Sanitary Paper Products

SIC 2676

Companies in this industry

Industry report:

This classification covers establishments primarily engaged in manufacturing sanitary paper products from purchased paper, such as facial tissues and handkerchiefs, table napkins, toilet paper, paper towels, disposable diapers, and sanitary napkins and tampons.

Industry Snapshot

The sanitary paper products industry manufactures paper into finished products with sanitary applications. There are three broad subcategories within the sanitary paper products industry: disposable diapers, which was the largest segment; sanitary tissue paper products; and sanitary napkins and tampons. Other industry products include adult incontinence products and baby wipes. According to the U.S. Census Bureau, shipment values in the sanitary paper products industry were approximately $10.4 billion in 2007. Figures from Supplier Relations US LLC showed that industry revenues reached $10.7 billion in 2008. The United States exported $1.4 billion worth of products in this category that year, and imports were worth $1.7 billion.

Many of the products within this classification are considered nondiscretionary, which results in sales within this classification following different business cycles than those of more commodity-oriented paper lines. Although the introduction of new sanitary products, such as those for adult incontinence, have helped expand the market, this industry tends to grow only as fast as overall gross domestic product.

As in many mature markets, competition for customers is fierce. Tissue manufacturers, for example, constantly try to lower production costs because small gains can lead to major gains in either profit margins or market share. Since a large majority of the products within this classification are branded consumer products sold in many different retail outlets, the sanitary paper industry spends more on advertising than any other segment of the paper industry.

In order to maintain growth, firms have begun to focus on expansion abroad, while continuing to segment the market and introduce new products domestically. Production of sanitary paper products is one of the few areas of the paper industry where major global corporations, especially Kimberly-Clark Corporation and the Procter & Gamble Company, operate manufacturing facilities in many locations around the world. Most of the major companies in the sanitary paper products industry are integrated, so they produce the raw materials for finished products, such as parent rolls of tissue at large paper mills, as well as the converted sanitary paper products, such as packages of bathroom tissue.

Organization and Structure

The majority of sanitary paper products are made from pulp or paper, although a significant percentage are made using the "nonwoven" process, in which natural or synthetic fibers are bonded together by cohesion, friction, or adhesion. Sanitary paper products are usually divided into two sectors: consumer or commercial and industrial (C&I). Customers in the C&I category of sanitary paper include schools, hospitals, or offices.

Sanitary Tissue.
Sanitary tissue products represent the second largest segment of this industry, after disposable diapers. It is divided into several subcategories. The largest of these is retail toilet tissue, which accounts for about a third of all sanitary tissue product shipments by value. Other segments include retail paper towels, industrial paper towels, facial tissues, industrial paper napkins (hand towels), and retail paper napkins.

The processes used to make sanitary tissue products are very similar to those used to create other types of paper. In the standard papermaking process, wood fibers are stripped from wood chips in either a chemical or a mechanical process to produce wood pulp. This pulp, which is a combination of wood fibers and water, is then spread on a continuous fine screen. The resulting mat is then passed over vacuum boxes to remove some water, and run through successive drying and pressing processes until the finished paper product is achieved.

The major differences between general paper manufacture and tissue manufacture lie in the type of raw material used and the converting processes. Because of the relationship between the softness of the raw material and the softness of the final product, lightly refined softwood fibers are generally preferred for consumer-oriented products. These fibers come both from virgin fiber (wood) and from recycled fiber. In fact, the sanitary tissue products industry is one of the largest recycling industries in the United States. The majority of all U.S. tissue is produced with fiber from purchased wastepaper (recycled paper). The remaining fiber is either produced from purchased virgin pulp or produced on site at integrated pulp and paper mills. Products for the C&I market typically place a higher premium on strength as opposed to softness, and are made from recycled paper or coarser grades of wood.

Once the tissue paper is formed, large integrated producers typically convert it into consumer products on-site. Small nonintegrated converting operations purchase "jumbo rolls" of tissue paper on the open market. Depending on the type of product, dyes and perfumes may be added and the paper may be embossed. The tissue is then prepared for market. For example, facial tissues are folded and boxed, and bathroom tissue is rolled and prepared for shipment.

