Monday 25 June 2012

Medical and Hygiene Products in India

  Samir Gupta, MD Business Coordination House (India)  reported 8.6% GDP growth for India in 2010-11 and within this the industrial sector was growing at 8.1%.  Urbanisation of the 1.2 billion inhabitants has increased to 30% and is expected to reach 41% by 2021.  Population growth is higher than China’s and on current trends India’s population will overtake China’s by 2035.  While average income is low (€725/year) there are 176 million people in the Middle and Rich classes and this group is expected to reach 300 million by 2016.  The resultant opportunities for nonwovens are amazing:
Organized retail outlet turnover has doubled in the last 2 years to US$40bn and will grow at 35-40% CAGR to reach $200bn by 2017.  After food products (43% of FMCG) , Personal Care (22%) is the largest FMCG sector.  Others to note are Fabric Care (12%), Hair Care (8%), and Baby Care (2%).  Some PC sectors are now growing at 40% CAGR.

India emerging as next business destination
Increasing health consciousness, top class private hospital chains and increasing medical tourism are driving growth in the Medical sector...
Nonwovens are used in medical products but the annual per capita consumption is only 230gms compared with 4.5 kg in America. Woven cotton textiles dominate but historically, these are replaced only when obviously worn out.  This is changing and nonwoven gowns and drapes are increasingly used and now have market share of 10%.  Nonwoven (12-25 gsm spunbond) caps now have a 40% share. 60% of nonwoven gowns in India are spunbond PP and 40% are the higher quality SMS or spunlaced fabrics.  (KC and 3M are established suppliers). 60% of drapes are multipurpose sheets of PP spunbond laminated with PE film.  The 40% used in surgery are mainly SMS with a little spunlace. (KC, 3M and J&J dominate).  Surgical masks are unregulated and business often goes to the cheapest.

India's Class System breakdown by population

Baby diapers (38 billion/year potential) are 3.2% penetrated by disposables, and nearly 40% of these are imports.  80% of the market goes to P&G, KC and new entrant Unicharm who has had a successful launch of Pull-ups.

Fem Care (25 billion/year potential) is 26%  penetrated.  90% by value goes to P&G, KC, J&J and Unicharm.  The government is promoting fem care in rural areas to improve school attendance. Ultra-thin pads take 30% of sales but the market leader is still the bulky, cheap fluff-pulp pad.  Nocturnal Napkins from P&G and J&J are doing well, and panty liners will be the next growth area.

Adult incontinence has a 40bn/yr potential but is only 0.17% penetrated.  A CAGR of 50% is expected for the next 5 years.

(from EDANA Middle East Symposium  - Dubai - 14th and 15th Feb 2012)

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