Operating environment

Suominen is the global market leader in nonwovens for wipes, and among the largest spunlace nonwovens producers in the world. Our main market areas are Europe and North America. We also hold a strong position in the South American markets.

The global demand for nonwovens is growing continuously. The growth depends mainly on consumer demand, which is a combination of the general economic situation and consumers’ confidence in the development of their personal finances. However, the demand for fast-moving consumer goods – that is, end products for which most of Suominen’s products are used – is not very cyclical in nature.

COVID-19 pandemic continues to cause uncertainty

The operating environment continued to be highly marked by the COVID-19 pandemic in 2021. The key uncertainties related to the pandemic concern the health and safety of Suominen personnel and customers, possible shortages of raw materials and issues linked to logistics as well as potential closures of customers’ or our own plants due to virus infections or decisions by the authorities.

Throughout the pandemic, our primary focus has been in safeguarding the health and safety of our employees and to maintain business continuity. Nonwovens production has been classified as essential in fighting the pandemic in our operating areas where other business activities have been limited or shut down by the authorities. In 2021, we were able to run our operations with limited impact due to the strict safety procedures that were implemented in the beginning of the pandemic to minimize the risk of workplace infections.

In the first half of 2021 sales volumes continued on the record levels of 2020. Suddenly in the third quarter the volumes dropped temporarily due to overstocking in the supply chain followed by partial recovery in the fourth quarter. The demand picture in the beginning of 2022 continues to be volatile. The market expectation is that, in the long run, the end user demand for wipes will remain above pre-COVID-19 levels.

Demographic megatrends support our growth

Global megatrends shape our operating environment and affect our business. Megatrends such as population growth, growing global middle class, aging population, increasing consciousness of health and well-being and rising healthcare expenditure support our growth forecasts due to their impact on consumer behavior.

There is a direct correlation between the rise in the standard of living and, for example, demand for hygiene products. The rise in the standard of living combined with evolving lifestyles is reflected in the consumer behavior of the prospering middle class. In addition to essential commodities, the consumption of this demographic will center around solutions that make daily routines easier and less time-consuming. The use of household wipes and beauty care wipes are examples of this phenomenon.

With aging populations and changing healthcare models, new needs are emerging and the demand for nonwovens used in, for example, medical applications and incontinence products is increasing. On the other hand, the need to find cost-effective solutions to combat bacteria and viruses is also contributing to the increase in demand for nonwovens.

Sustainability is a key trend

Megatrends such as climate change and environmental degradation drive us to reduce the environmental impacts of our operations, innovate even sustainable products and improve our raw material efficiency.

The market for sustainable nonwovens is growing globally and especially in Europe and North America. Consumer behavior as well as legislation and regulations are driving the market towards more sustainable products.

In Europe, one of the most significant changes in the operating environment is the European Plastic Strategy and European Commission’s Single-Use Plastics Directive (SUPD). The directive aims to protect the environment and to reduce marine pollution. SUPD impacts end products made of nonwovens since many wet wipes are traditionally made, at least partially, of raw materials containing plastics. Labeling requirements under the Directive for products containing plastic entered into force in July 2021.

Initiatives similar to SUPD have emerged also in other regions as concerns over sewer blockages and marine pollution caused by, among other reasons, the inappropriate disposal of nonwoven products have been raised.

The need to develop more ecological and sustainable products is clear, and Suominen is well placed to respond to this demand.

Risks and uncertainties

Risks are categorized into strategic, operational, financial and hazard risks. Information about Suominen's non-financial risks and their management can also be found here.

Customers and key competitors

Our customer relationships last, on average, more than ten years and are typically based on 2–3-year-long framework agreements.