Nonwoven Sanitary Products.
The nonwoven sanitary paper market consists of products that incorporate nonwoven fabrics in their manufacture. Nonwoven products include disposable diapers and training pants; feminine hygiene products; adult incontinence products; including consumer and institutional adult pads and bed pads; and premoistened tissues, including baby wipes. Advances in nonwoven technology have increased the number of nonwoven applications and enhanced the use of nonwovens in existing applications.

Nonwovens are so named because the fibers (synthetic or wood pulp) used in their fabrication are bonded together instead of woven, as they are in textile-type products. This bonding can take the form of an adhesive applied to the fiber mat before or after forming, or it can be the result of a chemical reaction. The typical nonwoven product incorporates many steps into its fabrication. A diaper, for example, will begin with a polyethylene outer shell. Dry formed wood pulp (fluff pulp) within layers of impervious nonwoven fabric is bonded to the shell. Glues, resins, and adhesives are used to bind the various components to one another. The typical adult incontinence pad, sanitary napkin, and tampon incorporate many of the same steps into their manufacture.

In the manufacturing process, nonwovens are often treated with super-absorbent polymers (SAPs) which can absorb as much as 70 to 80 times their weight in liquid. A further distinguishing feature of SAPs is that, unlike a sponge or other woven absorbent products, SAPs retain water even when squeezed. A sponge, for example, retains water in channels or pores. SAPs chemically bind with the fluid to form a gel. Under extremely heavy pressure, SAPs might release a type of gel, but most liquids remain in their chemical compound.

Aside from sanitary applications, nonwovens also can be found in other applications, either as a substitute for cloth or in applications requiring a high degree of absorbency (filters, car covers, durable shop towels). Because most producers of nonwoven sanitary products also produce nonwoven fabrics, the strength of these related industries can have an impact on the results of these companies.

After the final product is ready, the process moves from manufacturing to marketing. The need to market effectively drives two additional defining features of the industry. First, there is the need for extensive promotion, which means that companies within the sanitary paper industry spend the highest percentage on advertising of any paper-producing industry. Second, companies also have recognized the need for sophisticated marketing techniques. Important success factors in the industry include increased segmentation and "database marketing," which uses elaborate information banks to determine lifestyle predictors for a target segment.

Establishment Size and Distribution.
Unlike other grades of paper, many sanitary paper products, especially tissue products, are bulky, and it is not cost effective to ship them long distances. As a result, sanitary product converters have traditionally been located close to their end-use markets. This is especially true for more commodity-oriented product lines such as bathroom tissue and household towels. This is one of the reasons sanitary paper product manufacturers have developed a global network of manufacturing plants. For higher value-added products such as tampons and ultrathin pads, or niche products such as premoistened tissues and baby wipes, producers typically supply markets from only one or two manufacturing facilities.

The dual requirements of converting massive amounts of raw materials and a highly competitive consumer marketplace led to a high degree of concentration in the U.S. sanitary paper products industry. At the end of 1999, Fort James Corp., Kimberly-Clark, Procter & Gamble, and Georgia-Pacific Corp. controlled 76 percent of U.S. tissue paper manufacturing capacity, with the top two firms controlling half of the total. Fort James (created by the 1997 merger of James River Corp. and Fort Howard Corp.) had about 29 percent of U.S. tissue paper manufacturing capacity, while Kimberly-Clark, following its 1995 merger with Scott Paper Co., had 21 percent of capacity. Procter & Gamble controlled an additional 14 percent, followed by Georgia-Pacific Corp. with about 12 percent. Georgia-Pacific's share increased substantially in 1999 when it agreed to form a joint venture with Chesapeake's Wisconsin Tissue unit, which combined the companies' tissue making operations. The new unit, called Georgia-Pacific Tissue, was 90 percent owned and effectively controlled by Georgia-Pacific Corp.

In the disposable diaper segment, market concentration was even more pronounced. The two leading firms, Kimberly-Clark and Procter & Gamble, shared about 80 percent of the market in 1998, with roughly equal shares. Private label products accounted for 18 percent, and other brands had 3 percent of the market.

Background and Development

The development of the sanitary paper market in the United States has paralleled the development of two broader categories the market represents, the paper and consumer products industry groups. The advances made in paper production technology from the late nineteenth century to the early twentieth century had an impact on the entire paper industry as well as on the sanitary paper industry.

