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Nonwovens and their end products show the greatest growth potential in emerging markets, where market penetration is much lower than in mature markets, and driven by factors such as rising disposable income and population growth. Consumption rates for baby diapers, feminine hygiene products and adult incontinence products remain low in these regions. Although many regions face economic, cultural and logistical challenges, manufacturers of nonwovens and their end products are working hard to ensure that they are able to seize future growth opportunities in emerging markets.

 

Africa

 

Emerging economies in Africa are providing new opportunities for manufacturers of nonwovens and related industries as they seek the next engine of growth. With the increase of income level and the increasing popularity of health and hygiene related education, the utilization rate of disposable hygiene products is expected to further increase.

 

According to the research report "Outlook 2024: The Future of the Global Nonwovens Industry" (TheFutureofGlobalNonwovensto2024) released by market research company Smithers, the African nonwovens market will account for about 4.4 percent of the global market share in 2019. As the growth rate of all regions is lower than that of Asia, Africa is expected to decline slightly to about 4.2 percent by 2024. Production in the region was 441200 tons in 2014 and 491700 tons in 2019, and is expected to reach 647300 tons in 2024, with annual growth rates of 2.2 per cent (2014-2019) and 5.7 per cent (2019-2024), respectively.

 

In particular, South Africa has become a hotspot for nonwovens producers and hygiene companies. In view of the growth of the hygiene products market in the region, PFNonwovens recently invested in a 10000-ton Reicofil production line in Cape Town, South Africa, which began full commercial operation in the third quarter of last year.

 

 

PFNonwovens executives said the investment gives it the ability to expand its customer base not only by offering products to its existing global customers, but also by offering quality nonwovens to smaller, local producers of disposable hygiene products.

 

Spunchem, South Africa's leading nonwovens manufacturer, has also taken advantage of the growth in the hygiene products market by increasing its factory capacity to 32000 tons per year in response to the expected growth in the South African hygiene products market. The company announced its entry into the sanitary products sector in 2016, making it one of the first local spunbonded nonwoven suppliers in the region to serve the sanitary products market. Previously, the company focused primarily on the industrial market.

 

According to the company's executives, the decision to establish the Hygiene Products Business Unit was based on the following reasons: All high-quality SS and SMS materials for hygiene products in South Africa come from imported channels. In order to develop this business, Spunchem worked closely with a leading diaper manufacturer, which included extensive trials of Spunchem-made materials. Spunchem also improved coating/laminating and printing capabilities to produce two and four color base materials, cast films and breathable films.

 

Adhesive manufacturer H.B.Fuller is also investing in South Africa. The company announced in June the opening of a new business office in Johannesburg and a logistics network of three warehouses across the country to support their ambitious growth plans in the region.

 

"Localizing our presence in South Africa allows us to provide our customers with outstanding localized products not only in the hygiene market, but also in markets such as paper processing, flexible packaging and labeling, thereby helping them gain more competitive advantage with adhesive applications." The company's South Africa operations manager RonaldPrinsloo said.

 

Prinsloo believe that due to low per capita use and high birth rates, there is still a great opportunity for growth in the African hygiene products market. "In some countries, only a small number of people use disposable hygiene products in their daily lives. This is due to multiple reasons such as education, culture and affordability." He added.

 

Factors such as poverty and culture are likely to influence the growth of the hygiene products market, but Prinsloo noted that increasing opportunities and rising salaries for women are driving demand for feminine care products in the region. In Africa, H.B.Fuller also has manufacturing facilities in Egypt and Kenya.

 

Multinationals Procter & Gamble and Kimberly-Clark have long had hygiene products on the continent, but in recent years other foreign companies have begun to join in.

 

Turkish consumer goods manufacturer HayatKimya has become a leader in the region since it launched its premium diaper brand Molfix in Nigeria, Africa's most populous market, five years ago. Last year, Molfix expanded its product range by adding pants-style products.

 

 

Meanwhile, in East Africa, HayatKimya recently entered the Kenyan market with two Molfix diaper products. At the launch, HayatKimya Global CEO AvniKigili expressed his desire to become the market leader in the region within two years. "Kenya is a developing country with a growing young population and the potential to grow as a strategic location in central and eastern Africa. We want to be part of this rapidly modernizing and developing country through the high quality and innovation of the Molfix brand." She said.

 

Ontex is also working to tap growth potential in East Africa. Three years ago, the European hygiene products manufacturer opened a new production plant in Hawassa, Ethiopia.

