Global strategy to serve local markets Ontex

global strategy to serve local Markets

With a new factory in Poland and growing on-line sales, Ontex is continuing to find flexible responses to world-wide customer needs

In February 2019 Ontex, the worldwide supplier of disposable personal hygiene products, officially opened its new production facility in Radomsko, Poland. The newly built plant will allow the company to better serve the Eastern European market.

Construction of the facility began back in 2017, with the entire investment estimated at EUR 16 million. The 26,000 sqm factory was built on a 110,000 sqm site. It is an environmentally friendly facility of which the products are marked with a green energy certificate. In the coming years, the facility will expand its capacity from 1 to 4 production lines. By 2020, Ontex Radomsko should employ at least 170 locally recruited employees.

Until now, Ontex has been serving Poland by importing products from the Czech Republic. The swift development of the Polish market and its advantageous location drove the decision to set up a local facility.

“We are very proud to extend our production capacity in Poland, which is testimony to our strong commitment to the Eastern European market” CEO of Ontex, Charles Bouaziz, said. “At Ontex, we strongly believe in a local market approach, with manufacturing plants which are strategically located to allow us to respond efficiently and flexibly to consumers’ and customers’ needs. The new production facility in Radomsko will help us better serve our expanding retailer customer base in the region”.

The Radomsko factory is the 19th Ontex facility in the world. The Group has other production facilities in the Czech Republic, Brazil, Germany and Australia, among others.

Forty years of innovation

Headquartered in Belgium, Ontex designs, manufactures and delivers disposable diapers and pants, pads, tampons and panty

liners to retailers and healthcare providers in more than 110 countries. With 18 manufacturing bases around the globe, it employs more than 10,000 people and, in 2018, generated sales of EUR 2.29 billion.

Two-thirds of Ontex products are tailor-made for retailers’ own brands and the company has earned a reputation for helping major market players respond swiftly to industry trends and to stay ahead of rapidly changing markets and meet the needs of populations.

Ontex’s close links with the health institutions it supplies go back to 1979, when it produced underpads for Belgian hospitals, clinics and care homes. By the 1980s and 1990s, it had expanded its product range into disposable pants and pads for incontinence, diapers and panty liners and acquired distribution and production facilities across Europe, in the Czech Republic and Turkey. The first Ontex factory outside Europe opened in China in 2006, followed by a manufacturing plant in Algeria.

In 2011 Ontex acquired one of Europe’s biggest disposable hygiene products suppliers, Lille Healthcare and opened plants in Australia, Russia and Pakistan.

In 2013, it extended its range of incontinence products with the acquisition of the Italian Serenity brands.

Another milestone was passed in June 2014, when Ontex was listed on the Belgian Euronext stock exchange, giving the company a strong financial base from which to continue developing new products, working with customers and seeking new markets. The strategic acquirement of the Mexican Grupo P.I Mabe in 2016 accelerated this transformation extending the Ontex platform outside Western Europe and deeper into growth markets. The acquisition of the personal hygiene business of Brazil’s Hypermarcas S.A. then further extended its market position in the Americas.

Transform to Grow

In May 2019 Charles Bouaziz reported on the progress of Ontex’s growth strategy: “Since its IPO in June 2014, Ontex has emerged as a leading international personal hygiene company, delivering consistently on its strategy to grow outside of Western Europe, increase branded business and expand its presence in Adult Incontinence. Faced with unprecedented headwinds and challenges in the last two years, Ontex has demonstrated the resilience of our business model. Yet, further action is required to take Ontex to the next level.”

“Our comprehensive transformation plan, Transform2Grow (T2G), will step-change our operational efficiency and commercial practices. With T2G-enhanced commercial focus and competitiveness, we will accelerate execution of our two strategic priorities: strengthen our current leadership positions and expand into new businesses and geographies within our core categories. Our objectives remain to outperform markets in which we operate and improve our profitability and cash generation.”

Although Ontex’s sales in its European markets were 6 per cent lower in Q3 2019 than in the same period the previous year, revenue in the AMEAA Division (Americas, Middle East, Africa and Asia) was up 6.6 per cent in Q3. “We continue to perform well ahead of our markets based on solid commercial execution and innovations supporting our own local brands,” said Mr Bouaziz. “Sales increased in all three categories and most geographies of this Division. Our local brands continued to generate solid consumer demand in Brazil and Mexico, driving revenue growth in both countries. US sales

continued to be strong and revenue in the Middle East, Africa and Asia also grew in Q3 despite a challenging political and economic environment in some markets.”

expanding on-line sales

Last August Ontex launched its Little Big Change diaper subscription service in Benelux. Following its successful launch in France in June 2018, the new subscription service is now available in Belgium, the Netherlands and Luxembourg. The Benelux Little Big Change launch is supported by an online sales platform and significantly increases Ontex’ presence in Direct-To-Consumer e-commerce.

“The launch of Little Big Change in Benelux is an important step in the digital transformation of our company,” said Charles Bouaziz. “It’s the first Ontex baby diaper available exclusively through an online subscription model, providing parents with a flexible and highly customisable purchasing and delivery service. Little Big Change is our response to changing consumer behaviours and needs. The subscription business model is an important pillar for the company’s future growth.” n