Sanitary Tissue Products.
As with most of the paper industry, the sanitary tissue sector owes much of its growth to advances in automation and wood processing made in the twentieth century. The invention of the Fourdrinier paper machine in the first half of the nineteenth century allowed greater volumes of paper to be produced at a lower price. This process is particularly relevant for sanitary tissue because it is still the ideal process for lighter weight grades in general and tissue manufacture in particular.

Since 1850 ongoing developments in wood processing have provided paper manufacturers with an inexpensive, reliable source of raw materials. Prior to these discoveries, the main raw materials for paper production were rags, cloth, and straw. By the 1850s, mechanization had already substantially reduced the costs of producing paper, but constraints on the supplies of raw materials limited paper production to specific applications. Once a process was developed for wood fiber to be converted into pulp, greater applications for paper became possible and the sanitary paper industry was born. Paper began to find its way into more and more households and assumed the roles previously held by towels, leaves, and rags.

In the early twentieth century, the marketing of sanitary paper products reached the level of importance that has carried into the twenty-first century. Prior to that, competition in the industry seemed to have an orientation of consolidation and acquisition. The United Paper Company made a series of acquisitions in the 1890s in an attempt to form a "tissue trust," but the trust was broken and the company forced into bankruptcy when other paper producers switched to tissue production and undercut the trust's position.

In the early twentieth century, developments in the sanitary sector were not as technology-driven as they were consumer-driven. Consequently, the role of the sanitary paper producer changed from providing specific products to responding to consumer needs. The development of Scott Paper Company reflects many of these changes. In 1902, the company introduced Waldorf, one of the first branded bathroom tissues, and moved quickly into a position of dominance in this product line. Scott's invention of paper towels in 1907 further consolidated the company's position. By the 1950s, Scott held more than 50 percent of the sanitary tissue market. Over time, however, new product introductions and sustained marketing efforts by competitors reduced Scott's market dominance.

Perhaps it was Kimberly-Clark's long experience with marketing that allowed it to gain some of Scott's market share. In 1915, Kimberly-Clark developed Cellu-cotton, an absorbent wadding that was later used in feminine hygiene products. In 1924 Kimberly-Clark introduced one of the most ubiquitous brand names in the United States--Kleenex. Originally developed as a tissue for removing cold cream, the company found that it sold better as a disposable handkerchief and technological innovations in folding and packaging allowed Kimberly-Clark to market it as such.

Since these developments, the sanitary tissue sector has been marked more by evolutionary realignments than by revolutionary innovations. The basic product offerings of the major producers in the sector have remained essentially the same, but improvements in quality, strength, and packaging, have been the driving forces in the market. Beginning in the 1960s, the sanitary paper market experienced intensified competition among a number of strong competitors. Low-cost producers captured large segments of the low-end market, and marketing and consumer product giants gained substantial market share in the premium branded segments. James River Corp. of Virginia, founded in 1969, used acquisitions and joint ventures to expand its activities rapidly. James River evolved from a start-up operation in the early 1970s to the third largest tissue producer in the United States by the mid-1990s. In 1997 it merged with Fort Howard Corp., the nation's leading producer of tissue for the C&I market, to form Fort James Corp.

Nonwoven Sanitary Products.
The nonwoven sector, which emphasizes consumer goods, reflects the development of the power of marketing on U.S. lifestyles. At the same time, the technological innovations in super-absorbent polymers and nonwoven fabrics have marked advances in the sector.

Disposable diapers comprise the largest subsegment in the sanitary products industry. Procter & Gamble invented the category when it introduced disposable diapers with the Pampers brand in 1961. Since then, the market exhibited steady growth based mainly on increasing penetration rates. Continuous product enhancements and forceful marketing by Procter & Gamble and Kimberly-Clark, which are the two main players in the disposable diapers field, led to high rates of use. Annual new product introductions kept competition high and continuously improved the image of disposable diapers. Advances in nonwoven technology led to improvements in absorbency and size reductions, enabling producers to achieve savings in transportation and packaging. The next generation of diapers was expected to provide even greater absorbency to stay dry even through multiple wettings. Another major development that expanded the market was the introduction by Kimberly-Clark of the Pull-Ups brand of disposable training pants for older children.

Kimberly-Clark first entered the feminine care products segment in the 1920s with a sanitary napkin called Kotex. At first, societal norms prevented feminine care products from being publicized and displayed. Many magazines refused to carry advertising for feminine care products, and stores were reluctant to stock them. However, despite these barriers and the relatively high prices, consumer acceptance of the products was high.

