Tara Olivo, Associate Editor08.05.20
Growth potential for nonwovens—and the products that use them—is greatest in emerging markets where market penetration is much lower than in mature markets. Factors such as increased disposable incomes and population growth are particularly visible in these markets where the consumption rates of items like baby diapers, feminine care items and incontinence products still remain low. While many of these regions face challenges—economically, culturally and logistically—manufacturers of nonwovens and end products that use the materials are ensuring they’re positioned to take advantage of any opportunities for growth in the future. In the following pages, Nonwovens Industry takes a look recent actions by manufacturers in the industry in four major world regions or countries—Africa, India, Latin America and Southeast Asia.
Africa
Africa’s emerging economies are presenting new opportunities for manufacturers in the nonwovens and related industries looking for their next growth engine. With rising income levels, and as education on health and hygiene becomes more widespread, the use of disposable hygiene products will continue to expand.
In its study “The Future of Global Nonwovens to 2024,” market researcher Smithers reports that African markets, which had about 4.4% market share in 2019, are expected to drop slightly to around 4.2% in 2024, as all regions grow slower than Asia. Still, tonnage in 2014 was 441,200, 491,700 in 2019 and is projected at 647,300 tonnes in 2024, at annual growth rates of 2.2% (2014–19) and 5.7% (2019–24).
In particular, South Africa has become a hotspot of activity among nonwovens producers and hygiene companies. Eyeing hygiene market growth in the region, PFNonwovens’ recently invested in a 10,000-ton Reicofil line in Cape Town, which began operating in full commercial mode in the third quarter of last year.
According to PFN executives, the investment in the country provides it with the potential to supply not only its current global clients but also smaller ones, local producers of disposable hygiene products, and thereby the ability to broaden its customer base. PFN also has a North African operation in Egypt.
Also capitalizing on hygiene growth there is Spunchem, a major nonwovens manufacturer in the country, which responded to the anticipated growth within the South African hygiene market by increasing its production capacity in its hygiene-focused facility to 32,000 tons per year. The company’s move into hygiene, which was announced in 2016, has allowed it to become one of the region’s first suppliers of locally made spunbond and spunmelt nonwovens to serve the hygiene market. Previously, the company mainly focused on industrial markets.
According to executives, the decision to establish a hygiene operation came following the conclusion that all high quality SS and SMS fabrics for hygiene products were imported into South Africa. In establishing the hygiene business, Spunchem worked closely with a top-tier diaper manufacturer, which included extensive trials of products manufactured using the technology that Spunchem employs. Spunchem also increased its coating/laminating and printing capacity to make cloth-like backsheets, cast film, breathable film in two and four colors.
Adhesives manufacturer H.B. Fuller is also investing in South Africa. In June the company announced the opening of a new business office in Johannesburg and a network spanning three warehouses across the country to support its ambitious growth plans in the region.
At the new entity South Africa business manager Ronald Prinsloo and his team will draw on H.B. Fuller’s global network capabilities and technical centers to better serve customers in close proximity to where they operate by supporting sales in local currency, offering ex-stock deliveries and providing excellent technical service.
The new commercial organization aims to rapidly grow H.B. Fuller’s share of the substantial local market for adhesives, leveraging its significant combined experience to increase the company’s share of a potential €100 million per year market.
“Having a local presence in South Africa enables us to offer outstanding, local knowledge of customers’ production processes not only in the hygiene market but also in graphic arts, paper converting, end-of-line, flexible packaging, and labeling markets, helping customers find a competitive advantage through their adhesive applications,” Prinsloo says. “With this new commercial expansion in South Africa, H.B. Fuller enhances its capacity to respond to rising demand from customers in what is considered one of the largest and fastest growing markets on the continent.”
According to Prinsloo, there is still a large growth opportunity in the hygiene market in Africa due to low per capita use and high birth rates. “There are several countries where limited numbers of the population use disposable hygiene products in their everyday lives. This is due to education, cultural and affordability reasons,” he adds.
Factors such as poverty and cultural upbringing can slow growth in the hygiene market, but Prinsloo notes that improved opportunities and pay for women are however driving demand for feminine care products.
In Africa, H.B Fuller has manufacturing capabilities in Egypt and Kenya.
As far as hygiene operations in Africa, multinationals Procter & Gamble and Kimberly-Clark have long had a presence on the continent, but other foreign players have begun to establish manufacturing operations in recent years.
Turkish consumer goods manufacturer Hayat Kimya launched its premium diaper brand Molfix in Africa’s biggest market by population size—Nigeria—five years ago and since then has become a leader in the region.
Last year it expanded its offerings in the country by adding a pants-style product. Molfix Pants are specially designed for mothers who are seeking convenience, as well as offering their babies with more freedom to explore and to potty train.
“As a company, we approach our vision with strong focus and commitment,” says Motayo Latunji, sales director of Hayat Kimya. “Our organizational goals and ambitions are clear to us, therefore we cannot be easily distracted by local or economic factors. We trust our brands and we understand the potential of the market as well as its dynamics. We know that Nigeria’s economic situation is temporary. As a long-term focused company, we shall continue to invest for the future. We know where we are headed.”
In February Kimberly-Clark also introduced a line of diaper pants in Nigeria under its Huggies brand. The company claims new Huggies Nappy pants are recommended by nine out of 10 Nigerian mothers to deliver comfort to their babies while guaranteeing dryness. The pants style diaper offers comfort, fit and ease of use.
According to local reports, K-C closed its factory in Nigeria last year with plans to invest in a new plant with enhanced technology and capabilities allowing it to meet market demand owing to the increased demand for its products.
Meanwhile in East Africa Hayat Kimya recently entered the Kenyan market with two varieties of Molfix diapers—Molfix day and night diapers and the Molfix baby pants.
At the launch, Hayat Kimya Global CEO Avni Kigili expressed the company’s commitment to the country by saying it hoped to be a market leader within two years. “Kenya is a developing country, carrying a lot of potential, with her growing, young population, with her strategic location for Central and East of Africa. Hayat would like to be part of this rapidly modernizing and developing country by offering brand quality and innovation with Molfix,” she said.
Ontex is also capitalizing on growth potential in East Africa. Three years ago the European manufacturer of private label and branded hygiene products opened a new production plant in Hawassa, Ethiopia.
In Ethiopia, under its Canbebe brand, Ontex produces baby diapers that specifically meet the needs of African families. The site is another step in Ontex’s expansion strategy, the company said, and it increases the availability of its products in developing markets. Ontex became the first international personal hygiene company to open a plant in the country, the second largest market of Africa, with a view to serve the East African region.
“At Ontex, we strongly believe in a local market approach,” Ontex CEO Charles Bouaziz explained at the time of the opening. “Offering local brands, sourced from manufacturing plants which are strategically located allows us to respond efficiently and flexibly to consumers and customer needs. Our new Ethiopia plant is a perfect illustration of this; it will help us to better serve the African market.”
In Africa Ontex also produces baby and adult care products at a production site in Algeria that opened in 2008.
According to Oba Odunaiya, director, Operations & Procurement, Wemy Industries, one of Nigeria’s longest-standing hygiene manufacturers, the absorbent hygiene market in Africa is gradually growing, with many local and foreign players already in the market. “People are becoming more aware about the importance of personal hygiene and because of this, there has been a rising demand for pads and diapers that are highly cost-efficient and beneficial to everyone, with various initiatives taken from the government, NGO’s and individuals. As a result of this, there’s been a massive growth in the absorbent hygiene market to produce more of these products,” he says.
Wemy currently produces baby diapers, baby wipes, adult diapers, under pads, hand sanitizing wipes and maternity pads. Wemy’s adult diaper is its newest product offering and Odunaiya says it is the first local production of the products in West Africa.
Recently, in response to the covid-19 pandemic, Wemy chose to begin the production of face masks. The company will be able to supply face masks to the Nigerian populace and the whole of West Africa while also making Nigeria independent of imports. Local manufacturing of surgical masks to Wemy means an increase in availability of masks in Africa, which at this point is much needed because the fear of masks shortages is driving countries to taking extreme measures to secure them, he says.
Wemy has been looking into the manufacturing of disposable surgical face masks as another layer of its product diversification strategy for more than three years, Odunaiya says. “There are only small scale manufacturers of this important disposable surgical face mask in North Africa and non sub-Saharan Africa. Therefore, there is an import substitution opportunity for Wemy Industries in terms of lead times and price for customers in West Africa.”
Odunaiya notes that face masks are heavily consumed in Africa because they are used for many purposes. “Nigeria imports an average of eight to 10 40 foot containers a month as of 2016, based on research carried out by Wemy’s research department. Currently, it has more than quadrupled as of May 2020.”
To a large extent, Wemy Industries believes that introducing face masks to its production line will help improve the efficiency of the health and security workers, help curtail the spread of the coronavirus and most importantly, protect the health of the citizens which has always been the goal of Wemy Industries.
The production of Wemy’s surgical face masks is expected to begin in the next two months.
India
Rising income levels and population growth are evident in India, the second most populous country in the world. With the government and industry continuing to promote modern-day hygiene practices, products like baby diapers and feminine hygiene products are expected to see rising demand.
According to Harsh Gupta, director India, Middle East and Africa, H.B. Fuller, the hygiene industry in India continues to grow rapidly across all segments, largely due to higher disposable incomes, increasing number of employed women, educational awareness campaigns and numerous government and NGO initiatives. “In a vast and diverse market like India, there are significant opportunities for manufacturers to innovate and cater to niche and newfound demands,” he says.
Increased advertising and promotional activities have made consumers more aware of the importance of sanitary protection and these higher levels of awareness are stimulating demand, Gupta explains. “For example, leading companies are running awareness programs by partnering with schools and NGOs to educate consumers on the importance of using sanitary protection products. In many cases, samples have been distributed to encourage consumers to use these products – particularly those living in rural India.”
The government is also playing an important role in raising awareness among the rural population, he adds. “Sanitary towels are now available through a variety of distribution channels including modern grocery retailers, chemists/pharmacies, independent small grocers, health and beauty specialists and even vending machines at railway stations.”
H.B. Fuller has had a local presence in India since 2011 through its 24,000-metric-tons-per-annum manufacturing facility in Shirwal, India, located 65 kilometers from Pune. Through the addition of its new business office in Pune, as well as its new state-of-the-art R&D center, the company is able to help its customers solve problems and create new solutions more rapidly than ever before. Occupying 5000 sq. ft. of the Shirwal manufacturing facility, the new R&D center offers dedicated areas to conduct experiments, run demonstrations and train customers on H.B. Fuller’s hot melt, water-based, anaerobic and cyanoacrylate technologies. Its proximity to the production floor facilitates excellent collaboration between the R&D and the operations teams. The new business office is also home to 50 employees in customer support, business functions, and administrative roles.
In nonwovens investment news, Toray Industries (India) Private Ltd., a subsidiary of Japanese company Toray Industries., broke ground on its new production base in Sri City, India, in 2018. The facility houses two plants—a polypropylene (PP) spunbond plant producing advanced nonwovens used in diaper manufacturing and an engineered plastics resin compounding plant that makes raw materials for electrical components of automobiles and in electrical and electronic connectors.
“The disposable diaper is the largest application in hygiene market, and also the largest item for PP spunbond, so the demand is expected to increase significantly as the economic development increasing personal income to change the lifestyle in India,” says Tatsu Matsushita, general manager of the Performance Nonwoven Products Department of Toray Industries. “In addition, the birth rate is also expected to be high along with the population expansion, the second largest one in the world. So we see many hygiene products manufacturers are aggressively coming and expanding their business in India to look for high performance PP spunbond, which enables [them] to improve their products’ performance in the market.”
The 18,000-ton PP spunbond line was expected to start up in March, however it has been postponed due to the Indian government’s lockdown related to the covid-19 pandemic.
From an in demand growth standpoint, India is clearly the most expected market, Matsushita explains, but at the same time it still premature. “Our simple strategy in India is to build the highest quality supply network locally standing closer to our customers as soon as possible.”
Nan Liu Enterprise, a Taiwanese nonwovens producer, is also expanding with a production site in the country. Outside of India, the company already makes spunlaced and thermal bonded nonwovens at one factory in China and three in Taiwan with a total output between 65,000-70,000 tons per year. The company has produced wet tissue, face mask, gown and drape materials for operating rooms.
The Indian plant is expected to be completed and put into production in the third quarter of this year, and the monthly production capacity will be 600 tons of nonwoven fabrics, 2 million sheets of facial sheet masks, and 3-4 million packs of wet wipes, with an expected annual turnover of NT$ 1 billion after three years, according to the company’s website.
In hygiene news, Japanese manufacturer Unicharm suffered a major setback in the country at the end of June when a massive fire gutted the company’s manufacturing facility located at Sanand near Ahmedabad, according to local reports.
The blaze destroyed the facility, which manufactured products including sanitary napkins and diapers. Fire officials believe that the cause of the fire may never be known, local reports say.
During the time of the fire, about 300 employees were at the site, however, no injuries occurred, according to a statement from Unicharm following the incident.
“We deeply apologize for the tremendous trouble and inconvenience we have caused to people in the area, customers, clients, and partners. For the reason and the damage of the situation for the fire, it is currently under investigation. We have taken this factory fire very seriously and will determine the cause of it and strive to prevent a recurrence.”
Inaugurated in 2018, the Sanand site is the largest facility for the company in India. It also has a plant in Andhra Pradesh.
Latin America
Despite its economic challenges, the Latin American market is considered a region with potential for growth for nonwovens producers and manufacturers that use the materials. In fact, interest has continued to build in the region as hygiene makers all over the globe have made acquisitions and investments in recent years.
European hygiene manufacturers Ontex and Drylock Technologies have both looked to Latin America for growth through acquisition. Ontex established its Americas Division in 2016 after it acquired 100% of the shares of Grupo P.I. Mabe, which had a strong position in the Mexican market, as well as in the U.S. It expanded the Americas Division in 2017 with the acquisition of the personal hygiene business of Hypermarcas in Brazil. Drylock, on the other hand, simultaneously acquired two competing Brazilian personal care companies, Mardam and Capricho, in 2018.
The latest acquisition news in the region happened in June when Japanese hygiene manufacturer Daio Paper Corporation finalized a deal with Marubeni Corporation to jointly acquire indirectly all shares of Santher, a manufacturer of personal care products. A joint investment company established in Brazil called H&PC Brazil Participações S.A, in which Daio and Marubeni hold 51% and 49% stake in Santher, respectively.
In a statement, Daio said it considers the transaction as an attractive opportunity to enter the Brazilian market where demand for consumer goods, including personal care, is expected to significantly increase. Daio’s vision is to extend the business to the entire South American region and furthermore to Southern Africa by capturing customer demands for high value-added products driven by economic growth in the region.
Daio and Marubeni have decided to jointly enter the Brazilian market as they determined the market as attractive, in light of the significant population growth and economic development of the country, and anticipated notable demand growth for consumer goods including personal care products.
The Brazilian H&PC market is the fourth largest market in the world, with household paper products and disposable diapers marking an annual growth rate of 5.6% and 5.4% respectively over the last five years, and continued growth of the market is expected moving forward, given that penetration rates of such products would increase driven by population growth, economic development and higher living standards. Since it should take significant number of years to gain market share and to generate profit organically through a greenfield investment, Daio and Marubeni believe a takeover of a promising local company will be an effective measure.
Santher has engaged in the sales and manufacturing of personal care products such as household paper, disposable baby diapers and sanitary napkins in Brazil for over 80 years. Brand awareness of the company’s products is notably high throughout Brazil and the company holds a strong position as a market leader in the Brazilian household paper market, and out of the local companies, holds the top share of disposable diapers and sanitary napkins.
In nonwovens news, Brazilian nonwovens producer Fitesa acquired Freudenberg’s South American hygiene nonwoven business in February. Freudenberg, which has had success in Brazil with nonwovens for the regional South American hygiene market since 1985, said that over the past few years, the hygiene market has shifted from a regional market to a global one. “Fitesa is geared to the global hygiene market. Under this set up, our current regional business can perform better and grow long-term in the new structures,” Dr. Frank Heislitz, CEO Freudenberg Performance Materials, said at the time of the announcement.
The Fitesa Jacareí site produces mainly carded ATB nonwovens for hygiene applications. Fitesa also produces nonwovens at four production units in Latin America—in Gravataí and Cosmópolis, Brazil, Peru and Mexico.
According to Mariana Mynarski, corporate marketing, Fitesa, the main challenge in South America today is that the region is still recovering. “Our success in this turbulent market can be partially attributed to our history in the market and our management culture,” she says. “Fitesa has been a reliable partner for local/regional hygiene and healthcare manufacturers since the 1990s, always focusing on the long term business relationships. We have also been able to implement a discipline of cost reduction and continuous improvement that has proven to be key in overcoming stress periods like the one the world is facing now.”
As any emerging market, the economic and political developments in South America have a significant impact in the consumption of hygiene products such as diapers, she adds. “Being responsible for approximately 50% of the total South American demand, the Brazilian market instability has significantly impacted the region’s growth for several years now. Although we are optimistic about the future, we are not forecasting strong growth rates in the short term for any hygiene market segment.”
