Middle East/North Africa region holds major opportunities for such items as disposable diapers, feminine hygiene products and wipes amid rise in disposable spending, industry officials say

, June 16, 2014 () – The Middle East/North Africa region continues to be an area of strong consumer growth and the nonwovens industry is working hard to capitalize on this opportunity with a string of investments throughout the supply chain. Led by investments from diaper makers like Procter & Gamble, in Egypt and Nigeria, and Unicharm, in Egypt, Africa has more recently emerged as the next hotspot for the hygiene market, while the Mid East region has seen significant investment in countries like Saudi Arabia, Turkey and Israel, for the past decade.

The huge opportunity this region holds is due largely to the fact that penetration of many hygiene items is low but disposable spending is rising meaning that more consumers will come to depend on things like disposable diapers, feminine hygiene items and wipes. However, growth in this region comes with significant challenges including political unrest in some countries as well as fluctuations in income levels from one country to the next.

These challenges have not scared away foreign investment. In March, Procter & Gamble opened a new Pampers manufacturing plant in Nigeria, where the company has had operations since 1992. At the plant's opening ceremony, regional P&G president Laurent Philippe expressed P&G's pleasure in being part of Nigeria's growth for the past 20 years and reiterated the company's continued commitment to invest in Nigeria and improve lives there. As P&G's second manufacturing facility in Nigeria, the new plant will create thousands of direct and indirect jobs for Nigerians, fostering the development and expansion of hundreds of small- and medium-sized businesses in the country.

In its initial phase, the plant is dedicated to the production of Pampers, featuring some of the latest advancements in diaper manufacturing technology and the site's large footprint allows for further expansion in the future.

In addition to Pampers, Procter & Gamble makes and markets Ariel, Always, Oral-B and Safegurad brands in Nigeria.

Elsewhere in Africa, P&G has begun operations at a 250,000-square-meter facility in Egypt to make Pampers. Egypt in fact, has emerged as an important country for the nonwovens industry. Japanese hygiene maker Unicharm pledged in 2012 it would bring affordable hygiene products to 36 million low-income women in the Middle East/North Africa and Asian regions as part of the Business Call to Action (BCtA), a global initiative to reduce poverty and promote sustainable development through the development of inclusive business models. In fact, by 2020, 40% of Unicharm's total hygiene products are expected to be manufactured and sold to low-income consumers in the Middle East/North Africa and Asia.


As part of its localization strategy, the company will also employ an additional 8,000 underemployed women throughout Indonesia, India, Vietnam, Thailand, Saudi Arabia and Egypt--nearly doubling its female workforce in these countries.

"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," Unicharm Corp. CEOTakahisaTakahara says."We are delighted to contribute in this way to sustainable and inclusive development and to further demonstrate that good business. Further downstream, several nonwovens makers and suppliers have established operations in Egypt.

Pegas Nonwovens, the Czech Republic's largest nonwovens maker, completed work on a 20,000 ton-per-year line in January. The line, which was announced in 2011, will mainly target the local market, according to executives, and will likely be followed by a second line by 2016.

"We consider the investment in Egypt to represent an important milestone, which moves the company forward from its current position as a major European nonwoven textile manufacturer to that of becoming a company with a more global scope of operation and with a focus on fast growing developing markets," CEO Frantizek Rezac says.

Currently, 46% of sales are conducted in Western Europe while sales to Central and Eastern Europe and Russia represent 49% of sales. Sales outside of these regions amounted to 5% but the new line, which was based on a long-term delivery agreement with one of its customers, is expected to boost sales outside of Europe.

Also in Egypt, Turkey's Gulsan has a new line, which is currently in the installation phase. This new investment represents 20,000 tons of nonwovens that will likely target the MENA region. In announcing the new line in late 2012, the company said the decision to invest in Egypt will support its future growth in the industry and the region and reinforces the company's position as one of the leading manufacturers of spunmelt materials in EMEA (Europe, Middle East and Africa).