The sanitary paper market experienced steady growth in the mid-1990s. The nondiscretionary nature of many of its product lines seems to ensure a strong demand base. At the same time, many producers had limited growth opportunities in the domestic market. The aging of the U.S. population, the relatively stable birth rate, and increasing competition all pose significant challenges for this industry.

The 1990s were marked by a series of massive mergers in the sanitary products market. The trend was started by the 1995 merger of Kimberly-Clark Corp. and Scott Paper Co., which was valued at $9.4 billion, with Kimberly-Clark (K-C) as the surviving corporation. The new K-C was a massive presence in the sanitary paper products industry, controlling nearly 30 percent of the sanitary tissue market and about 40 percent of the disposable diaper market. The U.S. Justice Department, concerned about excessive market concentration, reached a consent decree with K-C before it approved the merger. Under the decree, K-C agreed to sell the Scotties facial tissue brand and the Fort Edward, New York, tissue mill to Irving Tissue Inc. It also sold the former Scott wipes plant to its leading competitor, Procter & Gamble (P&G), which gave P&G a one-third share of the baby wipes market.

In 1997, James River and Fort Howard merged to create Fort James Corporation. This was followed by the 1999 union of the tissue units of Georgia-Pacific and Chesapeake Corporation. Fort James became the number one tissue producer in the United States and the number two producer worldwide.

Two of the major U.S. sanitary paper products producers moved away from vertical integration in the 1990s. Procter & Gamble and Kimberly-Clark sold much of their pulp making capacity to establish long-term agreements with independent pulp producers. Both companies cited the need to put more money into their core marketing, operations, and research and development units as reasons for the divestitures.

Because production of tissue and tissue products is highly integrated, one of the major factors affecting the financial performance of the industry is the capacity to produce tissue. If there is excess capacity, prices of tissue tend to drop, as do retail prices for tissue products. When demand exceeds growth in capacity, tissue prices can rise sharply, as they did in 1994 and 1995. U.S. tissue manufacturing capacity grew 3.4 percent in 1999 to 7.1 million tons, following the introduction of several new machines and the "ramping up" of machines that came online in 1998. Capacity grew an additional 2.8 percent in 2000, as more machines were brought online.

Sanitary Tissue Markets.
Although unit volume of sanitary tissue products grew steadily at about 2 percent in the mid- to late 1990s, the value of shipments was somewhat erratic, largely due to low underlying tissue prices. However, shipment values began to increase in 1994 and 1995 as major producers raised prices in response to dramatically higher prices for tissue paper and the wood pulp and wastepaper from which it is made.

In 1996, however, sharp drops in wood pulp and wastepaper prices helped increase profitability for major sanitary tissue product producers. These lower raw material prices allowed manufacturers to reduce prices modestly and still maintain profitability. For example, Procter & Gamble instituted price cuts of 5 to 8 percent in early 1996 for various consumer tissue products.

Despite a sharp drop in pulp prices in late 1995 and early 1996, the overall decline in tissue pricing was only 3 percent in 1996. Steady demand, rising operating rates, and an increase in pulp prices during 1997 drove up prices modestly. The prices of tissue products stabilized in the late 1990s due to relatively low prices for tissue paper and low inflation in the general economy.

Producers experienced slow but steady growth in the disposable diaper market after the product's introduction. The value of shipments was $4.13 billion in 1997, according to the U.S. Census Bureau. Growth in the domestic diaper industry reached a plateau in the late 1980s and early 1990s with a decline in net births and a stabilization of market penetration. Much of the sector's growth was due to increased market penetration and higher rates of use as the product improved, yet limited opportunities for domestic growth were predicted.

As diaper penetration rates stabilized, makers of disposable diapers used their capabilities to introduce products for market segments that exhibited increasing growth. Some of these products include training pants for children making the transition from diapers and adult incontinence products. The adult incontinence segment is considered one of the fastest growing in the country, albeit from a small base.

In the feminine care sector, sanitary napkin use continued to decline in the mid- to late 1990s in favor of tampon use. The value of shipments in the sanitary napkin and tampon market was $1.56 billion in 1997, with feminine pads accounting for $866 million of the total (55.5 percent) and tampons accounting for $694 million (44.5 percent). The share of tampons peaked at around 50 percent in the late 1970s, but declined in the 1980s due to adverse publicity associated with toxic shock syndrome. Since then, medical improvements in tampon manufacture led to increased acceptance of these products, and the tampon market rebounded.

