K-C eying greater investment in Thailand to expand its baby and child-care business, company executive says
April 4, 2014
– US personal care giant Kimberly-Clark is eyeing greater investment in Thailand to expand its baby and child care business.
"Thailand is our important market in the region, along with China and India," said Achal Agarwal, president for Asia-Pacific. "We're committed to long-term investment here and will bring more innovative products to serve Thai people."
Asked whether the current political turmoil has hurt Kimberly-Clark's business in Thailand, Mr Agarwal spoke of a short-term effect on consumer sentiment. The business plan will not change and the company will continue to invest here.
Kimberly-Clark entered the Thai baby and child care market in earnest with the launch of Huggies Ultra diaper pants in February. Some 700,000 babies are born in Thailand each year.
The diaper market in Asia-Pacific is one of the fastest-growing categories in consumer goods. According to Transparency Market Research, the global disposable baby diaper market will reach US$52.2 billion (1.695 trillion baht) in 2017, with Asia-Pacific accounting for 30%.
Last year, the Thai baby diaper market grew by 7.5% to $317 million. The pants category, which contributed 78% in value, saw 18% growth, while diapers, representing 22%, fell by 18%.
The research house says pants will make up 80% of the Thai market this year, on a par with Japan.
Mr Agarwal said Thailand, like other countries in the region, will continue to enjoy healthy growth, especially in the high-end pants segment as Thai mothers seek innovative products for their babies' comfort.
Changing lifestyles and consumer behaviours are key factors driving the diaper market in terms of quantity and value.
With the launch of Huggies Ultra baby diaper pants, Kimberly-Clark Thailand expects double-digit growth in 2014 and 2015.
"The business expansion in Thailand will help Kimberly-Clark Asia-Pacific grow tremendously in the next few years," Mr Agarwal said during a visit to Bangkok last week. "Our global sales were $21.2 billion last year, and $3 billion came from Asia-Pacific. The region hopes to triple sales by 2020."
The launch of Huggies Ultra baby diaper pants got a warm response from Thai consumers. The diaper pants are imported from a factory in South Korea, where Kimberly-Clark has its research and development centre.
The product claims to be slim yet absorbent for both day and night wear.
Mr Agarwal said the focus for Kimberly-Clark Thailand is to establish Huggies as a strong brand with Thai moms. After that, the group will bring in more innovative products for Thai consumers. It may bring back Kotex sanitary napkins for women.
Kimberly-Clark's Scott and Kleenex brands are market leaders in the facial tissue market. Thailand is the Asean production hub for facial tissue.
Asked whether Kimberly-Clark is interested in setting up diaper production in Thailand, Mr Agarwal said he would evaluate the success of the Huggies brand first.
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