Sofidel: The Making of a Tissue Industry Giant

MARK RUSHTON

Tissue360° interviewed Luigi Lazzareschi, CEO of Sofidel, a rapidly expanding leader in the global tissue industry. Here he discusses the company’s dynamic growth and the challenges it faces in key markets, including the US, Europe, and the United Kingdom. This version of the interview was first published in Paper360°'s Nov/Dec issue and is being excerpted here for Ahead of the Curve readers as a special "sneak peek."

Tissue360^°:  Sofidel has seen phenomenal growth in the US. Can you give us an update on your US operations as they are now?

Lazzareschi: Sofidel continues to focus on strategic growth in North America; recently we finalized the acquisition of the assets of Royal Paper, creating Sofidel Royal, LLC. 

With this acquisition, four new facilities are now part of Sofidel America’s production footprint: three in Arizona—the Gila Bend paper mill (with an annual production capacity of 61,000 metric tons) and two converting facilities in Phoenix; and one in South Carolina—the converting facility in Duncan. This move will further strengthen our ability to meet customer needs with a strong presence in the Western United States and lay even stronger foundations for continued growth.

Sofidel now operates a total of 14 facilities across the US, a market that already accounts for 50 percent of our group’s total revenue and one where we expect significant growth, particularly in the rapidly expanding Private Label segment. At the moment, our US production capacity is 813,000 metric tpy. An additional 70,000 metric tons will be added with the third paper machine in Circleville, OH, which recently started up. Our US production capacity will reach 883,000 metric tons and the Group’s overall capacity will be 1,983,000 metric tpy.

Could you provide an update on the progress of these operations and their current stages within the Sofidel strategy?

Our main focus right now is integrating the new facilities. I'm referring to both the former Clearwater facilities and the former Royal Paper facilities. As our previous experience in Europe has taught us, this process is never simple, and we can never take anything for granted. We need to stay alert and move carefully, step by step.

What’s certain, however, is that we can rely on the strong expertise and professionalism of our new American colleagues, who are working with great dedication and commitment. Their backing is something we truly value.

Are there any challenges for Sofidel's US operations in terms of tariffs? Any other challenges with such fast growth in the US? 

Since January 2025 there has been much confusion generated by the impact and uncertainty of tariffs on both imported and finished goods—for example, I’m thinking of a lot of industry technology that’s produced outside the US—and raw materials. It's an uncertainty that weighs heavily. However, as we speak, there are signs of possible agreements for a compromise that, I believe, could primarily protect end consumers from potential price increases.

As for other potential challenges we need to face, I see two in particular. I've already mentioned the first: the integration process. Another key challenge is growth; it brings risks along with it. Becoming the fourth largest manufacturer in North America means that our competitors will spend more attention monitoring Sofidel. Growth isn’t just about increasing production capacity and revenue; it also means greater responsibility. As the scale increases, so do the responsibilities.

Can you talk about sustainability factors and opportunities in the US?

Even though there may be different perspectives and regulatory approaches on the two sides of the Atlantic regarding the urgency of addressing the ecological transition, the paper industry is energy-intensive, and even given the instability of the global scenario, the energy transition is not just an option, it’s a necessity. In Europe we are implementing a multi-option strategy that, with realism and pragmatism, aims to adapt to the technological, regulatory, infrastructural, and climate conditions of the countries where we operate.

We’re starting to do something similar in the United States as well. For example, on the roof of the building we recently constructed in Circleville, OH, we’re installing a photovoltaic system. Along with having high-performing production assets and locating our facilities close to our markets to reduce transportation needs, sustainability remains a key strategic asset for improving our performance.

What about sustainability in your European operations? Any major challenges with energy or raw material supply?

Across Europe, we’re implementing a range of initiatives, including several focused on installing photovoltaic systems to generate renewable energy directly at our facilities. These projects are underway in locations such as Kisa (Sweden), Roanne (France), Arneburg (Germany), and Călărași (Romania), with a similar project also being developed in Italy. In addition, we are advancing two major biomass energy projects: one in Frouard, France; and another in Baglan, UK.

In the UK I’d also like to highlight our involvement in East Midlands Hydrogen, an industrial partnership that includes 44 entities, including producers, distributors, and users, which works to accelerate development and attract investments aimed at using hydrogen. All of these efforts reflect Sofidel’s strong commitment to achieving Net Zero by 2050. More initiatives are on the way. Of course, we must not forget responsible procurement, with the goal of sourcing 100 percent of our pulp from FSC or PEFC certified sources.

Let's talk about technology. How do digitalization and AI feature in Sofidel’s operations?

The digital transformation at Sofidel began in production many years ago. The Sofidel Supervision System, our Manufacturing Execution System (MES), monitors the production process in the converting departments both at the production site level and at a global level with an overview of all Sofidel Group's manufacturing plants.

Concerning product quality, we are already using automatic systems based on digital solutions. Artificial Intelligence vision cameras support the continuous control of finished products and enhance the production process to guarantee the maximum performance of our products.

We’ve also invested in automated warehouses at our facilities in Ciechanów, Poland, and Kisa, Sweden; as well as in Circleville, OH. Additionally, we’re constructing a new automated warehouse in Duluth, MN, as part of a broader production expansion project that will add converting lines to the existing paper mill.

In this context, it’s worth highlighting that Sofidel was also one of the first companies in the tissue industry to embrace online commerce. Today, approximately eight percent of our total consumer sales in Europe come from the e-commerce channel, which continues to show strong year-over-year growth.

We're also placing a strong focus on data analysis. The powerful computing capabilities available today allow us to invest in what's known as “software-based sensing”—sensors that don't directly measure a variable but instead determine it indirectly using algorithms that process a range of other physical measurements. It's an interesting field that can significantly enhance both product quality and plant efficiency.

Is there anything you can say to suppliers about what tissue mills need in the future when it comes to new technologies?

Yes, I suppose it’s a kind of... wishful thinking: having access to technologies that keep improving in product quality and environmental impact, while using less and less energy. But I believe that, for them, this is nothing new.