, making it the first post-Soviet state to receive this distinction. Insofar as Polish consumers are benefiting from such growth, they are bound to buy more goods containing nonwovens—such as personal hygiene products and wipes—and to support industries (e.g., construction, manufacturing, and service industries) that use such goods.
However, foreign trade underlies much of the market’s growth, as Poland exports large volumes of personal hygiene products—such as infant diapers, feminine hygiene products and adult incontinence products—and wipes (e.g., baby wipes, household cleaning wipes, industrial wipers), the bulk of which go to:
• Czech Republic
In a highly globalized market for personal hygiene products, wipes and other goods containing nonwovens—including construction materials, filter media, medical/surgical supplies, and motor vehicles—Poland is poised to post further gains, providing ample opportunity for nonwovens suppliers
Bright Prospects Attract Hefty International Investment
Major global producers of personal hygiene end-use products have invested significantly in Poland:
• Procter & Gamble operates a plant in Warsaw that produces 1,000 Pampers diapers per minute and supplies 37 national markets.
• Ontex opened a new production plant in Radomsko to supplement its Warsaw sales office. The new facility currently has only one production line but is expected to have a total of four lines fully operational by 2020.
Poland is also home to TZMO, which is the largest locally owned manufacturer of personal hygiene products, wipes, and medical/surgical supplies in the country:
• TZMO is a market leader not only in Poland, but also in nearby countries such as Russia.
• Even in Germany—which has its own, well established industrial base for nonwovens-based goods—TZMO has a 22% market share in the fast-growing adult incontinence market.
• Now, TZMO is looking to penetrate the competitive US market and the rapidly growing Indian market.
Other notable producers of nonwovens-based goods in Poland include Hygienika Dystrybucja—which produces personal hygiene products and wipes—and EcoWipes, a wipes manufacturer that recently installed a new spunlace production line.
Domestic Producers Win on Low Labor Costs & High-Quality Products—For Now
As its recently upgraded FTSE rating indicates, Poland is in a state of economic transition, simultaneously benefiting from having the low labor costs of a developing market—which reduce overall production costs—and the high product quality more typical of a developed nation.
Accordingly, Polish producers of nonwovens-based goods are able to compete effectively on the basis of quality as well as price. TZMO’s brands are clearly thriving, and P&G’s globally recognized brands have reputations to uphold. (Although Ontex’s Radomsko operations will focus on supplying private label products, the company’s store-brand products are likely to be of decent quality, too, given its reputation as a global market leader.)
As Poland’s economy develops, however, labor costs will likely rise and, with them, so will production expenses. In fact, the Polish government has proposed to increase the minimum wage by 7% in 2019, which could crimp growth somewhat. Furthermore, advances in the Polish nonwovens market through 2022 are expected to decelerate considerably from the previous decade as the market gains maturity.
Local Production Shortage Presents Opportunities
While the Polish market for nonwovens-based end-use products is already pretty well established, the country maintains a trade deficit for nonwoven materials that totaled nearly 100,000 metric tons in 2017. Despite the substantial growth end-use industries have seen in the last two decades, the nonwovens industry hasn’t quite caught up, causing end-use product manufacturers to rely heavily on imported materials to meet production needs. While many of these imports come from neighboring countries such as Germany, the Czech Republic, and Sweden, significant volumes are shipped from more far-flung places—including China, France, and Italy—with the added transport costs likely to either raise the price of the finished product or to lead manufacturers to use lower-quality material to compensate.
The trade deficit therefore presents an opportunity for nonwovens producers to build new production lines in Poland. With several thriving manufacturers of end-use products based locally, there is plenty of demand for low-cost, high-quality nonwoven fabrics. Furthermore, Poland’s access to major markets throughout Europe—including other EU member states and its own growing consumer base—makes it a key strategic location for multinational suppliers.
Nonwovens suppliers are beginning to mobilize. In August 2018, Texsus announced a €30 million investment in the construction of a new manufacturing facility for nonwovens used in personal hygiene products, which is expected to go online in the first quarter of 2020. Nevertheless, the trade deficit is expected to remain high through 2022, leaving ample opportunity for further investment.
To Learn More
For more insight into the global nonwovens market, see Global Nonwovens by The Freedonia Group. And for coverage of the U.S. market for nonwovens and wipes, see Nonwovens Market in the US, Wipes Market in the U.S. These comprehensive reports provide the following:
• historical demand data and forecasts
• analysis of trends affecting market outlooks
• industry structure and composition
• company market share
The Freedonia Group is a leading international industrial research company publishing more than 100 studies annually. Since 1985, we have provided research to customers ranging in size from global conglomerates to one-person consulting firms. More than 90% of the industrial companies in the Fortune 500 use Freedoni.