 

In Ethiopia, Ontex's Cantex brand specializes in baby diapers for African families. The company said the plant was an important step in Ontex's growth strategy and increased the availability of its products in developing countries. Ontex became the first international manufacturer of hygiene products to open a factory in the country. Ethiopia is the second largest market in Africa and can radiate the entire East African region.

 

"At Ontex, we strongly believe in the importance of our localization strategy," explained Ontex CEO CharlesBouaziz at the opening. "This allows us to respond efficiently and flexibly to the needs of consumers and customers. Our new plant in Ethiopia is a good example of this. It will help us to better serve the African market."

 

In Africa, Ontex also manufactures baby and adult care products at its production site in Algeria, which opened in 2008.

 

ObaOdunaiya, director of operations and procurement at WemyIndustries, one of Nigeria's oldest sanitary products manufacturers, said that the absorbent sanitary products market in Africa is gradually growing, and many local and foreign manufacturers have entered the market. "People are becoming more aware of the importance of personal hygiene. Therefore, governments, NGOs and individuals have taken various initiatives. Therefore, there is a growing demand for sanitary towels and diapers that are cost-effective and beneficial to human health." He said.

 

Wmy currently produces baby diapers, baby wipes, adult incontinence products, nursing pads, disinfectant wipes and maternity pads. Wemy's adult diapers are its latest product release.

 

India

 

Income levels and population growth in India, the world's second most populous country, have risen significantly. As governments and industry continue to promote modern hygiene practices, demand for products such as baby diapers and feminine hygiene products is expected to grow.

 

H.B.Fuller's Director for India, the Middle East and Africa, HarshGupta, said that India's hygiene products market continues to grow rapidly in all segments, mainly due to increased disposable income, increased number of women in employment, further awareness and education activities, and numerous government and non-governmental organization initiatives. "In such a vast and diverse market as India, there are plenty of opportunities for manufacturers to innovate to meet niche and newly discovered needs."

 

 

Gupta explained that more and more advertising and promotions have made consumers more aware of the convenience and importance of hygiene products, which has stimulated demand growth. "For example, leading manufacturers are campaigning by working with schools and NGOs to educate consumers on the importance of using hygienic products. They send out a lot of samples to encourage consumers to use these products, especially in rural areas of India."

 

The government also plays an important role in raising hygiene awareness among the rural population, he added. "Sanitary napkins are now available through a variety of sales channels, including grocery stores, pharmacies, supermarkets, health and beauty shops and even vending machines at train stations."

 

In terms of investment in nonwovens, TorayIndustries, a subsidiary of the Japanese TorayIndustries, broke ground in 2018 at its new production site in Sri City, India. The base has two factories, of which the polypropylene spunbond nonwovens factory produces high-quality non-woven materials for diapers.

 

Mr. TatsuMatsushita, general manager of TorayIndustries's high-performance nonwovens business department, said: "Diapers are the largest application area of the sanitary products market and the largest market for polypropylene spunbond materials. With economic development, the increase in personal income and the change of lifestyle in India, the demand for PP spunbond fabrics will greatly increase. In addition, with the population growth, the birth rate is also expected to reach the second in the world. Therefore, we see that many sanitary products manufacturers are actively entering the Indian market to expand their business, and they are also looking for high-performance polypropylene spunbond materials to improve their product performance." The 18,000-ton PP spunbond production line was originally scheduled to start in March, but was delayed due to the blockade caused by the new crown epidemic.

 

Matsushita explained that India is clearly the most anticipated market from the perspective of demand growth, but at the same time still needs to be patient. "Our strategy in India is very simple. It is to establish the best quality supply network locally as soon as possible, so that we can get closer to our customers."

 

Nonwovens manufacturer Nanliu Enterprise is also expanding through its production base in China. Outside India, the company produces spunlaced and thermally bonded nonwovens at a plant in China and three plants in Taiwan, with a total annual output of between 6.5-70000 tons.

 

The Indian factory in Nanliu is expected to be completed and put into production in the third quarter of this year, with a monthly production capacity of 600 tons of non-woven fabrics, 2 million facial masks and 300-4 million wet wipes. The annual turnover is expected to reach NT $1 billion in three years.

 

In the hygiene products market, Japanese manufacturer Eunice reportedly suffered a major setback in India at the end of June when a fire destroyed the company's manufacturing plant in Sanand (near Ahmedabad). The factory produces products including sanitary napkins and diapers. After the fire broke out, Eunice said that there were about 300 employees at the scene during the fire, but fortunately no one was injured.

