As expected, Hungary's leading hygiene paper manufacturer Vajda-Papír achieved outstanding results in the first half of the year. Attila Vajda, founder-CEO of Vajda-Papír Kft., explained the growth by the increasing demand, the company's growing efficiency and continuous innovations, including the strengthening of the away-from-home business, as well as the decrease in energy and raw material prices. Vajda-Papír sold 12.5% more products than a year earlier and managed to reduce the average gross selling price of its products by 10%.

In the first half of 2023, the annual net sales of Vajda-Papír Kft. amounted to more than EUR 74.4 million, while at the consolidated level it was EUR 69 million. At the end of last year, net sales amounted to EUR 135.9 million, compared to EUR 55 million at the end of the first half of the year and EUR 47.7 million on a consolidated basis, said Attila Vajda, founding CEO of Vajda-Papír, presenting the key results of the report published on the Budapest Stock Exchange. Based on the first half of the year, we expect a double-digit increase in the volume of products sold this year and a 15% increase in sales revenue, he added.  Consolidated profit before tax for the first half of 2023 was EUR 4.3 million. EBITDA for the period increased to EUR 7.6 million from EUR 53.8 thousand in the same period last year.

The Managing Director of Vajda-Papír recalled that in 2022, the Vajda-Papír Group doubled its turnover at group level in both its domestic and Norwegian mills. Last year, the turnover of Hungary's leading hygiene paper group grew tremendously, with a total turnover of more than EUR 205 million, and that of the Norwegian subsidiary close to EUR 51 million.

Regarding the current year, Attila Vajda commented that retail sales, including the demand for hygiene paper products, increased in the first half of 2023 in Vajda-Papír's sales markets. The company sold almost 26,000 tonnes (25,992 tonnes) of finished goods in the first six months of the year, 12.5% more than a year earlier. The average gross selling price of products sold fell by 10% compared to 2022. This resulted in a 34% increase in sales on the domestic market, while export sales were 38% higher than a year earlier.

The Managing Director of Vajda-Papír recalled that the average purchase price of hygiene base paper, which accounts for 65-70% of the company's costs, started to increase on the global market in 2021 and continued to rise in the first half of 2022. The global cellulose price started to decrease in the last quarter of 2022 and seems to stabilise in 2023, resulting in a 35-40% lower cost of production of base paper at the end of the first half of 2023 compared to a year earlier.

Attila Vajda reminded that the past year has presented the management with numerous challenges, including the significant increase in the price of raw materials and the collapse of energy prices, and noted that the management has developed solutions to mitigate these problems in the spirit of sustainability. They have increased the use of green technology and renewable energy, recycled 100% of paper converting waste and reduced water use. This has helped to moderate the impact of rocketing energy prices, and the consequences of rising cellulose prices have been limited by increasing the production of its own base paper. Attila Vajda emphasised that over the past 10 years, some EUR 102.5 million has been invested to ensure that the production of tissue paper and the operation of the company are based on the most environmentally friendly and sustainable technologies. And in their Environmental, Social Responsibility and Governance (ESG) report, the first of its kind among industrial manufacturing companies to be published, they have pledged to further reduce their water consumption by 20% by 2030, increase their use of renewable energy by 50% and become carbon neutral by 2050.

The investment in the hygiene base paper production plant was launched in the second quarter of 2017 in Dunaföldvár, with production starting at the end of 2018, when it provided 50% of the company's base paper consumption. Attila Vajda pointed out that companies that are successful in the industry in the long term operate in an integrated production structure, which means the production and processing of base paper within a group of companies. This is why they decided to invest in a new paper machine. In 2022, a 41 million EUR investment phase doubled the capacity of the base paper production line and expanded the plant area; thanks to the new paper machine, Europe's largest production capacity for hygienic paper was created in Dunaföldvár and the group's entire base paper requirements can be produced in their own plant. This natural hedge will reduce the impact of the rising cost of base paper, the founder-CEO pointed out. In 2022, to make better use of the paper machine's larger capacity, a new converting machine will also be installed in Dunaföldvár, close to the base paper supply, which will mean significant savings in transport costs and a more sustainable operation.

The company's more than two decades of economic and professional achievements, as well as its high-quality products have been recognized with numerous awards (Pegazus, Hungarian Brands, Product of the Year awards).The Ooops! brand, born in 2011, is now a well-known and popular hygiene paper product among Hungarian consumers, and the market leader in the kitchen paper towel segment, said the CEO, adding that one of the company's important goals is to further strengthen the position of the brands, in addition to product and process innovation. As an example of product innovation, he cited the strengthening of the consumer business. "The entry into the away-from-home market has created a new opportunity for Vajda-Papír Ltd. to increase turnover and improve efficiency, both by developing and selling a completely new range and by exploiting the synergies between retail and retail products," he said. The away-from-home paper market segment is worth around EUR 10 billion worldwide and almost EUR 3 billion in Europe. In Hungary, the estimated value of away-from-home segment's sales of toilet paper and hand towels is EUR 32 million, Attila Vajda said. To exploit the market opportunities, Vajda-Papír Ltd. has expanded its portfolio in recent years with a professional range of cleaning products in addition to hygiene paper products. In this way, it can take advantage of several market benefits: it can increase its turnover per customer and improve its profitability by supplying both product lines together, which results in specific freight cost savings in the long run, he explained. He noted that the professional chemical range covers the full range of cleaning products, from simple window cleaners to premium quality concentrates and disinfectants. And the complex service of offering customers a complete range of paper and cleaning products is a significant market advantage," he underlined.

Vajda-Papír is a leading manufacturer in the market of hygiene paper products, and its annual production capacity of 150 thousand tons more than covers the Hungarian demand, thus creating the ability of self-sufficiency in this field, which is becoming increasingly valuable - emphasized Attila Vajda. He added that the management's goal is to further strengthen the company's position, increase competitiveness and exploit the significant market potential. As an example, he said that the consumption of household hygiene paper is strongly linked to the development of GDP. In Hungary, the Czech Republic, Slovakia, Poland, Romania, which are important markets for Vajda-Papír Ltd., the average annual per capita consumption of sanitary paper products is still below the consumption of sanitary paper in the United States and Western Europe. While in the US and Western Europe the per capita consumption is around 13-14 kg, the average domestic consumer uses only 60-65% (around 8 kg) of this amount per year. Similar average consumption of 8 kg per year is found in the Czech Republic, Slovakia and Poland, but Romania is even further behind, with per capita consumption of 4-4.5 kg per year, which is only around 30% of the Western European average. The Hungarian household paper market consumes around 90 thousand tonnes per year, with a turnover of around HUF 80 billion per year. Last year, the market grew by 41% in value terms, but declined by 6% in volume terms due to inflation and slowing economic growth, but demand is expected to grow this year," said Attila Vajda.