Poised for expansion Ontex

POISED FOR

EXPANSION

Ontex, Europe’s leading manufacturer of private label hygienic disposable products, is set for further expansion with the acquisition of Lille Healthcare. Felicity Landon reports.

Twelve manufacturing facilities and sales offices in 11 countries enable Ontex to maintain is leading position in Europe as the manufacturer of hygienic disposables for the private label sector. Last year the company, which produces a wide range of products for baby care, feminine care and adult incontinence care, was acquired by Goldman Sachs and TPG for €1.2 billion − the largest ever private equity transaction in Belgium.

Now Ontex, which is headquartered in Zele, Belgium, is poised for a major expansion with the acquisition of Lille Healthcare, a French-based company that operates across Europe and Australia selling incontinence products to institutional healthcare customers under the Lille brand, and private label products to retailers. Lille’s turnover amounted to €76.8 million in 2010.

“We have been an admirer of Lille Healthcare for some time and believe that its addition to the Ontex Group will make our offer more attractive in the growing incontinence market across all the geographies in which Lille Healthcare operates,” says Ontex CEO Michael Teacher.

Ontex employs 4250 people worldwide; Lille Healthcare, which has its head office at Lille and subsidiaries in the UK, Spain, Germany, Belgium and Australia, has 340 employees.

Three divisions

Ontex has manufacturing facilities in Belgium, France, Germany, Italy, Spain, the UK, the Czech Republic, Algeria, Turkey and China. It operates through three divisions – Retail, Healthcare and Turkey Regional.

The Retail division is primarily involved in the development, production and sale to retailers of private label baby care, feminine care and adult incontinence products. It also produces and sells to retailers branded products such as Helen Harper, Moltex and Babycharm.

The Healthcare division is primarily involved in the development, production and sale of private label and branded adult incontinence products to institutional customers – both private and governmental – in the healthcare market. The main brands are ID and Euron. The division also produces and sells private label products to specific healthcare distributors.

The Turkey division is rather a different section of the company; it is involved in the development, production and sale of private label and branded products, primarily Canbebe, Canlady and Canped, to customers across all three of its markets, mainly in Turkey and the surrounding countries.

Its product range in all three divisions is extensive: baby care includes diapers, baby pants and wet wipes; feminine care includes panty liners, tampons, classic fluff towels and ultra towels; and adult care includes light incontinence pads, pull-ups, belt diapers, all-in-ones, shaped pads, underpads for beds, and rectangular pads. All products are produced both under Ontex’s generic brands and for private label clients.

Focus on R&D

“As the leader in private label, Ontex maintains a strong focus on product development and is investing continuously in innovation in order to further improve the comfort, fit and performance of the product,” says a spokesman for the company.

The Ontex R&D department is split into R&D centres according to product categories and has teams based in each of the key manufacturing units as well as at the Zele headquarters, from where the entire R&D operation is managed.

“The role of the R&D team is to provide the Ontex Group with a flexible and innovative R&D system, which enables the company to work actively on new concepts, changes in product specifications and the validation of new raw materials, as well as contributing to productivity by optimisation of the used raw materials,” says the spokesman. “Our R&D activities are based on a multifunctional and short time to-market principle.”

The R&D teams work closely with key suppliers, which are themselves carefully selected in close cooperation with the purchaseing department. This process is essential for obtaining the desired raw materials and concepts, says Ontex.

To ensure that all products are fully validated and well tested before release to customers, each R&D centre has its own laboratory facilities working closely with all the manufacturing units – which also have their own lab testing equipment. “In order to validate the products in all aspects, including safety risks, in-use tests are organised next to lab tests, and this in close cooperation with independent test organisations. Only after positive evaluation, are the products released for production.”

Meeting environmental standards

Sustainability is a key topic with products such as those manufactured by Ontex. The group won the Better Environment Award for Industry in 1996, and since then has continued to focus on environmental issues.

Ontex specifies that its own activities and those of its suppliers meet environmental codes of practice and codes of fair and ethical conduct. All Ontex factories are introducing an environmental management system

which puts particular emphasis on waste management, electricity consumption, transport efficiency, packaging optimisation and weight reduction in new product design. The group’s two production plants in Belgium, at Buggenhout and Eeklo, are already ISO 14001 certified.

Fluff pulp, used to form the absorbent core, is the main raw material in Ontex products. “Product development has enabled us to drastically reduce the amount of fluff used in our production processes,” says the spokesman.

As well as reducing the quantity, Ontex only uses fluff pulp from suppliers which subscribe to responsible sourcing programmes such as the Sustainable Forestry Initiative or the Forestry Stewardship Council. One of its key priorities is to ensure that only wood from well-managed forests is used, with respect for the applicable regulations, water quality and important habitat elements for wildlife.

Ontex says it is committed to maintaining its leading position as the preferred supplier of hygienic disposable products to the retail trade and to hospitals, health authorities and other institutional bodies, with the focus remaining on quality and innovation.

“Ontex as a group is passionate about achieving high levels of customer service to help build trust between customers, the company and its employees. This, combined with the competitive pricing of the products, provides the value proposition Ontex offers to its customers.” n