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Sitting Pretty



hygiene component suppliers prepare for pricing let-up



By Ellen Wuagneux
Associate Editor




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57.8 million. This is the number of baby boomers (those born between 1946 and 1964) expected to be living in 2030, according to U.S. Census Bureau projections. That year, these boomers will be between ages 66 and 84 and nearly 55% will be female. Census figures also indicate that more than four million people will turn 50 in 2008. For makers of hygiene products, especially sanitary protection and adult incontinence items, these figures sound pretty good.

There’s good news in the baby diaper market as well: a record number of babies were born in the U.S. in 2007, according to the National Center for Health Statistics, signaling an impending baby “boomlet.” The 4.3 million recorded births in 2007—the highest since 1957—give just a glimpse of what’s ahead in the nursery and point to upcoming steady sales of baby diapers, training pants and swim diapers.

As if that weren’t enough, even more immediate happy news is coming from raw material markets where major Middle East capacity is set to come onstream for polyester and polypropylene. After hitting an all-time peak, resin prices are expected to see a substantial correction in the first quarter of 2009 and have already fallen by double digits on a per-pound basis. Needless to say, this relief is a welcome change for makers of both nonwovens- and film-based hygiene components who have been maxed out on cost structure and squeezed on all sides to deliver innovation at the same or lower prices despite record raw material costs.

The raw material squeeze has been so severe, some suppliers say, that innovation has been nearly impossible. “The market is full of entrepreneurs but in reality few companies are innovating or investing capital in new technologies,” said Pantex International CEO Jim Cree. “I think everyone is scared to add new technology without a clear signal because raw material prices have driven value out of the market.”