The 2000 Baby Diaper Market a review of the year in the disposable baby diaper market

The 2000 Baby Diaper Market a review of the year in the disposable baby diaper market

Arrayanes

Disposable baby diaper producer Arrayanes, Rio Grande do Sul, Brazil–which manufactures products under the “Arrayanes” name–has broken ground at the site of its new plant in Escada City, Pernambuco. The new facility will have an annual capacity of 325 million units, including 150 million units of baby diapers, 130 million units of sanitary napkins and 48 million units of adult incontinence products.

Benetton

Earlier this year Italian clothing manufacturer Benetton, Treviso, Italy, planned to introduce a line of disposable baby diapers under its own brand name. The new color printed diapers will be manufactured by Brazilian-based Ever Green Industria e Comercio for Benetton, with first-year capacity expected to reach 16 to 17 million units.

Clin Off do Brasil

Argentinean manufacturer Clin Off do Brasil, Oliveira City, Minas Gerais, has invested $4.2 million to modernize and increase the capacity of its production line located in Oliveira City. The company produces both disposable baby diapers and wet wipes.

Consobiz

Consobiz Ventures Sdn Bhd, Selangor Darul Ehsan, Malaysia, plans to relocate to a new facility in May that is three times larger than its current plant. This move is reportedly due to the company’s recent purchase of a second baby diaper line from Fameccanica.Data, Chieti, Italy, which is currently being assembled at the new plant. Once the new line is up and running, Consobiz intends to disassemble its current line and transfer it to the new facility.

Drypers

One company making headlines this year was private label diaper maker Drypers, Houston, TX. Drypers recently faced a lawsuit issued by Procter & Gamble, Cincinnati, OH, for alleged infringement of two disposable diaper patents. In papers filed in the Delaware U.S. district court, P&G alleged that Drypers diapers infringed on its patents for a “disposable absorbent article having elasticized flaps provided with leakage resistant portions” and a “disposable garment with breathable leg cuffs.” In a second suit, P&G alleged that Drypers’ private label unit owes P&G $4.1 million under its licensing arrangements.

In response to such lawsuits, Drypers filed a voluntary petition to reorganize under Chapter 11 of the U.S. Bankruptcy Code in the Southern District of Texas. The company also received court approval for $25 million in debtor-in-possession financing from Fleet Capital, Atlanta, GA, that will allow it to meet its daily operations obligations. In addition, Drypers has reportedly reached a licensing agreement with P&G, which allows Drypers to continue manufacturing its products. The company may also enter into a payment plan to resolve P&G’s disputes and litigations, a move that is subject to approval by the bankruptcy court.

On the South American front, Drypers’ Sao Paulo subsidiary, Drypers Conforto e Absorcao, has begun offering a new disposable baby diaper under the brand name “Puppet.” The new diaper has 15% more superabsorbent material than other diapers, as well as a reinforced impermeable barrier. The investment for this new product reportedly totaled $1.5 million.

Hospital Specialty/RMED

Hospital Specialty Company, Cleveland OH, and RMED International, Eau Claire, WI, have formed a strategic alliance to manufacture and market a complete line of national brand equivalent private label baby diapers. The product line includes basic, ultrathin and supreme styles in sizes one through six. Training pants are also available in medium and large sizes.

Isolyser/Consolidated Ecoprogress

In a move that could represent a major breakthrough for disposable baby diapers, specialty medical product manufacturer Isolyser, Norcross, GA, and Consolidated Ecoprogress, Vancouver, Canada, have signed an agreement for the manufacture and marketing of a biodegradable diaper. In addition, the companies plan to work together to develop a disposal system that will allow the diaper to be flushable. Isolyser and Consolidated Ecoprogress are also in discussions with an additional partner for R&D and technical assistance.

Kimberly-Clark

Another baby diaper producer involved in litigation this year was Kimberly-Clark, Dallas, TX. The company filed a suit against Paragon Trade Brands, Norcross, GA, for allegedly infringing on its patents for the manufacture of disposable training pants. K-C claims that Paragon’s training pant product “embodies” its patent used in the manufacture of its “Huggies Pull-Ups” training pants. K-C sought a court order barring Paragon from further alleged infringement and seeking an award of unspecified triple damages.

