World's 2nd largest baby diaper maker steps into India

Swedish major has earmarked nearly Rs 200-cr investment over next year-and-a-half

Companies such as Procter & Gamble, Kimberly Clarke and Unicharm, key companies in the Rs 4,000-crore baby diaper market in India, will now have to contend with one more competitor in Swedish firm SCA Hygiene.

The world’s second-largest baby diaper maker will finally launch its brand Libero in the country by next month in a bid to partake of the growth in one of the world’s most promising consumer markets.

Cecilia Edebo, vice-president, consumer goods, SCA Hygiene Products India, said the company had earmarked an investment of nearly Rs 200 crore over the next year-and-a-half, to be used in setting up a plant at Ranjangaon, near Pune, besides forming a sales & marketing team and in pushing its products in the country.

Apart from Libero, which competes in most markets across the world with P&G’s Pampers, Kimberly Clarke’s Huggies and Unicharm’s Mamy Poko Pants,  will also roll out products such as Tena, which operates in the adult diaper and hygiene market, and Tempo, the world’s largest consumer tissue brand.
 
Tork, which is into hand sanitisers and other hygiene products in the institutional segment, has been operational in India for a few years now through the import route.
 
Edebo says that the 9.8-billion-euro (or Rs 85,000 crore) company will for the next few quarters import most of its products into the country till its plant comes on upstream. “By early 2015, our manufacturing facility should be up and running,” Edebo says.

 
The company has already appointed a managing director for its India operations in Milind Pingle, an FMCG veteran, who has worked with companies such as Coca-Cola, Perfetti Van Melle, Godrej & Boyce and Wipro Consumer Care In a career spanning 25 years.
 
The Mumbai-headquartered company, Edebo says is also looking at acquisitions in the hygiene and consumer tissue segments in India, in a bid to catch up with rivals, who have long established their presence here.
 
Globally, SCA has scaled up quickly by using acquisitions as a means to achieve this. In neighbouring China, for instance, SCA has just announced that it would make a cash bid for control of the third-largest tissue maker there called Vinda. SCA already has a 21.7% stake in the Chinese company, which it acquired in 2006.

 
To beef up its presence in diapers, SCA last year acquired another Chinese company called Everbeauty, a key player In the space. It also acquired one of Europe’s leading tissue makers called Georgia Pacific last year, which gave it access to countries in the West Asia and Africa.
 
The push into emerging markets, Edebo explains, is part of SCA’s larger goal of growing its presence in these areas, which currently are not very significant contributors to the company’s overall turnover. Bulk of SCA’s revenues come from Europe and North & South America respectively. “In the last two years, however, we have identified West Asia, Africa and India as important markets and have set up a regional base in Istanbul, Turkey as part of this endeavour,” Edebo says.

 
India MD Pingle reports in to Thomas Wulkan, president of the SCA business unit for West Asia, Africa and India, who was appointed to the position in November 2011 as part of the restructuring exercise in the company.