Canada's biggest maker of paper towel concerned about supply amid COVID-19

The head of Canada's largest manufacturer of tissue products says he's concerned about the industry's supply of paper towel ahead of a potential second wave of COVID-19.

Kruger Products CEO Dino Bianco said demand for paper towel has soared as people stay at home and clean more frequently.

"Toilet paper was the highlight of the COVID stay-at-home mandates but now we're seeing the big use of paper towels," he said in an interview.

"COVID doesn't make you go to the bathroom more, but it does make you clean more."

Bianco said the industry's paper towel inventory is "very tight" across North America, despite efforts to build up supply.

"Paper towel is the big watch out for us," he added. "We're trying to build our inventory but we're very tight."

Kruger, which makes SpongeTowels paper towels, isn't the only tissue manufacturer seeing continued strong paper towel sales.

Geraldine Huse, president of Procter & Gamble Canada, said demand for the company's tissue products, including Charmin toilet paper and Bounty paper towels, increased significantly in mid-March.

But while toilet paper consumption has returned to normal levels, she said paper towel sales continue to outpace pre-COVID levels.

"Consumer demand for paper towels remains high across Canada as consumers are staying at home more and their cleaning and hygiene habits have increased," Huse said in an emailed statement.

She said the company expects strong sales of cleaning products, including its paper towel, home cleaners and dishwashing liquid, to continue in the coming months and that P&G is "producing and shipping 24/7 to meet demands."

Tim Baade, senior vice-president and general manager of Irving Consumer Products, agreed that demand for toilet paper has started to level off while paper towel usage remains strong.

"Demand for our towel has remained high," he said in an emailed statement. "Bath demand is still up from pre-COVID-19 levels, but lower than its peak earlier this year."

Baade said the company, which makes Royale paper towel and other brands under store "house brands" and private labels, continues to maximize its production to help mitigate any supply gaps.

Meanwhile, Kruger is pushing to open its new plant in Sherbrooke, Que., to add more capacity in Canada, Bianco said.

Initially slated to open in February 2021, he said the company is trying to get the factory up and running faster. Some machines started over the summer, while more are set to come online next month.

Bianco said the plant will increase the company's paper towel and toilet paper manufacturing capacity by 20 per cent.

For now, Kruger has cut back on its stock keeping units — or SKUs — to maximize its production of key products.

At the height of the pandemic, the company slashed the number of products it makes in half to about 90, down from 180 key products. The company is back up to about 110 items, Bianco said.

There will be plenty of the company's Cashmere brand toilet paper, for example, but the recycled sub-brand EnviroCare will be harder to come by.

That's in part because it's less popular, he said, but also because of issues with the supply of the raw product — recycled paper.

"We use recycled paper that comes from white paper used in offices," Bianco said. "That market has dried up because people aren't in offices printing, so it's hard to get the recycled fibers used to produced recycled tissue."