Amidst a declining domestic birth rate and intense competition from China, the Japanese nonwovens industry continues to face struggles. Last month, Unitika was the latest nonwovens producer to respond to market pressure, saying it was exiting the textile business and seeking a buyer for its nonwovens and fiber units, which generate about 40% of its total business.
According to the company, efforts to relocate much of its production to southeast Asia, where it established an operation in Thailand in 2014, have not proven effective. In fiscal 2024, the company projected a consolidated net loss of ¥10.3 billion and reports its equity has shrunk by ¥7.3 billion to ¥29.4 billion from late March to the end of September.
Another Japanese producer, JNC Fibers, which is specialized in thermal bonded nonwovens for baby diaper applications, has ceased production at its Japanese facility and sold one of its two Chinese sites to a local company, reducing its nonwovens output in Asia in two separate actions late last year. The company attributed weakening demand within the baby diaper market to both decisions. JNC, which has been active in the Asian nonwovens industry since 1995, will continue to produce thermal bonded materials at its remaining Chinese site as well as in Rayong, Thailand.
Japan’s two largest nonwovens producers, Mitsui Chemicals and Asahi Kasei decided to join forces against challenges in the Asian nonwovens industry, namely declining demand for diapers in Japan as well as increased competition from Chinese products. In 2023, the two companies announced a joint venture integrating their spunbond and nonwovens operations in Japan and Thailand.
The integration of the two companies has allowed them to rationalize the varieties of nonwoven fabrics for diapers and to remodel the business for diapers to increase efficiency and further strengthen its products in the industrial materials field to create a more profitable business structure, according to the company
Market Contraction
Declines in Japanese production are nothing new. According to Kin Ohmura, of Osaka Chemical group, nonwovens output has been steadily declining in Japan since 2018, from 341,000 tons to 269,000 tons in 2023. Meanwhile, Asian nonwovens output has increased from 5.5 million tons to 7.3 million tons during the same period, with the strongest growth being seen in China and India.
During the same timeframe, Japanese baby diaper production has decreased 11.9% to 284,471 tons amidst a declining birth rate—in 2023 the number of babies born in Japan was down 5.1% from the previous year. Japan now has one of the world's oldest populations, with almost 30% of its citizens aged 65 or older. Last year, the proportion of those aged above 80 surpassed 10% for the first time.
This has led some Japanese-based hygiene makers to shift their focus. In September 2024, Oji Holdings announced it would exit the domestic baby diaper business due to fewer births and falling demand for its baby care items in Japan. It plans to focus instead on adult diapers.
Oji Holdings says its annual output of baby diapers has declined to about 400 million in recent years from a peak of roughly 700 million in 2001. The company continues to make and sell baby diapers to the Malaysian and Indonesian markets.
While it continues to hold top marketshare across the major hygiene categories—including baby diapers—in Japan, Unicharm, the country’s largest absorbent products manufacturer, has been focusing on growing its business outside of Japan for nearly four decades, recognizing that the market was maturing. Since 2001, the company’s the share of overseas sales has increased from 17% to 65% thanks to a number of investments around the world.
Most recently, Unicharm partnered with Toyota Tsusho Corporation to make and market sanitary napkins in Kenya early this year with the aim of contributing to women’s social advancement and solving social issues through the popularization of sanitary products in the African market. Currently, the penetration of sanitary napkins in African markets is low, particularly in Kenya, where it currently stands at 30%. Unicharm is also expanding in Ghana and Cote d'Ivoire.
"Together with Toyota Tsusho, Unicharm aims to realize a society where all people can live with peace of mind through the widespread use of sanitary products in the African market. Through this initiative, we will establish a sustainable business model rooted in the region by combining Toyota Tsusho’s extensive network with our technological capabilities and contribute to enhancing the quality of life (QOL) of local consumers,” says Takahisa Takahara, president & CEO of Unicharm Corporation, comments:
