Baby Diapers Wipes Market In India M Mallyah

Baby Diapers & Wipes Market In India M. Mallyah INDA - USA Representative - India

Presentation Structure n Disposable Nonwovens – Retails sales, Fabric consumption and Value n Disposable Nonwovens – Growth rate predictions n Market potential of baby diapers and market share n Growth driving and impeding factors for baby diapers n Disposable wipes market and market share in India n Growth driving and impeding factors for wipes n Disposable wipes – Global trends

Disposable Nonwovens - Retail Sales M $ Absorbent hygiene Year Product 2002 2007 2012 CAGR 02 -07 CAGR 07 -12 Baby Diapers 14 38 79 21. 4 15. 6 Training Pants 0 Small 10 NA Moderate Feminine Care 56 154 386 22. 2 20. 8 Tampons <1 <1 1 Low 2 -5 Adult Incontinence 9 20 60 High 20 -25 Total 80 213 536 21. 6 20. 3 Source: India Nonwovens Outlook, INDA Ian Butler, India

Disposable Nonwovens–Production M Units – Absorbent Hygiene Year Product 2002 2007 2012 CAGR 02 -07 CAGR 07 -12 Baby Diapers 57 150 310 21. 4 15. 6 Training Pants 0 Small 15 NA Moderate Feminine Care 950 2650 6680 22. 8 20. 3 Tampons <5 6 14 Adult Incontinence 5 23 70 High 20 -25 1017 2829 7089 22. 3 20. 1 Total Source: India Nonwovens Outlook, INDA Ian Butler, India

Consumption of Nonwoven Fabrics In India (M $) Disposable Durables 2007 2012 Growth Rate 29. 9 64. 9 17. 9 184. 1 325. 0 12. 0 Total 214. 0 390. 0 12. 7

Disposable Nonwovens Fabrics – Value M$ Year Product 2007 (M$) 2012 (M$) CAGR Baby Diapers 5. 5 11. 3 15. 6 Training Pants 0 0. 3 NA Feminine Care 8. 9 22. 4 20. 2 Adult Incontinence 1. 7 5. 3 24. 9 Sub. Tot Absorbent Hygiene 16. 1 39. 3 20. 1 Wipes 1. 0 1. 8 12. 8 Medical 4. 8 9. 7 15. 1 Other 8. 1 14. 1 11. 8 Total 29. 9 64. 9 17. 9 Source: India Nonwovens Outlook, INDA Ian Butler, India Others include Fabric softener substrate, Sorbants, courier envelopes, sterile / nonsterile packaging materials

Disposable Nonwovens Fabric– Volume M, m² Year Product 2007 (Mm²) % Share 2012 (Mm²) % Share Baby Diapers 82 33 169 30 Training Pants 0 0 5 1 Feminine Care 71 29 177 32 Adult Incontinence 26 12 79 14 Sub. Tot Absorb hygiene 179 72. 5 430 76. 5 Wipes 6 2. 4 11 2. 0 Medical 43 17. 4 85 15. 2 Other 20 8. 0 35 6. 2 Total 247 100 562 100 Source: India Nonwovens Outlook, INDA Ian Butler, India

Volume of Nonwoven Fabrics in India (Tons) Year (Tons) 2002 2007 2008 Disposables 3, 300 6, 508 7484 Durables 13, 600 40, 458 97, 516 Total 16, 900 46, 966 105000 Source: India Nonwovens Outlook, INDA Ian Butler, India

Market Potential For Baby Diaper In India 2007 2012 Total Population ( Billion) 1. 11 1. 19 Births ( Million) 24. 4 26. 0 Total Infant Population ( Million) 57. 1 60. 9 28213 30080 Estimated Diaper Consumption (M) 150 310 Penetration (%) 0. 5 1 Ave Retail Price / Diaper US$ 0. 255 Retail Sales ( M$) 38. 3 79. 1 Potential Market Size For Diapers ( M) Source – INDA Estimates

Baby Diaper Market Share In India -07 Major Participants Sales M S Share % Brand Name Made in India Kimberly Clark 20. 7 50 -55 Huggies X Proctor & Gamble 9. 2 20 -25 Pampers Others 8. 1 20 -25 Import X X Actifit Nappies X Godrej Snuggy X Hygiene Wear Intl Koochees Infantino X Teddyy X Lollas X Nobel V-cint. A Intl Wipro Total Source – INDA Estimates Baby Soft 38. 0 100 X X

Growth Drivers for Baby Diapers GDP Increase, Disposable Income & Std of living Increase in Literacy rate Awareness of Hygiene among lower middle class and country side women Increasing Working Women Population Reduction in Raw material particularly the high performance absorbent core Overall reduction in the cost per unit at the retail level Increase in retail outlets – Mall Culture Marketing Drive by Multinationals in the country side

Nonwoven Consumption Rises as GDP per Capita Increases * Kg/capita N. America Taiwan E. U. Japan Korea Trend Line Turkey Czech Rep. Latin America INDIA Source: INDA Estimates * PPP in US$ equivalents