 

Sanand's factory, which opened in 2018, is the largest of its kind in India. The company also has a factory in Andhra Pradesh.

 

Latin America

 

Despite economic challenges, Latin America is still considered a region with growth potential by manufacturers of nonwovens and their end products. Indeed, global hygiene manufacturers have continued to make acquisitions and investments in the region in recent years.

 

European hygiene products makers Ontex and DrylockTechnologies are both looking to grow in Latin America through acquisitions. Ontex established its Americas division in 2016 after acquiring a 100 percent stake in Grupo P.I.Mabe. Mabe has a strong presence in both the Mexican and US markets. In 2017, Ontex expanded its Americas business with the acquisition of the Hypermarcas personal hygiene products business in Brazil. On the other hand, Drylock acquired two Brazilian personal care companies, Mardam and Capricho, in 2018.

 

The latest acquisition in the region came in June, when Japanese hygiene products producer Daiwang (DaioPaperCorporation) struck a deal with MarubeniCorporation to set up a joint venture in Brazil called H & PCBrazilParticipa S.A through the indirect acquisition of all shares in personal care products manufacturer Santher, in which Daiwang and Marubeni hold Santher51 and 49% of the shares, respectively.

 

King said in a statement that the deal is an excellent opportunity to enter the Brazilian market, where demand for consumer goods, including personal care products, is expected to increase significantly. Daiwang's vision is to expand the business to the entire South America region and then to southern Africa by seizing the growth opportunities of customers' demand for high value-added products in the region.

 

Considering the country's massive population growth and economic development, as well as the significant growth in demand for consumer goods, including personal care products, King and Marubeni decided to enter the hugely attractive Brazilian market together.

 

Brazil's hygiene and personal care market is the fourth largest in the world, with annual growth rates of 5.6 percent for household paper products and 5.4 percent for disposable diapers over the past five years. In the region, population growth, economic development and higher living standards will drive the popularity of such products. King and Marubeni take a lot of time and effort to gain market share and generate profits, so buying a promising local company would be an efficient move.

 

Santher has been selling and manufacturing personal care products in Brazil for more than 80 years, including household paper products, disposable baby diapers and sanitary napkins. Throughout Brazil, the company has a high brand awareness, with Santher having the highest share of disposable diapers and sanitary napkins among local companies.

 

In the field of nonwovens, Brazilian nonwovens producer Fitesa acquired the Eisai business of Freudenberg in South America in February. Since 1985, Cordberg has been successfully supplying non-woven materials in Brazil for the sanitary products market in South America. Over the past few years, the Eisai market has transformed from a regional market to a global market. "Fitesa faces the global Eisai market. In this case, our current regional business can perform better in the new structure and develop in the long term." Dr. FrankHeislitz, Chief Executive Officer of Codbo Performance Materials, said.

 

Fitesa also produces nonwovens at four production sites in Latin America, located in Brazil, Peru and Mexico.

 

Fitesa's MarianaMynarski believe that the main challenge in South America today is that the region is still recovering. "Our success in this volatile market can be attributed in part to our history in the region and our management culture," she said. "Fitesa has been a reliable partner to health and medical manufacturers in the region since the 1990 s. We have also been able to help our customers reduce costs and continuously improve our products, which has proven to be key to overcoming the pressures facing today's world."

 

As with any emerging market, economic and political developments in South America have had a significant impact on consumption of hygiene products such as diapers, she added. "The instability in the Brazilian market has affected growth in the region for several years. Although we are optimistic about the future, we do not expect strong growth in any of the health and medical markets in the near term."

 

Southeast Asia

 

According to Euromonitor International (EuromonitorInternational), the Asia-Pacific region is currently the largest market for disposable hygiene products. There is a large but not fully developed consumer base, increasing consumer awareness and availability, and increasing consumption power. The Southeast Asia market (SEA) achieved $5 billion million in retail sales in 2019, and retail sales in the region are expected to grow at a healthy CAGR of 8% over the next five years.

 

Hygiene producer Vida is also confident about the region's growth prospects. Last year, Vida Group Southeast Asia (VindaSEA) launched the construction of its Southeast Asia headquarters in Malaysia. The new 27-acre site will include a manufacturing facility with raw material warehouses, a finished goods warehouse, the Vida Innovation Center and a six-story administrative office building.