In its European markets, K-C raised its prices to cope with a falling Euro and higher oil prices. The company has reportedly raised prices for its products, which include “Huggies” disposable baby diapers, three times this year throughout much of Europe. Last year European sales comprised 16% of K-C’s $13 billion worldwide sales.

In recent television advertising efforts, K-C has signed an agreement with children’s cable network Nickelodeon, New York, NY for advertising name brands such as “Huggies,” “Little Swimmers” and “Baby Wipes.”

At the third annual “Best of the Year Awards” sponsored by American Baby magazine, New York, NY, K-C’s “Huggies Supreme” diapers were voted one of the 15 top new infant products of 2000.

‘Nature Boy & Girl’

Newly introduced is the environmentally friendly and highly compostable “Nature Boy & Girl” baby diaper. The diaper was created by Swedish attorney and mother of two Marlene Sandberg. The thinner and less bulky diapers are waterproof with a breathable cornstarch-based backsheet and include chlorine-free pulp. The diaper’s backsheet is 100% compostable, meaning it loses 85% of its weight in 45 days in a composting environment. During that time, 70% of the diaper will decompose, degrading more quickly than other disposable diapers.

Paragon

In a move that brought closure to a much-publicized battle with bankruptcy, late last year private label baby diaper manufacturer Paragon Trade Brands, Norcross, GA, officially exited Chapter 11 status. Investors led by Wellspring Capital Management, New York, NY, purchased the company in accordance with Paragon’s modified second amended plan of reorganization, which was previously approved by the U.S. Bankruptcy Court of the Northern District of Georgia. Under the plan, Wellspring purchased about 97% of new common stock for approximately $115 million in cash with the balance going to former shareholders. According to Paragon, the company can now better focus on serving customer needs with new and improved products and marketing initiatives.

The company also plans to increase its focus on its baby diaper segment by divesting its feminine hygiene business.

Pom Pom Productos

Pom Pom Productos Higienicos, Sao Paulo, Brazil, has launched a new disposable baby diaper line under the brand name “Protek.” The new diaper includes adjustable leakage barriers.

Procter & Gamble

Late last year, Procter & Gamble, Cincinnatti, OH, along with market rival Kimberly-Clark, Dallas, TX, initiated an industry-wide diaper price increase when it upped its diaper prices by an average of 6% to offset raw material price increases. Both companies have reduced the number of diapers included in each package by an average of 13% while cutting prices by 7% to achieve the resulting 6% hike. The move was reportedly a result of heightened prices for pulp and oil-based products as well as absorbency improvements.

As for new products, P&G entered the disposable swimpants arena with the launch of “Luvs Splashwear” disposable swimpants for boys and girls. The swimpants–which were launched in May–feature an easy pull-on/pull-off design with a 3600 stretch elastic waistband for excellent comfort and fit, tear-off sides and a non swelling minimal absorbency core.

In other news, P&G recently broke ground on an expansion to its manufacturing facility in Mehoopany, PA. The $350 million expansion will result in 350 new jobs, bringing total employment at the plant to nearly 3000. The Mehoopany site–P&G’s largest plant in the world–manufactures Pampers and “Luvs” baby diapers as well as “Charmin” bathroom tissue and “Bounty” kitchen towels. In terms of equipment, P&G will add two new paper machines and other unspecified equipment.

On the marketing front, last year P&G introduced a new advertising campaign for its Pampers disposable baby diapers in an effort to broaden the appeal of its advertising to a younger, more diverse consumer population. The ads move away from traditional images of babies, packaging and diapering demonstrations toward depictions of relationships between animal parents and their offspring. P&G has also replaced the current Pamper’s theme of “Pamper the skin they’re in” with “We’re right behind you every step of the way.”