Since the beginning of the pandemic, Fitesa has made adjustments to its capacity worldwide, and increased production of nonwovens for surgical and respiratory protection. “Maybe the largest impact until now was in Brazil, where we operate specialized equipment such as 100% meltblown, lamination and spunmelt machines prepared to produce high barrier products,” Mynarski says. “Before the pandemic we were already important suppliers for the country’s healthcare industry, and our actions made it possible to increase production by three times.”
Fitesa has also applied this specialized capability in the production of surgical face masks and N95 respirators that were donated to hospitals in the country. Additionally, Fitesa announced investment in new capacity and implemented several initiatives to maintain its operations running while keeping its workforce safe.
Southeast Asia
According to Euromonitor International, Asia-Pacific is currently the largest market for retail disposable hygiene products. The market tracker says this is supported by an ample yet not fully tapped consumer base, rising awareness and availability of products and increasing spending power. Within Asia-Pacific, Southeast Asia (SEA) brought in $5 billion in retail sales in 2019, and over the next five years, SEA is expected to see healthy growth in retail, at a CAGR of 8%.
Hygiene maker Vinda is taking advantage of positive growth prospects in the region. Last year Vinda Group Southeast Asia (Vinda SEA) launched the construction of its regional headquarters in Malaysia. Located on 27-acres, the new site will comprise a double-story manufacturing plant with raw material warehouse, a finished goods warehouse, the Vinda Innovation Centre and a six-story administration block to be implemented in phases, in line with Vinda’s five-year plan.
The regional hub will develop, manufacture, and/or market four different product categories, namely baby care, incontinence care, feminine care and tissue products. Drypers, Tena, and Libresse are currently the market leaders, while Vinda Deluxe is seeing strong growth momentum in the markets since the 2017 launch. This facility will serve mainly the Southeast Asian market, and support sales to more than 25 countries, with Malaysia being the strongest market.
Besides being the regional hub for Vinda International’s activities in Southeast Asia, including support for sales, technology, marketing and finance functions, the headquarters will house the Vinda Innovation Centre, the only one outside China.
The Vinda Innovation Centre has full in-house capabilities with a broad set of experts for innovation, product development, and marketing. The center will also follow strict international standards for product development consistent with practices followed by Vinda China and Essity, which is the majority shareholder of Vinda International Holdings Limited.
The first phase of the plan is expected to be complete in 2021, when the warehouse will also be operational. The second phase is expected to be complete by 2023, with manufacturing facilities and the Innovation Centre to be in operation by then.
Unicharm, meanwhile, is reporting success in Thailand where its sales in baby care continue to grow at a steady rate, supported by moves to expand distribution channels through direct sales and by a shift to premium products. In its 2019 Integrated report, the company said its share in the market was roughly 60%. Including DSG International (Thailand), which it acquired in September 2018, Unicharm is the dominant player in the Thai market with a combined share of around 87%.
DSGCL Group manufactures disposable diapers for babies and adults, with locations in Thailand, Malaysia, Indonesia and Singapore. DSGCL’s baby diaper brands include BabyLove, Fitti and PetPet, while its adult diaper brands include Certainty. According to Unicharm, the integration of the DSGCL Group expands and improves its product lineup, enhances its market position and realizes the economies of scale in the Southeast Asia region, particularly in Thailand and Malaysia.
On the nonwovens side, Fitesa is expanding its operations in Southeast Asia after it acquired a 51% stake in Rayong, Thailand-based CNC International in 2018, which marked its first entry into the fast-growing market.
Last year, the company announced a $70 million investment in a new spunbond line at joint venture, now called CNCFitesa. Prior to the acquisition, CNC operated two spunmelt sites in Rayong as well as a sales office in Tokyo, from which it largely supplies the hygiene market.
According to Fitesa’s Mynarski, the new machine is expected to start up in S2 2020, increasing its total capacity in Asia close to 90 kMT/year. “In addition to being one of the fastest-growing markets in the world, Southeast Asia has important regional hygiene players that we would not be able to serve with the desired cost and service levels from other locations where we already operate,” she says. “We believe in being close to our customers, and Southeast Asia was a natural next step in order to strengthen this position.”
As any developing market, the main growth driver in Southeast Asia remains economic development and urbanization, Mynarski adds, and diaper penetration there is still considered low. “In this scenario, economic and political uncertainty remains a key challenge for realizing this growth. Another important challenge is to manage the balance between cost accessibility and innovative features. In fact, this has been one important driver within our innovation centers – to develop solutions that can be effectively adopted by customers, and do not ‘die’ inside our laboratories.”
Meanwhile, Asahi Kasei is expanding production capacity for spunbond nonwovens in Thailand with the addition of a new production line at its subsidiary Asahi Kasei Spunbond (Thailand) Co., Ltd. The third line will add 15,000 tons per year to the total capacity bringing the site’s total output to 50,000 tons. Since entering the spunbond business in 1973, Asahi Kasei has supplied Eltas spunbond for use in a wide variety of applications including disposable diapers and other hygiene products, automotive and other industrial applications and deodorizing sheets and other consumer products. Asahi Kasei has expanded the spunbond business with two production sites in Japan in Moriyama, Shiga, and Nobeoka, Miyazaki as well as AKST in Thailand since 2012.
AKST started operation of its second production line in 2016 to meet rapidly growing demand for spunbond for diaper applications in Asia. The third line will further reinforce AKST’s capability to meet ongoing demand growth with higher product performance, quality, and cost competitiveness. It is expected to start up in July 2021.
Another arm of Asahi Kasei, Asahi Kasei Asia Pacific Co., Ltd. (AKAP), began operating last year as Asahi Kasei’s regional headquarters for business in the ASEAN region.
Asahi Kasei currently has 16 entities in five ASEAN countries. With its steady population growth and ongoing economic expansion, the company said ASEAN is not only an important region for manufacturing but is also becoming a key market. As economic activity continues to advance in this region of diverse languages, commercial customs, and legal systems, regulatory requirements for business operation are advancing apace. It was therefore determined that a regional headquarters for Asahi Kasei Group operations in the ASEAN region would enable increasingly diverse and complex risks to be effectively managed.