Environmental Concerns.
In the early to mid-1990s, environmental concerns and long-term access to fiber were two of the top issues facing the paper industry. Restrictions on timber-cutting, new environmental regulations, and potential long-term fiber shortages were concerns for many sectors of the industry. However, timber-cutting restrictions in the Northwest, which continued during the late 1990s, have had a low impact on the sanitary paper products industry, mainly because a large proportion of the industry's fiber base is in recycled paper.

Manufacturers of tissue, like other producers of bleached paper products, faced strict air and water regulations under the Environmental Protection Agency's (EPA) "Cluster Rule," which was issued in its final form in April 1998. This rule further limited air and water discharges from bleached kraft pulp mills and other paper industry facilities, focusing on limiting discharges, particularly of dioxin, chloroforms, and other chlorinated organics arising from the pulp manufacturing process. Mills also faced new regulations promulgated by the EPA under revisions to the Clean Air Act of 1970 and Clean Water Act of 1972. However, mills that use recovered paper were expected to be affected less by these new rules than mills using wood pulp. This was significant for the sanitary paper products industry because nearly 50 percent of all tissue produced in the United States is made from recycled paper.

Producers of nonwovens faced other challenges. In the early 1990s, environmental pressure about disposable diapers in landfills caused concern for manufacturers. It prompted Procter & Gamble to create a short-lived program to compost used diapers. However, diapers account for 2 percent of solid waste in the average municipal landfill, and concern over this issue receded at the same time that the landfill crisis eased. By the mid-1990s, new landfills were opened, and it was discovered that available landfill space had been drastically underestimated.

The pulp and paper industry in North America was negatively affected by the terrorist attacks on the United States of September 11, 2001, as well as the ensuing economic recession, and the demand for most paper fell. Shipments saw declines, as did product prices. In addition, high energy costs and inexpensive imports from Europe drove the U.S. paper and pulp industry into a further slump. Producers were forced to cut production due to declining demand, and several small single mill operations closed down. U.S. paper and paperboard production declined 5 percent in 2001 to approximately 4.7 million tons.

With all sectors experiencing a decline in sales, among the three broad subcategories within the sanitary paper products industry, disposable diapers accounted for $3.63 billion of 2001 shipment values; sanitary tissue paper products, $1.68 billion; and sanitary napkins and tampons, $1.17 billion. A small "not specified by kind" segment accounted for about $117 million. One segment that experienced growth was adult incontinence, which rang up $553.3 million in sales in 2001, up more than 7 percent from 2000. Solid sales in the sector were reportedly due to the increasing number of older Americans and increased life expectancy among the elderly. Most of these products were sold in drug stores, but supermarkets and discounters like Wal-Mart gained increased market shares. Kimberly-Clark Co.'s Depend was by far the leading brand in the segment.

Easing environmental concerns, the first disposable baby diaper recycling program was announced in late 2002. With nearly 20 billion disposable diapers weighing 7 billion pounds added to U.S. landfills each year, according to the EPA, disposable baby diapers are reportedly the biggest single contributor to landfills. Leading the recycling technology was Knowaste Technologies Inc., which launched a six-month pilot program in one California city. Residents placed used diapers in specially designed plastic bags or bins that were picked on their regular garbage day. The diapers were sanitized, and the recycled plastic used for plastic wood production, roof shingles, and vinyl wood siding.

The U.S. sanitary products industry continued to grow in overall value throughout the mid-2000s. According to the U.S. Census Bureau, shipments increased nearly 2 percent to reach $8.5 billion in 2005. Although certain products in this industry remain in demand regardless of economic conditions, such as diapers and feminine hygiene products that are considered essential products, the nature of this industry traditionally made competition between brands fierce.

Prices of raw materials, especially the polypropylene spunbond coverstocks used for diapers, drove up costs that were becoming difficult to absorb and/or pass on to consumers. Although the price of a diaper decreased to about 15 cents each from 1990's average price of 20 cents each, production costs increased significantly during that time. A competitive retail market kept consumer prices low, resulting in a shrinking profit margin for manufacturers.