In additional Pampers news, P&G teamed up with the nonprofit educational organization Sesame Workshop, New York, NY, to introduce the latest line of Pampers diapers. The new “Pampers Premium” product features graphics of the Sesame Street Muppets in 16 different designs in four different sizes for children three months to two years. The new product line was scheduled to be available at all major U.S. retailers by October.

In an effort to expand its Pampers product line, P&G has granted a license to baby apparel manufacturer Dana Undies Inc., New York, NY, to make and sell a line of infant layette, children’s clothing and related accessories under the Pampers brand name. The initial clothing line will also include bodysuits, T- shirts, hooded towels, finger-grip washcloths, mittens and booties, receiving blankets, legwear and socks and will be available in sizes newborn to 4T. P&G also licensed its Pampers trademark to Baby Boom Consumer Products–a division of The Betesh Group, New York, NY–for the manufacture of diaper bags for sale in North America. The diaper bags are scheduled to be launched by the first half of 2001 and will be sold through mass merchandisers, specialty toy stores and food and drug retailers.

SCA

Disposable product maker Svenska Cellulosa AB (SCA), Stockholm, Sweden, expects the European Commission to open a four-month investigation into its purchase of a 65% stake in Europe’s fourth largest disposable baby diaper producer Metsae Tissue Oyj, Espoo, Finland, from Finnish company Metsae-Serla Oyj. SCA has offered to scale back its business through the sale of production capacity and some tissue brands to win antitrust clearance for the purchase, but stated it would scrap its agreement to buy Metsae Tissue’s stake if the commission’s demands are too high. Through the purchase, SCA would add Metsae’s “Leni” and “Lambi” brands to its existing roster of products, which includes “Libero” disposable diapers, while Metsae-Serla would take over SCA’s stake in Modo Paper AB, Stockholm, Sweden, which it jointly owns with Holmen AB, Stockholm, in an effort to focus more on paper and packaging.

In other news SCA is seeking U.S. acquisitions for its global expansion efforts. According to the company, it is preparing to do a more intensive and organized job of expanding outside of Europe and can finance $4.1 billion for its expansion plans during the next three years without raising more capital. In Europe, SCA reportedly holds a quarter of the market for hygiene products, including disposable baby diapers and adult incontinence products, and authorities may hinder the company from making bigger acquisitions within Europe due to its already dominant position.

Additionally, SCA is reportedly interested in buying the tissue operations of Fort James, Green Bay, WI. With plans to focus on consumer-oriented products such as diapers and toilet paper, SCA considers Fort James’ tissue operations– which produce incontinence pads for hospitals–potentially complementary to the company’s businesses in the U.S.

Uni-Charm

According to NONWOVENS INDUSTRY Far Eastern correspondent Kin Ohmura, baby diaper manufacturer Uni-Charm, Tokyo, Japan, has seen its marketshare steadily grow in the Japanese market. With control of 47.4% of the baby diaper business in Japan, Uni-Charm holds a lead over Kao (27.3%), P&G Far East (11.6%), Daio Paper (9%) and other baby diaper manufacturers (4.7%).

European Diaper News

In response to allegations made by Greenpeace Germany concerning trace levels of hormone toxin TBT (tributyl tin) in several brands of disposable baby diapers, the European Disposables and Nonwovens Association (EDANA), Brussels, Belgium, has stated that diapers manufactured by its members for European markets are safe. EDANA contends that the levels of the organic tin compound allegedly found in diapers by Greenpeace are within the low parts per billion range, which is several 100-fold below the safe level set by WHO (World Health Organization) and referred to by national health authorities such as BGVV (the German Federal Institute for Consumer Health Protection and Veterinary Medicine). In addition, a recent risk assessment study of such compounds published by the RIVM (Dutch Royal Institute for Public Health and Environmental Safety) concluded that there was no public health concern over the issue. Other European health agencies, including the German Society of Pediatricians and the Danish Environmental P rotection Agency (EPA), stated that the traces of TBT found by Greenpeace are minimal and not a health hazard to babies.

COPYRIGHT 2001 Rodman Publications, Inc.

COPYRIGHT 2008 Gale, Cengage Learning