Located in Bangkok, Thailand, AKAP will contribute to further growth of the Asahi Kasei Group’s business in the ASEAN region through enhanced marketing and management functions while supporting the operations of each entity, advancing human resources development, facilitating coordination among the different entities and raising operational efficiency.
Africa
Africa’s emerging economies are presenting new opportunities for manufacturers in the nonwovens and related industries looking for their next growth engine. With rising income levels, and as education on health and hygiene becomes more widespread, the use of disposable hygiene products will continue to expand.
In its study “The Future of Global Nonwovens to 2024,” market researcher Smithers reports that African markets, which had about 4.4% market share in 2019, are expected to drop slightly to around 4.2% in 2024, as all regions grow slower than Asia. Still, tonnage in 2014 was 441,200, 491,700 in 2019 and is projected at 647,300 tonnes in 2024, at annual growth rates of 2.2% (2014–19) and 5.7% (2019–24).
In particular, South Africa has become a hotspot of activity among nonwovens producers and hygiene companies. Eyeing hygiene market growth in the region, PFNonwovens’ recently invested in a 10,000-ton Reicofil line in Cape Town, which began operating in full commercial mode in the third quarter of last year.
According to PFN executives, the investment in the country provides it with the potential to supply not only its current global clients but also smaller ones, local producers of disposable hygiene products, and thereby the ability to broaden its customer base. PFN also has a North African operation in Egypt.
Also capitalizing on hygiene growth there is Spunchem, a major nonwovens manufacturer in the country, which responded to the anticipated growth within the South African hygiene market by increasing its production capacity in its hygiene-focused facility to 32,000 tons per year. The company’s move into hygiene, which was announced in 2016, has allowed it to become one of the region’s first suppliers of locally made spunbond and spunmelt nonwovens to serve the hygiene market. Previously, the company mainly focused on industrial markets.
According to executives, the decision to establish a hygiene operation came following the conclusion that all high quality SS and SMS fabrics for hygiene products were imported into South Africa. In establishing the hygiene business, Spunchem worked closely with a top-tier diaper manufacturer, which included extensive trials of products manufactured using the technology that Spunchem employs. Spunchem also increased its coating/laminating and printing capacity to make cloth-like backsheets, cast film, breathable film in two and four colors.
Adhesives manufacturer H.B. Fuller is also investing in South Africa. In June the company announced the opening of a new business office in Johannesburg and a network spanning three warehouses across the country to support its ambitious growth plans in the region.
At the new entity South Africa business manager Ronald Prinsloo and his team will draw on H.B. Fuller’s global network capabilities and technical centers to better serve customers in close proximity to where they operate by supporting sales in local currency, offering ex-stock deliveries and providing excellent technical service.
The new commercial organization aims to rapidly grow H.B. Fuller’s share of the substantial local market for adhesives, leveraging its significant combined experience to increase the company’s share of a potential €100 million per year market.
“Having a local presence in South Africa enables us to offer outstanding, local knowledge of customers’ production processes not only in the hygiene market but also in graphic arts, paper converting, end-of-line, flexible packaging, and labeling markets, helping customers find a competitive advantage through their adhesive applications,” Prinsloo says. “With this new commercial expansion in South Africa, H.B. Fuller enhances its capacity to respond to rising demand from customers in what is considered one of the largest and fastest growing markets on the continent.”
According to Prinsloo, there is still a large growth opportunity in the hygiene market in Africa due to low per capita use and high birth rates. “There are several countries where limited numbers of the population use disposable hygiene products in their everyday lives. This is due to education, cultural and affordability reasons,” he adds.
Factors such as poverty and cultural upbringing can slow growth in the hygiene market, but Prinsloo notes that improved opportunities and pay for women are however driving demand for feminine care products.
In Africa, H.B Fuller has manufacturing capabilities in Egypt and Kenya.
As far as hygiene operations in Africa, multinationals Procter & Gamble and Kimberly-Clark have long had a presence on the continent, but other foreign players have begun to establish manufacturing operations in recent years.
Turkish consumer goods manufacturer Hayat Kimya launched its premium diaper brand Molfix in Africa’s biggest market by population size—Nigeria—five years ago and since then has become a leader in the region.
Last year it expanded its offerings in the country by adding a pants-style product. Molfix Pants are specially designed for mothers who are seeking convenience, as well as offering their babies with more freedom to explore and to potty train.
“As a company, we approach our vision with strong focus and commitment,” says Motayo Latunji, sales director of Hayat Kimya. “Our organizational goals and ambitions are clear to us, therefore we cannot be easily distracted by local or economic factors. We trust our brands and we understand the potential of the market as well as its dynamics. We know that Nigeria’s economic situation is temporary. As a long-term focused company, we shall continue to invest for the future. We know where we are headed.”
In February Kimberly-Clark also introduced a line of diaper pants in Nigeria under its Huggies brand. The company claims new Huggies Nappy pants are recommended by nine out of 10 Nigerian mothers to deliver comfort to their babies while guaranteeing dryness. The pants style diaper offers comfort, fit and ease of use.
According to local reports, K-C closed its factory in Nigeria last year with plans to invest in a new plant with enhanced technology and capabilities allowing it to meet market demand owing to the increased demand for its products.
Meanwhile in East Africa Hayat Kimya recently entered the Kenyan market with two varieties of Molfix diapers—Molfix day and night diapers and the Molfix baby pants.
At the launch, Hayat Kimya Global CEO Avni Kigili expressed the company’s commitment to the country by saying it hoped to be a market leader within two years. “Kenya is a developing country, carrying a lot of potential, with her growing, young population, with her strategic location for Central and East of Africa. Hayat would like to be part of this rapidly modernizing and developing country by offering brand quality and innovation with Molfix,” she said.
Ontex is also capitalizing on growth potential in East Africa. Three years ago the European manufacturer of private label and branded hygiene products opened a new production plant in Hawassa, Ethiopia.
