Unicharm’s ‘inclusive growth’ on track

Japan's Unicharm has started construction of a new US$47 million diaper plant at the Sri City Special Economic Zone in Chennai, India.

The corporation plans to triple its annual production of diapers and feminine hygiene products in Asia, the Middle East and Africa by 2020, by which time it anticipates that more than 40% of its sales will be to low-income consumers in the emerging markets of these regions.

In a groundbreaking move as part of its localisation strategy, the company announced last year that it would employ an additional 8,000 women throughout Indonesia, India, Vietnam, Thailand, Saudi Arabia, and Egypt – nearly doubling its female workforce in these countries.

By localising production, streamlining manufacturing and simplifying packaging, Unicharm plans to offer feminine napkins and diapers to low-income consumers previously unable to afford them.

“Through this initiative, we will expand our reach while alleviating poverty and supporting and empowering millions of women across the Middle East/North Africa and Asia,” said Unicharm CEO Takahisa Takahara at the time. “We are delighted to contribute in this way to sustainable and inclusive development, and to further demonstrate that good business practices and good global citizenship complement each other.”

During 2013 the company has also opened a subsidiary in Brazil to prepare for the production of diapers and also assumed market leadership in Myanmar as a result of the acquisition of Myanmar Care Products (MYCARE) based in Yangon.

It started up its fourth Chinese plant in Tianjin in 2012 and a fifth plant is now under construction in Yangzhou, to supply the northern part of the country. Unicharm is planning to supply southern parts of China from its plant in Hanoi, having become also the market leader in Vietnam with the acquisition of Diana in 2011. A plant in Egypt began operations in December 2012 and a third plant is currently under construction in Surabaya, Indonesia.

The company also has plans to enter the markets of both Mexico and South Africa in the next few years.

All of these activities are in line with the general growth of the absorbent hygiene industry in developing markets, and in parallel to the location of new nonwovens plants to supply them.

In its financial year to March 31 2012, Unicharm reported sales of  Yen 495,771 million (around US$ 5 billion) – up 15.7% on 2012.