Hygiene Machinery Update

June 14, 2005

machinery manufacturers have a good view of the hygiene segment

Competition in the hygiene market is fierce. This trend is affecting everyone involved in this marketfrom the young mother deciding which diaper brand is best for her baby to the products manufacturers to the company supplying raw materials and equipment to the end use manufacturer.

SSP Technology offers machinery for the production of feminine hygiene items.
For the young mother, competition has led to industry consolidation and narrowed the field of diapers from which she can choose. Meanwhile, the end use manufacturer must now offer innovation at low prices to win customers. They are able to achieve this goal through advancements made by raw materials suppliers and equipment manufacturers. On the raw material side of the business, suppliers have had to improve their offerings without raising prices, and for machinery and equipment suppliers, innovation has made features, once deemed luxurious, standard on most machines.

The current hygiene market is guided by raw materials, explained Thilo Konig, sales and marketing director of GDM SpA, Offanengo, Italy. The raw materials used are continuously being developed and changed and therefore the machines making the disposable products must adjust to the needs of the producer. Furthermore, the customer requires a greater line flexibility to quickly follow product innovations with a rapid and simple evolution of the product line.

Among the main requirements of hygiene machinery are modularity, transportability, component standardization, ergonomy, high performance, simplicity, flexibility, modularity, high speeds and process optimization. In essence, hygiene manufacturerswhether they are producing baby diapers, training pants, sanitary napkins or adult incontinence itemsare demanding a lot from their machinery. Not only must the machines be able to achieve many functions, they need to easily conform to the whims of consumers. These demands change practically daily and range from thinness to refastenability to softness to stretch.

The consumer market determines the machine design, explained Otto Vriend, sales manager of hygiene for Winkler + Dunnebier, Neuwied, Germany. As the product designs are showing shorter life cycles, the machines must be able to accommodate the marketers need for frequent changes to their products features.

While issues plaguing the three main subsegments of hygienebaby diapers, feminine hygiene and adult incontinencevary, all three have several things in common. For one, they are facing maturity and high penetration levels in developed regions such as North America, Europe and Japan; for another, they are constantly being challenged to up their innovation, either by being thinner, better fitting or having more features. Therefore, many machinery manufacturers in the hygiene segment participate in all three markets, sharing technologies among them.

A Challenging Climate
Hygiene products have changed noticeably in recent years, and one of the ways manufacturers have been able to meet customer demands is through machinery innovation. Machinery manufacturers have had to constantly develop new products to meet the needs of the industry.

While this has driven sales and boosted activity in the segment, it has also stretched research and development budgets without raising equipment prices.

Additionally, manufacturers have had to produce equipment that can accommodate the varying needs of the hygiene market. Not only is this market segmented by product type, it is also divided by company type. Larger companies such as Procter & Gamble, Johnson & Johnson and Kimberly-Clark favor large-scale, sophisticated machine lines that can produce thousands of products per hour. On the other hand, smaller producers are looking for smaller equipment that may not produce as many products per hour but still offers high quality and flexibility.

Customer needs are different from company to company, explained Fameccanicas marketing manager, Alessandro DAndrea. Multinational companies with their own branded products are challenging us to produce machinery that guarantees the highest process optimization and to reach high quality standards and maximum reliability. Other companies, such as private label manufacturers, must be quick when making investment decisions and need to be prompt in reacting to market changes. Therefore, they look for efficient and flexible machinery that can easily and quickly implement new product features so they can plan investments in different steps.

Machinery manufacturers such as GDM (top) and Fameccanica (bottom) are constantly updating their products to meet the needs of the hygiene market.
Hygiene manufacturers want the option of adding and removing features such as leg cuffs, resealable tapes and cloth-like backsheets, but they dont want to invest in a new production line, which can cost millions of dollars, every time the market demands a new innovation. In the past two years, baby diapers have undergone changes and innovationsjust think about the closure systems alone, explained Roberto Crippa, chief executive officer of SSP, Garlasco, Italy. Innovation has had an effect on machinery manufacturing companies. We need to always be ready to satisfy any possible customer request.

Innovation has kept machinery manufacturers busy in recent years, staying one step of head of the many changes made to hygiene products. One area undergoing a significant change is superabsorbent polymers and the way they are applied to absorbent products. Technology allowing manufacturers to convert to rolled superabsorbent material from the more traditional powdered SAPs has led to machinery changes, GDMs Mr. Konig explained. Also, the increased use of elasticsfor tapes and wingsin adult incontinence and baby diaper products has led to changes.