In Ethiopia, under its Canbebe brand, Ontex produces baby diapers that specifically meet the needs of African families. The site is another step in Ontex’s expansion strategy, the company said, and it increases the availability of its products in developing markets. Ontex became the first international personal hygiene company to open a plant in the country, the second largest market of Africa, with a view to serve the East African region.
“At Ontex, we strongly believe in a local market approach,” Ontex CEO Charles Bouaziz explained at the time of the opening. “Offering local brands, sourced from manufacturing plants which are strategically located allows us to respond efficiently and flexibly to consumers and customer needs. Our new Ethiopia plant is a perfect illustration of this; it will help us to better serve the African market.”
In Africa Ontex also produces baby and adult care products at a production site in Algeria that opened in 2008.
According to Oba Odunaiya, director, Operations & Procurement, Wemy Industries, one of Nigeria’s longest-standing hygiene manufacturers, the absorbent hygiene market in Africa is gradually growing, with many local and foreign players already in the market. “People are becoming more aware about the importance of personal hygiene and because of this, there has been a rising demand for pads and diapers that are highly cost-efficient and beneficial to everyone, with various initiatives taken from the government, NGO’s and individuals. As a result of this, there’s been a massive growth in the absorbent hygiene market to produce more of these products,” he says.
Wemy currently produces baby diapers, baby wipes, adult diapers, under pads, hand sanitizing wipes and maternity pads. Wemy’s adult diaper is its newest product offering and Odunaiya says it is the first local production of the products in West Africa.
Recently, in response to the covid-19 pandemic, Wemy chose to begin the production of face masks. The company will be able to supply face masks to the Nigerian populace and the whole of West Africa while also making Nigeria independent of imports. Local manufacturing of surgical masks to Wemy means an increase in availability of masks in Africa, which at this point is much needed because the fear of masks shortages is driving countries to taking extreme measures to secure them, he says.
Wemy has been looking into the manufacturing of disposable surgical face masks as another layer of its product diversification strategy for more than three years, Odunaiya says. “There are only small scale manufacturers of this important disposable surgical face mask in North Africa and non sub-Saharan Africa. Therefore, there is an import substitution opportunity for Wemy Industries in terms of lead times and price for customers in West Africa.”
Odunaiya notes that face masks are heavily consumed in Africa because they are used for many purposes. “Nigeria imports an average of eight to 10 40 foot containers a month as of 2016, based on research carried out by Wemy’s research department. Currently, it has more than quadrupled as of May 2020.”
To a large extent, Wemy Industries believes that introducing face masks to its production line will help improve the efficiency of the health and security workers, help curtail the spread of the coronavirus and most importantly, protect the health of the citizens which has always been the goal of Wemy Industries.
The production of Wemy’s surgical face masks is expected to begin in the next two months.
India
Rising income levels and population growth are evident in India, the second most populous country in the world. With the government and industry continuing to promote modern-day hygiene practices, products like baby diapers and feminine hygiene products are expected to see rising demand.
According to Harsh Gupta, director India, Middle East and Africa, H.B. Fuller, the hygiene industry in India continues to grow rapidly across all segments, largely due to higher disposable incomes, increasing number of employed women, educational awareness campaigns and numerous government and NGO initiatives. “In a vast and diverse market like India, there are significant opportunities for manufacturers to innovate and cater to niche and newfound demands,” he says.
Increased advertising and promotional activities have made consumers more aware of the importance of sanitary protection and these higher levels of awareness are stimulating demand, Gupta explains. “For example, leading companies are running awareness programs by partnering with schools and NGOs to educate consumers on the importance of using sanitary protection products. In many cases, samples have been distributed to encourage consumers to use these products – particularly those living in rural India.”
The government is also playing an important role in raising awareness among the rural population, he adds. “Sanitary towels are now available through a variety of distribution channels including modern grocery retailers, chemists/pharmacies, independent small grocers, health and beauty specialists and even vending machines at railway stations.”
H.B. Fuller has had a local presence in India since 2011 through its 24,000-metric-tons-per-annum manufacturing facility in Shirwal, India, located 65 kilometers from Pune. Through the addition of its new business office in Pune, as well as its new state-of-the-art R&D center, the company is able to help its customers solve problems and create new solutions more rapidly than ever before. Occupying 5000 sq. ft. of the Shirwal manufacturing facility, the new R&D center offers dedicated areas to conduct experiments, run demonstrations and train customers on H.B. Fuller’s hot melt, water-based, anaerobic and cyanoacrylate technologies. Its proximity to the production floor facilitates excellent collaboration between the R&D and the operations teams. The new business office is also home to 50 employees in customer support, business functions, and administrative roles.
In nonwovens investment news, Toray Industries (India) Private Ltd., a subsidiary of Japanese company Toray Industries., broke ground on its new production base in Sri City, India, in 2018. The facility houses two plants—a polypropylene (PP) spunbond plant producing advanced nonwovens used in diaper manufacturing and an engineered plastics resin compounding plant that makes raw materials for electrical components of automobiles and in electrical and electronic connectors.
“The disposable diaper is the largest application in hygiene market, and also the largest item for PP spunbond, so the demand is expected to increase significantly as the economic development increasing personal income to change the lifestyle in India,” says Tatsu Matsushita, general manager of the Performance Nonwoven Products Department of Toray Industries. “In addition, the birth rate is also expected to be high along with the population expansion, the second largest one in the world. So we see many hygiene products manufacturers are aggressively coming and expanding their business in India to look for high performance PP spunbond, which enables [them] to improve their products’ performance in the market.”
The 18,000-ton PP spunbond line was expected to start up in March, however it has been postponed due to the Indian government’s lockdown related to the covid-19 pandemic.
From an in demand growth standpoint, India is clearly the most expected market, Matsushita explains, but at the same time it still premature. “Our simple strategy in India is to build the highest quality supply network locally standing closer to our customers as soon as possible.”