Other common issues facing the three main segments of the hygiene market, which consists of baby diapers, feminine hygiene, and adult incontinence, included high penetration levels in major markets and the constant demand to innovate. Kimberly-Clark Corp. (K-C), the world's largest producer of personal paper products, was a leader in innovation. Between 2005 and mid-2007, K-C introduced an antiviral line of Kleenex tissues, a line of Scott products made from 100 percent recycled fiber, a nonirritating line of antimicrobial tissue products, and customized Kleenex boxes.

The world's aging population began to impact the composition of the sanitary paper products industry in the mid-2000s. The global incontinence market skyrocketed to $3 billion, according to Euromonitor International, and reported nearly double-digit growth annually. The United States was the largest national market, with a 2005 value of $955 million. The global figure was projected to reach $4.4 billion by 2010. By that time, Japan is expected to surpass the United States as the largest national incontinence market, with a value of $1.3 billion.

The growth of the incontinence market is indicative of an aging population. By the year 2015, approximately 25 percent of the world's population will be over the age of 50, according to Nonwoven Industry. Products such as Kimberly-Clark's Depend and Poise brands are positioned to meet that need.

Growth in the incontinence market coincided with a decrease in other personal care markets, namely tampons and sanitary napkins. As more women enter menopause, such products become unnecessary. The introduction of birth control pills that suppress menstrual periods also reduced demand for feminine products. However, in the mid-2000s, the tampon subsector remained strong, fueled by product innovation and a shift in consumer preferences from sanitary pads. Nonwoven Industry reported that the value of the tampon subsector in the United States grew 7.2 percent between 2000 and 2005 to reach $952.1 million. Nevertheless, that figure was projected to decline 2.7 percent to $925.9 million in 2010. The demand for feminine pads and pantyliners dropped during the first half of the 2000s and were expected to continue this decline through 2010. In 2005, the value of the pads and pantyliner subsectors was $1.1 billion and $269.1 million, respectively. By 2010, those figures were projected to be roughly $1 billion and $241.4 million, respectively.

A relatively new subsector has seen meteoric growth in the 2000s. Feminine hygiene wipes were valued at $6.7 million in 2000, and five years later, that figure had nearly doubled to $12.8 million.

Current Conditions

Wipes continued to be a growing segment of the industry into the late 2000s, according to INDA: Association of the Nonwoven Fabrics Industry. Ian Butler, director of research at INDA, stated in an April 2009 press release, "We are astounded at the phenomenal growth of the wipes industry, with some markets growing in the double-digit range per year." Figures from Euromonitor showed that baby wipes saw a 6 percent annual increase in sales in 2007, whereas feminine wipes showed negligible increases in sales. One of the most important trends in this sector of the industry was making wipes "flushable," and, according to industry analyst Phillip Mango in Nonwovens Industry, certain types of wipes, including children's toilet care wipes and feminine hygiene wipes, "absolutely require flushability." Major companies such as Kimberly-Clark and Proctor & Gamble were responding to this trend by introducing new, flushable products.

The Freedonia Group predicted continued growth in the nonwoven fabric industry throughout the second decade of the 2000s. Globally, demand was expected to increase 6.9 percent through 2012, reaching 8 million metric tons. Annual growth in this category in North America was forecast at 4.5 percent. The personal hygiene market, which includes infant diapers and training pants, adult incontinence products, and feminine hygiene products, would continue to account for the largest share of the market. China alone was expected to account for 38 percent of the growth in demand, according to Nonwovens Industry, surpassing the United States as the largest nonwovens market in the world.

Industry Leaders

Kimberly-Clark Corp. was the world's largest manufacturer of personal paper products in the late 2000s. It produces facial and bathroom tissue under brands such as Kleenex, Cottonelle, and Scott. Other top brands are Huggies diapers, Kotex feminine hygiene products, and Depend and Poise incontinence products. Based in Irving, Texas, Kimberly-Clark posted revenues of $19.4 billion in 2008. The company employs approximately 53,000 workers globally.

Georgia-Pacific Corp. of Atlanta, Georgia, is the world's leading provider of tissue products, as well as the number-two U.S. paper and building products company behind International Paper. Some of its well-known consumer paper products include Angel Soft, Quilted Northern, and Soft 'n Gentle bathroom tissue; Brawny and Mardi Gras paper towels and napkins; Dixie disposable table products; So-Dri and Sparkle paper towels; and Vanity Fair and Zee napkins. The company employs some 55,000 workers in the United States, Canada, and 11 other countries. In 2005, Georgia-Pacific was acquired by Koch Industries Inc., a private company based in Wichita, Kansas, for approximately $21 billion.