On the raw material front, adhesives supplier Bostik has also established an operation in Egypt with the hopes of targeting not only the domestic Egyptian market but also creating a regional hub for supply into Turkey, the southern parts of the Mid East and the northern parts of Africa. According to Fhul Andrews, market manager-Europe, Middle East, Africa, for Bostik, there is a range of hygiene manufacturers with varied needs in the region/'There is a very big spectrum of product types throughout the region,"he says. "The smaller producer might be using less sophisticated products while a global player may be incorporating premium types of features."

According to Euromonitor, the Egyptian market is led by multinationals with P&G leading the market due to its long standing presence in the both the diaper and feminine hygiene markets. However, regional player A1 Bardi Paper Mill follows P&G with its Fine brand becoming a household name.

In terms of population, the Middle East has about 300 million people and roughly 85 million of them are in Egypt, explaining why so much attention has been paid to this North African country.

Additionally, Egypt's birth rates outpace that of the region, which are by the way higher than developed areas. Infact, the entire region has an incredibly youthful demographic with the mean age being as low as 21 in Yemen in 2013 and typically below 30 for the entire region creating a huge opportunity solely based on demographic patterns. This, linked with rapid urbanization, rising incomes and modernization in terms of retail as well as consumption culture, makes for a heady mix of trends which have translated into a particularly buoyant hygiene industry.

Saudi Arabia action moves to the west coast

According to Euromonitor, the hygiene market has seen strong performance in Saudi Arabia in recent years, benefiting from a number of positive economic and demographic trends. Strong economic growth in general has boosted consumers' disposable income levels enabling them to spend more on things like hygiene products.

Growth was also supported by strong and ongoing urbanization and by retail developments and a growing focus on hygiene.

Adding to this is an increased percentage of adult women as well as a rise in the number of women in the workforce, a trend that led to increased spending on products like feminine hygiene items, diapers and wipes.

Known as Modern Products Co. in the kingdom, Procter & Gamble enjoys a leading position with its Pampers and Always brands, which are made at the company's Jeddah site. Both P&G and Olayan Kimberly-Clark have recently gained value share as rising disposable incomes have encouraged consumers to trade up to the strong global brands, according to Euromonitor.

The success on the retail market has encouraged investment by a number of nonwovens producers including Saudi Arabia Advanced Fabrics (SAAF) and Saudi German Nonwovens (SGN), which have recently added sites on the west coast of Saudi Arabia, providing better logistics for shipping westward than their original sites on the east coast of the nation.

"Before we added the new line, nearly half of our output had to be transported nearly 1,000 miles across the desert to reach the seaport at Jeddah,"says SGN spokesman Richard Gillings. "It was a strategic decision to add a site on the west coast of Saudi Arabia for easier shipping logistics."

Turkey continues to expand

Turkey emerged as a major player in nonwovens in the late 1990s and early 2000s as the manufacturing sector diversified beyond traditional textile manufacturing. Since then nonwovens makers have not only served existing markets in Europe and beyond but have also catered to a growing consumer segment within the hygiene market.

According to Euromonitor, higher education levels are creating greater awareness of hygiene products leading to growth in the market. Like in Saudi Arabia, the hygiene market is dominated by multinational companies due to product launches and marketing activities. This has led to a number of players in the market investing heavily in a range of technologies.

Alican Yilankirkan, commercial director of Turkish company General Nonwovens, reports supply outweighing demand in the current market. This company, which recently doubled the size of its operation, makes spunbond and air through bonded nonwovens for Turkey, the Middle East and Europe. "In the current market situation, the supply is higher than demand which creates competition for quality, service, delivery and pricing," Yilankirkan says. "The oversupply in Europe still seems to exist and the unstable situation in some Middle East countries also makes it difficult to divert some excess capacity to this region."

Also in Turkey, Mogul recently started producing a new core/ sheath type bicomponent line, which followed a new polyester spunbond line. The new line brings the total polyester capacity for Mogul to 15,000 tons, making it one of the key players in the PET spunbond market. The new bico PET line will provide area thermal bonded flat fabrics in round and tiptrilobal filament shapes in low denier.

By Karen McIntyre, Senior Editor

(c) 2014 Rodman Publishing

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