Nan Liu Enterprise, a Taiwanese nonwovens producer, is also expanding with a production site in the country. Outside of India, the company already makes spunlaced and thermal bonded nonwovens at one factory in China and three in Taiwan with a total output between 65,000-70,000 tons per year. The company has produced wet tissue, face mask, gown and drape materials for operating rooms.
The Indian plant is expected to be completed and put into production in the third quarter of this year, and the monthly production capacity will be 600 tons of nonwoven fabrics, 2 million sheets of facial sheet masks, and 3-4 million packs of wet wipes, with an expected annual turnover of NT$ 1 billion after three years, according to the company’s website.
In hygiene news, Japanese manufacturer Unicharm suffered a major setback in the country at the end of June when a massive fire gutted the company’s manufacturing facility located at Sanand near Ahmedabad, according to local reports.
The blaze destroyed the facility, which manufactured products including sanitary napkins and diapers. Fire officials believe that the cause of the fire may never be known, local reports say.
During the time of the fire, about 300 employees were at the site, however, no injuries occurred, according to a statement from Unicharm following the incident.
“We deeply apologize for the tremendous trouble and inconvenience we have caused to people in the area, customers, clients, and partners. For the reason and the damage of the situation for the fire, it is currently under investigation. We have taken this factory fire very seriously and will determine the cause of it and strive to prevent a recurrence.”
Inaugurated in 2018, the Sanand site is the largest facility for the company in India. It also has a plant in Andhra Pradesh.
Latin America
Despite its economic challenges, the Latin American market is considered a region with potential for growth for nonwovens producers and manufacturers that use the materials. In fact, interest has continued to build in the region as hygiene makers all over the globe have made acquisitions and investments in recent years.
European hygiene manufacturers Ontex and Drylock Technologies have both looked to Latin America for growth through acquisition. Ontex established its Americas Division in 2016 after it acquired 100% of the shares of Grupo P.I. Mabe, which had a strong position in the Mexican market, as well as in the U.S. It expanded the Americas Division in 2017 with the acquisition of the personal hygiene business of Hypermarcas in Brazil. Drylock, on the other hand, simultaneously acquired two competing Brazilian personal care companies, Mardam and Capricho, in 2018.
The latest acquisition news in the region happened in June when Japanese hygiene manufacturer Daio Paper Corporation finalized a deal with Marubeni Corporation to jointly acquire indirectly all shares of Santher, a manufacturer of personal care products. A joint investment company established in Brazil called H&PC Brazil Participações S.A, in which Daio and Marubeni hold 51% and 49% stake in Santher, respectively.
In a statement, Daio said it considers the transaction as an attractive opportunity to enter the Brazilian market where demand for consumer goods, including personal care, is expected to significantly increase. Daio’s vision is to extend the business to the entire South American region and furthermore to Southern Africa by capturing customer demands for high value-added products driven by economic growth in the region.
Daio and Marubeni have decided to jointly enter the Brazilian market as they determined the market as attractive, in light of the significant population growth and economic development of the country, and anticipated notable demand growth for consumer goods including personal care products.
The Brazilian H&PC market is the fourth largest market in the world, with household paper products and disposable diapers marking an annual growth rate of 5.6% and 5.4% respectively over the last five years, and continued growth of the market is expected moving forward, given that penetration rates of such products would increase driven by population growth, economic development and higher living standards. Since it should take significant number of years to gain market share and to generate profit organically through a greenfield investment, Daio and Marubeni believe a takeover of a promising local company will be an effective measure.
Santher has engaged in the sales and manufacturing of personal care products such as household paper, disposable baby diapers and sanitary napkins in Brazil for over 80 years. Brand awareness of the company’s products is notably high throughout Brazil and the company holds a strong position as a market leader in the Brazilian household paper market, and out of the local companies, holds the top share of disposable diapers and sanitary napkins.
In nonwovens news, Brazilian nonwovens producer Fitesa acquired Freudenberg’s South American hygiene nonwoven business in February. Freudenberg, which has had success in Brazil with nonwovens for the regional South American hygiene market since 1985, said that over the past few years, the hygiene market has shifted from a regional market to a global one. “Fitesa is geared to the global hygiene market. Under this set up, our current regional business can perform better and grow long-term in the new structures,” Dr. Frank Heislitz, CEO Freudenberg Performance Materials, said at the time of the announcement.
The Fitesa Jacareí site produces mainly carded ATB nonwovens for hygiene applications. Fitesa also produces nonwovens at four production units in Latin America—in Gravataí and Cosmópolis, Brazil, Peru and Mexico.
According to Mariana Mynarski, corporate marketing, Fitesa, the main challenge in South America today is that the region is still recovering. “Our success in this turbulent market can be partially attributed to our history in the market and our management culture,” she says. “Fitesa has been a reliable partner for local/regional hygiene and healthcare manufacturers since the 1990s, always focusing on the long term business relationships. We have also been able to implement a discipline of cost reduction and continuous improvement that has proven to be key in overcoming stress periods like the one the world is facing now.”
As any emerging market, the economic and political developments in South America have a significant impact in the consumption of hygiene products such as diapers, she adds. “Being responsible for approximately 50% of the total South American demand, the Brazilian market instability has significantly impacted the region’s growth for several years now. Although we are optimistic about the future, we are not forecasting strong growth rates in the short term for any hygiene market segment.”
Since the beginning of the pandemic, Fitesa has made adjustments to its capacity worldwide, and increased production of nonwovens for surgical and respiratory protection. “Maybe the largest impact until now was in Brazil, where we operate specialized equipment such as 100% meltblown, lamination and spunmelt machines prepared to produce high barrier products,” Mynarski says. “Before the pandemic we were already important suppliers for the country’s healthcare industry, and our actions made it possible to increase production by three times.”