 

The headquarters will develop, manufacture and market four different product categories, namely baby care, adult incontinence, feminine care and paper products. Drypers, Tena and Libresse are currently the market leaders in the region, while VindaDeluxe has seen strong market growth since its launch in 2017. The plant will primarily serve the Southeast Asian market and support more than 25 countries, with Malaysia being the strongest growing market.

 

The headquarters is not only a regional hub for Vinda International's activities in Southeast Asia, including support for sales, technology, marketing and finance functions, but also houses the Vinda Innovation Center, the only innovation center outside China.

 

VindaSEA Chairman Jenny Xu said at the groundbreaking ceremony that the Southeast Asia headquarters will not only be able to bring together Malaysian expertise and high-value activities, but will also promote the global competitive advantage of the entire group through the use of the latest technologies and new processes. VindaSEA also estimate that when the headquarters facility is fully operational, it will further increase capacity revenue by 20%.

 

In line with the five-year plan blueprint set by Vida Group, the first phase is expected to be completed in 2021, when the warehouse will also be put into operation. The second phase is expected to be officially completed in 2023, when the production facilities and innovation center will be put into operation.

 

At the same time, Eunice has grown steadily in the Thai market, and sales of its baby care products continue to grow at a steady rate, thanks to the expansion of distribution channels through direct sales and the move to high-end products. The company said in its 2019 comprehensive report that its market share is about 60%. Like DSGInternational (Thailand), which they acquired in September 2018, Euneja has been a dominant player in the Thai market, with a market share of approximately 87% after the acquisition.

 

DSGCL Group has baby and adult diaper manufacturing facilities in Thailand, Malaysia, Indonesia and Singapore. DSGCL's baby diaper brands include BabyLove, Fitti and PetPet, while adult diaper brands include Certainty.

 

In the nonwovens segment, Fitesa acquired a CNCInternational51 stake in the Thailand-based company in 2018, marking its first entry into this fast-growing market, thereby expanding its presence in Southeast Asia. Last year, the company announced that its joint venture CNCFitesa to invest $70 million in a new spunbond production line.

 

Fitesa's Mynarski said the new line is expected to be operational in the second quarter of 2020. "Southeast Asia is not only one of the fastest growing markets in the world, many important producers of hygiene products are also investing here, and it is difficult for us to provide services in other locations at the required cost and level of service. We firmly believe that maintaining closer relationships with our customers is very important, and Southeast Asia is a natural next step in consolidating this position," she said."

 

Mynarski added that as a developing market, Southeast Asia's main growth drivers are still economic development and urbanization, and the penetration rate of diapers here is still very low. "In this context, economic and political uncertainty remains a key challenge to achieve this growth. Another important challenge is the balance between managing costs and the innovation function. In fact, this has become an important driving force for our innovation center, developing solutions that can be effectively adopted by customers and that are able to bear fruit outside the laboratory."

 

At the same time, Asahi Kasei's Thai subsidiary AsahiKaseiSpunbondThailand Company (AKST) added a new production line, thereby expanding its spunbonded nonwoven production capacity in Thailand. The third production line will increase the total capacity by 15000 tons per year, bringing the total output of the plant to 50000 tons. Since entering the spunbond field in 1973, Asahi Kasei's Eltas spunbond products are widely used in disposable diapers and other hygiene products, automotive and other industrial applications. Asahi Kasei has expanded its spunbond business since 2012 at two production sites in Moriyama City, Shiga Prefecture, Japan, Yeoka City, Miyazaki Prefecture, and AKST, Thailand.

 

AKST began operating its second production line in 2016 to meet the demand for spunbond materials in the rapidly growing Asian diaper market. The third production line will further enhance AKST's ability to improve competitiveness with higher product performance, quality and cost to meet growing demand. The line is expected to start in July 2021.

 

Asahi Kasei's other branch, AsahiKaseiAsiaPacific(AKAP), which began operations last year, is Asahi Kasei's regional headquarters in the ASEAN region.

 

Asahi Kasei currently has 16 entities in five ASEAN countries. With steady population growth and continued economic expansion, ASEAN is not only an important manufacturing region, but is becoming a key market, the company said. Asahi Kasei's regional headquarters in the ASEAN region will enable the region's increasingly diverse and complex risks to be effectively managed.

 

Located in Bangkok, Thailand, AKAP will strengthen marketing and management functions while supporting the operation of each entity enterprise, developing human resources, promoting coordination between different entities and improving the level of operation, so as to promote the business development of Asahi Kasei Group in the ASEAN region.

 

 

 

This article is selected from NonwovensIndustry magazine

 

Author: TaraOlivo