Market Progression as Industry Develops (kg per capita consumption) Developed Industry Higher disposables Early Development Higher durables Source: INDA Estimates

Production Capacity of Nonwoven Fabric India (MT) Estimated Capacity 2002 -3 Capacity installed/under installation 2006 -7 Spunlace Nil 27500 Spunbond 9000 39000 Needle punch 10000 20000 Chemical bonding / thermal bonding / stitch bonding 3000 15000 Total 22000 101500 Type of Nonwoven

2007 Nonwoven Consumption By Diaper Component (MT) Square Meters M m² Tons Top Sheet 21 370 Back Sheet 21 370 Barrier Leg Cuff 8 150 Other Materials 32 590 Total 82 1480 Component

Growth Impeding Factors for Baby Diapers Launderable Cloth Nappies, Nappy pads and Liners at cheaper price than Diapers High cost of diapers Rs 9 to 12 per diaper Cost Conscious parents using cloth diapers in the day and Nonwoven diapers in the night giving both baby and parents the option for peaceful sleep Cultural aspects – Cloth diapers are often viewed as the better choice, cooler in summer and does not cause rashes – A misconception Kimberly Clark began to address some of the misconceptions by educating mothers through their pediatrician program about the benefits of disposable diapers and the importance of dry skin with regard to baby’s health

Disposable Wipes Market in India n Wipes market in India is in embryonic stage. n Retail statistics are unreliable due to its small size n INDA estimates US$ 9 M as the total value of the fabric used by wipes Industry in 2007 n Nonwoven materials consumed in 2007 by disposable wipes including imports is around 6 M m² equivalent of 300 tons or 0. 3% n Wipes market grows at around 12% per annum n Baby wipes market account for 80 -85% of the total wipes market n Baby wipes market expand at a much higher rate at 20% per annum due to the presence of multinationals and their marketing drive n INDA estimates the total retail sales of wipes at US$ 16 M by 2012 with a consumption of 11 M m² fabric or 550 tons

Factors impeding wipes market growth in India n Cultural ethic to use cotton Launderable wipes n Not in favor as they are disposable – Waste of n n n money to use a wipe once & throw it. Expensive around Rs 2 to 3 per wipe Most disposable wipes are imported from Malaysia, Indonesia & China Till last year, most of the spunlace material used for wipes was imported Household wipes and Industrial wipes are yet to pick up Many local & regional players without a manufacturing base and marketing drive

Growth factors driving wipes market in India n Two new spunlace manufacturing units in india n n and more to join More convertors are getting into the market making wipes available at affordable prices. With fall in oil prices, fibre prices are bound to fall making the manufacturing cost cheaper Growth in organized retail, increase in disposable income and working women or urban populace Household & Industrial wipes will hit the market soon

Major Participants in disposable wipes market in India Major Participants Brand Name Made in India Import Kimberly Clark Huggies X Proctor & Gamble Pampers X Anakku X Godrej Snuggy X Grasim Kara X Nobel Hygiene Teddyy Premier Aryco Teddy Soft Patterson Intl Soft Love Tainwala Personal care Pristine Care Source – INDA Estimates X X X Fresh ones X Clarus X

Disposable Wipes – Global trends n High Consumption in North America, Europe, Japan and other high GDP nations. n America consumes 14% and Europe 16% of their Nonwoven fabric production in wipes n Strong Growth in South America, Eastern Europe, Middle East and China as GDP grows n In Asia, Japan uses a high volume of wipes at 62787 tons or 17%, China produces more volume at 92000 tons or 8% and Korea 6912 tons or 3. 2% n First market developed globally is baby wipes – Import & then production n Annual Growth rate is 15% per year n Household wipes constitutes 46%, baby wipes 31% and personal wipes 23% of the total wipe production

What Drove the Consumer Market Globally? 1997 -2007 n New Household Products – �� Electrostatic and Floor Cleaning (Swiffer -P&G, Pledge –SC Johnson, Scotch Brite-3 M) Swiffer is a billion dollar product line for Procter & Gamble worldwide. – �� Disinfecting / Hard Surface wipes by Clorox, Lysol, Scotch Brite. This is a half billion dollar market in N. A. – �� Furniture polishing; Window cleaning (Pledge and Windex by SC Johnson) – �� Automotive interior cleaning, tire wipes, bug removal, leather protection, waxing

What Drove the Consumer Market Globally? 1997 -2007 n New Personal Products – �� Feminine Care: Always, Fresh ’n Up, Playtex – �� Cosmetic/Facial Cleaners: Biore, Neutrogena, Oil of Olay, Pond’s Dove These are relatively expensive (20 -25 cents each) – �� Toilet Wipes: Charmin, Cottonelle, Wet Ones, Fresh ’n Up – �� Bath, General Purpose, Incontinence: Comfort Personal, Splash ‘n Go, Wet Ones

What Drove the Consumer Market Globally? 1997 -2007 n Baby Wipes – �� Was the first market to have considerable volume – �� Volume grew during the past decade as product was used for more than just wiping babies. Used in many other areas and led to the Personal and Household wipes growth – �� Volume now: static n New Product – �� Flushable Training wipes

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