Fitesa has also applied this specialized capability in the production of surgical face masks and N95 respirators that were donated to hospitals in the country. Additionally, Fitesa announced investment in new capacity and implemented several initiatives to maintain its operations running while keeping its workforce safe.
Southeast Asia
According to Euromonitor International, Asia-Pacific is currently the largest market for retail disposable hygiene products. The market tracker says this is supported by an ample yet not fully tapped consumer base, rising awareness and availability of products and increasing spending power. Within Asia-Pacific, Southeast Asia (SEA) brought in $5 billion in retail sales in 2019, and over the next five years, SEA is expected to see healthy growth in retail, at a CAGR of 8%.
Hygiene maker Vinda is taking advantage of positive growth prospects in the region. Last year Vinda Group Southeast Asia (Vinda SEA) launched the construction of its regional headquarters in Malaysia. Located on 27-acres, the new site will comprise a double-story manufacturing plant with raw material warehouse, a finished goods warehouse, the Vinda Innovation Centre and a six-story administration block to be implemented in phases, in line with Vinda’s five-year plan.
The regional hub will develop, manufacture, and/or market four different product categories, namely baby care, incontinence care, feminine care and tissue products. Drypers, Tena, and Libresse are currently the market leaders, while Vinda Deluxe is seeing strong growth momentum in the markets since the 2017 launch. This facility will serve mainly the Southeast Asian market, and support sales to more than 25 countries, with Malaysia being the strongest market.
Besides being the regional hub for Vinda International’s activities in Southeast Asia, including support for sales, technology, marketing and finance functions, the headquarters will house the Vinda Innovation Centre, the only one outside China.
The Vinda Innovation Centre has full in-house capabilities with a broad set of experts for innovation, product development, and marketing. The center will also follow strict international standards for product development consistent with practices followed by Vinda China and Essity, which is the majority shareholder of Vinda International Holdings Limited.
The first phase of the plan is expected to be complete in 2021, when the warehouse will also be operational. The second phase is expected to be complete by 2023, with manufacturing facilities and the Innovation Centre to be in operation by then.
Unicharm, meanwhile, is reporting success in Thailand where its sales in baby care continue to grow at a steady rate, supported by moves to expand distribution channels through direct sales and by a shift to premium products. In its 2019 Integrated report, the company said its share in the market was roughly 60%. Including DSG International (Thailand), which it acquired in September 2018, Unicharm is the dominant player in the Thai market with a combined share of around 87%.
DSGCL Group manufactures disposable diapers for babies and adults, with locations in Thailand, Malaysia, Indonesia and Singapore. DSGCL’s baby diaper brands include BabyLove, Fitti and PetPet, while its adult diaper brands include Certainty. According to Unicharm, the integration of the DSGCL Group expands and improves its product lineup, enhances its market position and realizes the economies of scale in the Southeast Asia region, particularly in Thailand and Malaysia.
On the nonwovens side, Fitesa is expanding its operations in Southeast Asia after it acquired a 51% stake in Rayong, Thailand-based CNC International in 2018, which marked its first entry into the fast-growing market.
Last year, the company announced a $70 million investment in a new spunbond line at joint venture, now called CNCFitesa. Prior to the acquisition, CNC operated two spunmelt sites in Rayong as well as a sales office in Tokyo, from which it largely supplies the hygiene market.
According to Fitesa’s Mynarski, the new machine is expected to start up in S2 2020, increasing its total capacity in Asia close to 90 kMT/year. “In addition to being one of the fastest-growing markets in the world, Southeast Asia has important regional hygiene players that we would not be able to serve with the desired cost and service levels from other locations where we already operate,” she says. “We believe in being close to our customers, and Southeast Asia was a natural next step in order to strengthen this position.”
As any developing market, the main growth driver in Southeast Asia remains economic development and urbanization, Mynarski adds, and diaper penetration there is still considered low. “In this scenario, economic and political uncertainty remains a key challenge for realizing this growth. Another important challenge is to manage the balance between cost accessibility and innovative features. In fact, this has been one important driver within our innovation centers – to develop solutions that can be effectively adopted by customers, and do not ‘die’ inside our laboratories.”
Meanwhile, Asahi Kasei is expanding production capacity for spunbond nonwovens in Thailand with the addition of a new production line at its subsidiary Asahi Kasei Spunbond (Thailand) Co., Ltd. The third line will add 15,000 tons per year to the total capacity bringing the site’s total output to 50,000 tons. Since entering the spunbond business in 1973, Asahi Kasei has supplied Eltas spunbond for use in a wide variety of applications including disposable diapers and other hygiene products, automotive and other industrial applications and deodorizing sheets and other consumer products. Asahi Kasei has expanded the spunbond business with two production sites in Japan in Moriyama, Shiga, and Nobeoka, Miyazaki as well as AKST in Thailand since 2012.
AKST started operation of its second production line in 2016 to meet rapidly growing demand for spunbond for diaper applications in Asia. The third line will further reinforce AKST’s capability to meet ongoing demand growth with higher product performance, quality, and cost competitiveness. It is expected to start up in July 2021.
Another arm of Asahi Kasei, Asahi Kasei Asia Pacific Co., Ltd. (AKAP), began operating last year as Asahi Kasei’s regional headquarters for business in the ASEAN region.
Asahi Kasei currently has 16 entities in five ASEAN countries. With its steady population growth and ongoing economic expansion, the company said ASEAN is not only an important region for manufacturing but is also becoming a key market. As economic activity continues to advance in this region of diverse languages, commercial customs, and legal systems, regulatory requirements for business operation are advancing apace. It was therefore determined that a regional headquarters for Asahi Kasei Group operations in the ASEAN region would enable increasingly diverse and complex risks to be effectively managed.
Located in Bangkok, Thailand, AKAP will contribute to further growth of the Asahi Kasei Group’s business in the ASEAN region through enhanced marketing and management functions while supporting the operations of each entity, advancing human resources development, facilitating coordination among the different entities and raising operational efficiency.