P&G moves to triple Warsaw diaper production
U.S.-based consumer goods giant Procter & Gamble (P&G) announced last week that it would invest $150 million to triple production at its Warsaw diaper facility.
"The goal of our investment plan is to increase our production capacity," said Malgorzata Mejer, PR manager at P&G Polska.
P&G, which entered the Polish consumer goods market in 1990, began production of one of the multinational's anchor brands Pampers diapers at its Warsaw facility in 1994. To date the company has invested about $200 million here.
Mejer, who would not reveal production numbers for Pampers, said only that output would triple within three years. She also declined to say what portion of the company's overall revenue is attributed to diaper production, which reached $400 million in the fiscal year ending in June.
"Thanks to this investment, the Procter & Gamble factory will be one of the company's five biggest factories in the world," she said.
P&G's Polish operations export to 19 countries in Central, Eastern and Southeastern Europe. The company now plans to increase its exports to 25 countries, including the European Union.
"An investment of $150 million is not a trivial amount," said Roman Kornacki, vice president of the Polish Foreign Investment Agency (PAIZ). "Especially if it is being transferred into modernizing the production line and increasing the number of employees."
"It's also more proof that investments in Poland allow for the possibility to penetrate Western European (export) markets."
According to ACNielsen Polska, a research company that monitors the diaper market, only a few firms are prominent in the sector. "The three main players are Procter & Gamble, Torunskie Zaklady Materialow Opatrunkowych (TZMO) and Molnlycke (now called SCA Hygiene Products)," said Joanna Skowronska, the spokeswoman for ACNielsen.
The majority of P&G's rivals refused to comment on their competitor's investment plans. However, Magda Wesolowska, a product manager at SCA, did acknowledge that the company keeps an eye on other firms' moves.
"We are concerned and observe what (P&G) is doing," she said. She added that her company wasn't worried because both SCA and P&G have different niches in the diaper market. "Procter is a giant in the so-called standard brand and we (are a giant) in the premium one," she said.
ACNielsen's Skowronska said that between July and August of this year, 86% of the market belonged to the three main players in terms of sales. "But the company is an unquestioned leader and the main part of that market share (86%) belongs to Procter & Gamble," Skowronska said.
But according to market researcher MEMRB Poland, in 1999 P&G had 61% of the diaper market in terms of sales, SCA had 19% and TZMO 9%.
