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Japan’s Nonwovens Producers Defend Themselves Against Market Challenges

2025-02-08 23:04

Market Shifts in the Baby Diaper Industry: Challenges and Strategies

The baby diaper industry has undergone significant transformations in recent years, particularly in Asia, where shifting demand patterns, competitive pressures, and economic uncertainties have prompted major changes among manufacturers. Companies that once saw Southeast Asia as a promising hub for production expansion are now reassessing their strategies due to evolving market dynamics and financial challenges.

Struggles with Relocation and Market Adjustments

One major company, after establishing a manufacturing operation in Thailand in 2014, has found that efforts to relocate much of its baby diaper production to Southeast Asia have not been as effective as anticipated. In fiscal 2024, the company projected a consolidated net loss of ¥10.3 billion, with its equity shrinking by ¥7.3 billion to ¥29.4 billion between late March and the end of September. This financial decline highlights the growing challenges of maintaining profitability in the increasingly competitive baby diaper market, particularly as demand patterns shift and cost pressures intensify.

Similarly, JNC Fibers, a well-known producer specializing in thermal bonded nonwovens for baby diaper applications, has been forced to scale back operations. The company ceased production at its Japanese facility and sold one of its two Chinese sites to a local competitor, reducing its overall nonwovens output in Asia. These actions were attributed to weakening demand within the baby diaper sector, reflecting broader market trends. Despite these setbacks, JNC continues to manufacture thermal bonded materials at its remaining Chinese plant as well as in Rayong, Thailand, signaling a commitment to sustaining its presence in the region.

Strategic Mergers in the Face of Declining Demand

In response to mounting pressures, Japan’s two largest nonwovens producers, Mitsui Chemicals and Asahi Kasei, have taken proactive steps to adapt. Recognizing the challenges posed by declining baby diaper demand in Japan and heightened competition from Chinese manufacturers, the companies announced a strategic joint venture in 2023. This partnership integrates their spunbond and nonwovens operations across Japan and Thailand, allowing for streamlined production and cost efficiencies.

By consolidating resources, Mitsui Chemicals and Asahi Kasei aim to optimize the varieties of nonwoven fabrics used in baby diaper production, enhancing efficiency and competitiveness. Additionally, the merger provides an opportunity to strengthen their presence in the industrial materials sector, thereby diversifying revenue streams and ensuring long-term sustainability.

Contraction of the Japanese Nonwovens Market

The decline in Japanese baby diaper production is not an isolated event. According to Kin Ohmura of Osaka Chemical Group, Japan’s overall nonwovens output has been steadily decreasing since 2018, dropping from 341,000 tons to 269,000 tons in 2023. This downward trend reflects both domestic factors, such as declining birth rates, and external pressures, including increased competition from Chinese manufacturers.

While Japan faces contraction, other Asian markets have experienced robust growth. Between 2018 and 2023, nonwovens production across Asia surged from 5.5 million tons to 7.3 million tons, with China and India leading the expansion. This shift highlights the increasing dominance of Chinese and Indian manufacturers in the baby diaper supply chain, positioning these countries as key players in the global market.

The Future of Baby Diaper Production in Asia

As companies navigate the evolving landscape of the baby diaper industry, strategic investments and market adaptations will be crucial for maintaining competitiveness. While Japan’s role in baby diaper production is diminishing, the rise of China, India, and other Southeast Asian nations as manufacturing hubs presents new opportunities for growth.

Ultimately, the success of baby diaper manufacturers in Asia will depend on their ability to innovate, reduce costs, and respond to shifting consumer demands. By leveraging technology, optimizing supply chains, and exploring sustainable solutions, companies can position themselves for long-term success in an increasingly dynamic market.


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