Surface & Panel Q4 2017 - Page 60

� CONTINUED FROM PAGE 58 to continue to serve in the best possible way. We will therefore increase our capacity in Europe by making the relevant investments. With appropriate streamlining of our existing production equipment, I expect that we can produce an additional 15,000 to 20,000 tons in the future. We will increase the efficiency and also the flexibility of our machines in all our production plants. For example, our PM1 in Unterkochen will have a headbox replacement that is equipped with the latest technology by the end of the year. Thus we improve the formation, which gives our customers a faster and more homogeneous paper impregnation. By the way, already in 2016, this machine has received a new drive, which improved the speed by 10 percent and thus resulted in 10 percent higher production. For next year, we plan to modernize the headboxes in our machines in Dettingen and Tolosa, allowing us to produce decor papers with a lower basis weight, which are currently required by the market. We are also analyzing the prospects offered by growth markets outside Europe. We have not yet decided on any particular location or time schedule, and we haven't yet defined what kind of invest- ment to make. We are analyzing the markets very precisely so that we can make the right decision at the right time. Q. Titanium dioxide is one of the main raw materials used in decor paper production. What are the main consequences of the last price increase announcement from titanium dioxide producers? Mix:  The situation regarding supplies of titanium dioxide and the related price increase is clearly a dominant topic. It affects the entire decor value chain that requires adjustments in our sales policy as well as in our production and supply chain management. Dr. Krull:  Following the last titanium dioxide shortage in 2010- 2011, there has been an increase in demand for “economy papers” with a reduced quantity of titanium dioxide. The objective was to minimize the costs for decor papers, which is only possible up to a certain physical limit. This limit has already been reached over the past few years. In the last several years, white decor papers have dominated the market. However, beginning in 2016, printers have started to play a more significant role again, bringing about a reversal in the trend, and they are including more colored and printed surfaces. Strong demand has led to growth in all sectors, in particular in pre-impregnated papers. This year, we are continuing to see a strong growth in all segments. Mix:  We currently find ourselves in an unusual situation in which supplies of the raw material TiO2 have become very low due to a high global demand. There are sufficient supplies to meet anticipated demand, but no more than that. As always, when demand outweighs supply, prices rise, and we have not been spared from this. Short supplies of TiO2, extremely high production demand on the paper machines and increasing costs of raw materials are far from the ideal scenario for all concerned. This will certainly trigger an artificially high demand for decor papers. This bubble is sure to burst in due course, as it did in 2010-2011. Q. How long do you think this situation will last? Mix:  It’s difficult to say. Unlike in 2010-2011, this time around the shortage of TiO2 is more about an increase in global demand. In addition, there have been some longer, unforeseen supply problems among a few TiO2 producers. As a whole, the situation poses a prob- lem for the industry because costs are rising dramatically for TiO2, and there are no alternatives. Over the last 12 to 15 months, we have had to deal with quarterly price increases in TiO2, which alone add between 100 – 15