The Big Three
While there are various niches and subsegments, the hygiene market is largely comprised of three main segmentsbaby diapers, adult incontinence and feminine hygiene. Similar product design and machinery often mean similar companies involvement in these businesses; however, these segments are as different as they are alike, marked by differing customers, product designs and perceptions.

Considering the characteristics of these types of products, the lines used to produce them can also be compared in terms of processing and technology, explained GDMs Mr. Konig. The adult segment is in growth mode with diversified and quality products, while, as in the past, the baby diaper segment remains the segment leader in terms of research and development efforts. In fact, the baby diaper has been modified in its form, material and characteristics, which has led to a modernization of production lines.

In addition to being the segment leader in terms of research and development, baby diapers comprise the largest piece of the hygiene market. In fact, this market is also the largest market for nonwovens worldwide. In recent years, diaper trends have largely been dictated by the activities of a handful of large, multinational companies, which have consistently added to diaper designs, posing challenges for machinery makers to meet. And, because of the commodity nature of the baby diaper market, margins are tight, and, in order to win customers, equipment companies must offer this innovation at competitive prices.

Our recent developments in diaper machinery manufacturing allow less expensive production, without lowering the quality of the final product, explained Davide Viola, manager of M. D. Viola Macchine S.r.l, Valle Salimbene, Italy. In essence the goal is to make economical products, considering the manufacturing process from raw materials to the packaging and the distribution of the final products.

Most closely related to the baby diaper market is the adult incontinence segment. In fact, many adult incontinence items are large baby diapers. Unlike the diaper market, however, the adult segment is being viewed as a growth market. As aging populations in developed countries increase and these items become less taboo, adult incontinence will continue to grow in size and scope. The fields of baby and adult diapers are both stable, explained Fabrizio Coladonato of Diatec Srl, Collecorvino, Italy. However, feminine hygiene is growing because of better market penetration and fashion trends.

The third key segment, feminine hygiene, has been in transition in recent years as many sanitary napkins have adopted a pre-formed airlaid core, making them thinner and more discrete than their predecessors. This switch led to significant machinery investments among feminine hygiene manufacturers during the second half of the 1990s. Today, however, the large-scale shift to airlaid cores is fairly complete and most of the products that were going to switch have already.

Machinery manufacturers see both positives and negatives in all of hygienes areas. The feminine hygiene areas are having trouble with lowered pricing in developed areas, but this trend is opposite in developing regions, where this business is growing quickly, said Fameccanicas Mr. DAndrea. Meanwhile, baby diapers and adult incontinence products are getting better overall results in developed nations, but developing countries maintain substantially low penetration rates.

Preparing For Change
While some hygiene machinery manufacturers have emphasized the rapid rate of changes that have characterized the hygiene segment during the past decade, others feel the changes are not yet complete and expect continued alteration and innovation to affect the market in upcoming years. These changes will relate to not only product design but also to the general landscape of the market.

Traditionally, the U.S., Western Europe and Japan have been considered key areas by hygiene manufacturers. This is changing as these markets near full penetration. Therefore, developing regions are being eyed by manufacturers who are looking for untapped customer bases. Latin America and the Far East are two very important regions for us in terms of expansion, explained SSPs Mr. Crippa.

For W + D, a specialist in feminine hygiene equipment, shifting demographics as well as a change in product demand is expected. This will lead the company to develop machinery that can process new materials. The pressure on machinery manufacturers is increasing, Mr. Vriend explained. The company has adjusted its cost structure during the past several years to remain a competitive player.

In addition to new regions, some manufacturers are eyeing opportunities in new markets for absorbent products. BHT Bicma, Mayen, Germany, for example, has noticed increased growth and more sophisticated designs in the nursing pad market, which was once considered only a niche market. The design of nursing pads has become similar to sanitary napkins with an acquisition layer, superabsorbent polymers, release papers and other features that increase the product value and consumer comfort, said Andrea Allar of BHT Bicma.

Hygiene manufacturers will continue to face increasingly tough conditions brought on by saturated markets in industrialized countries and stagnant economies in developing markets. Competition is the result of reduced market growth, stagnation in product development and an increasing amount of suppliers, Ms. Allar said. This has increased the importance of added value options such as service, flexibility, response time and competence.

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