Pricie Hanna, vice president at industry consultancy John R. Starr, Inc., presented her take on Global Hygiene Trends at Vision 2011 last month. What she has found is emerging markets are recovering more quickly than mature markets where growth is driven by increasing diaper market penetration. In some of these regions, penetration rates are as low as 6%, particularly in rural areas.
As these regions begin experiencing GDP recovery and their populations become more urban, the use of disposable products, like diapers, is expected to rise. To prepare for this growth, makers of disposable diapers and other hygiene products have already entered full-blown expansion mode in many developing regions. In China, Unicharm's third hygiene plant started up in March 2010 and the second phase of Procter & Gamble's diaper expansion in Tianjin is underway. Additionally, both of these companies are now making diapers in India, and P&G has expanded into Vietnam and the Philippines. To aid in this expansion, nonwovens investment has also been strong—investments from Avgol, Toray Polytech, First Quality and Fiberweb/Chisso have been announced for China, while Mitsui and Fibertex are expanding their operations in Japan and Malaysia, respectively.
Latin America, while not expanding as quickly as Asia, is also in growth mode. In Mexico, diaper penetration is 85% while feminine pad use stands at 71%. Brazil's diaper penetration is 61% while feminine pad usage is 70%.Hygiene companies banking on growth here include P&G with a new diaper and feminine hygiene pad plant in Alagaos, Brazil and SCA with its acquisition of Copamex diapers in Mexico and Central America. FitesaFiberweb is adding a new plant in Peru and Providencia is building a 20,000-ton line in Brazil.
While, penetration in North America is high, companies are hoping to profit off the aging demographics as more baby boomers depend on adult incontinence items. SCA and Unicharm are building a plant for protective underwear in Bowling Green, KY and Medline is adding a new underwear and brief line in Douglasville, GA. Kimberly-Clark has expanded capacity for protective underwear in Menasha, WI.
In Russia, K-C added a plant with two Huggies diapers lines in Stupino and SCA added a plant south of Moscow to make Libero diapers and Tena incontinence products in September 2010. P&G has expanded its Pampers diaper capacity in Russia. Meanwhile, P&G's plans for the African continent include a second plant to make diapers and feminine hygiene pads in Egypt by 2020. Unicharm plans to build a new diaper and feminine hygiene plant there by 2012
All of this investment has led Ms. Hanna to conclude that strong growth prospects continue for state-of-the-art, cost-competitive nonwovens used for hygiene products. "This growth will be driven by market penetration growth in emerging markets with rising consumer incomes as well as adult incontinence product growth in mature markets with aging populations,"she concluded.