Domtar Personal Care has won a major contract with a North American retailer to supply private label baby diapers. The new business should start influencing the company’s top and bottom lines starting later this year, CEO John Williams told investors during the company’s earnings call this week.
The contract will also help offset some volume reductions caused by streamlining measures including SKU reductions across multiple product lines and the elimination of highly complex, lower value products, Williams adds. These moves will eliminate time consuming changeovers on manufacturing lines that will lead to productivity gains for the business.
During the first quarter of 2018, Domtar’s personal care sales increased 1% and the business was characterized by increased competition, pricing pressures and higher raw material prices. Sales of baby diaper products grew 4% in volume terms while adult incontinence growth was 2%.
Domtar’s new partner in baby diapers is a national retailer with ambitious plans to grow its private label share dramatically, Williams says.
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