The Procter & Gamble Company is the world's leading maker of household products. Aside from its toiletries, nutrition, and cleaning products, the company produces such sanitary paper brands as Charmin bathroom tissue, Always and Tampax feminine care products, Bounty paper towels, Puffs facial tissue, and Luvs and Pampers diapers. With 135,000 employees working in more than 180 countries, Procter & Gamble posted total revenues of $79.0 billion in 2009.


According to the U.S. Census Bureau, the sanitary paper products industry employed 17,198 people in 2007. About 81 percent were production workers. The number of manufacturing establishments in the United States totaled 146. Wages in this industry for production workers were higher than other industries in the paper and allied products group, averaging $17.36 per hour in the early 2000s.

America and the World

Although the United States was an enormous market during the 2000s, most producers saw great opportunities for growth in overseas sanitary paper markets. This was especially the case in China, where open markets and new interest created demand. The relatively large size of U.S. producers compared to their foreign counterparts, the marketing strength of U.S. companies, and relatively low levels of penetration of sanitary products in developing nations indicate continued globalization efforts.

The capital-intensive nature of paper manufacturing means that cheaper overseas labor has a lower impact on manufacturing costs than in other, more labor-intensive industries. U.S. manufacturers face little threat from abroad with only one foreign paper manufacturer, Germany-based Svenska Cellulosa AG (SCA), having a significant presence in U.S. sanitary markets. The internationalization of the sanitary paper industry forced U.S. firms to go abroad. Superior product quality and marketing ability has given the United States a competitive advantage in a number of foreign markets. For most sanitary paper producers, Europe is viewed as particularly promising.

In Asia, U.S. sanitary paper producers have had limited success penetrating the Japanese market, but much more success in the rest of Asia. The Japanese market is highly fragmented and thus viewed as vulnerable to the sophisticated marketers of U.S. products, but intricate supplier-retailer relationships have thus far prevented any U.S. producer from establishing a significant presence. However, U.S. companies' penetration of the fast-growing "rest of Asia" market is much greater.

Research and Technology

Changes in the manufacture of paper have historically been evolutionary rather than revolutionary. Many form of the processes used to manufacture paper from rags in the middle of the nineteenth century continue to be used in the twenty-first century. Much of the research and technology in this industry is focused on lowering incremental manufacturing costs because the ability to be the low-cost producer can translate into a strong market advantage. In addition, the ability to produce softer and stronger paper is a significant focus of sanitary paper products research and development. For example, Procter & Gamble's development of "through-air-drying" helped it develop the Charmin brand, which had superior bulk and softness compared with other products. Baby diapers lead the segment in terms research and development.

Increased innovation was an important trend in the 2000s, translating into products that were more comfortable, breathable, and stretchable. Baby and adult diapers saw improvements, including graphics that indicated the level of wetness of the outside of the diaper; more elastic in waist belts and legs; and more breathable cloths. Sanitary napkin innovations included better fit and thinner designs, and tampons benefited from better leakage protection.

In 2009 Kimberly-Clark announced the creation of the first gender-specific incontinence product. Depend Underwear for Men and Depend Underwear for Women were designed to better fit the unique shapes and better meet the incontinence needs of both genders. According to Women's Health Weekly, such ongoing innovations were beneficial to the 19 million Americans who suffered from incontinence in the late 2000s.

Because companies in this industry are highly competitive, their research and development programs are tightly guarded secrets. Many companies will not allow tours of their tissue-making operations for fear of industrial espionage.

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US Fed News Service, Including US State News; December 13, 2016; 455 words
...on Dec. 13, was assigned to The Procter & Gamble Co. (Cincinnati)."Process for manufacturing absorbent sanitary paper products" was invented by The Procter & Gamble Company (Cincinnati).According to the abstract* released by the U...
Regular Supplies of Hygiene and Cleaning Materials and Equipment for the Needs of Mma in 3 Lots: Lot ? 1- Sanitary Paper Products
Mena Report; March 3, 2016; 352 words
...Regular supplies of hygiene and cleaning materials and equipment for the needs of mma in 3 lots: lot ? 1- sanitary paper products. Regular supplies of hygiene and cleaning materials and equipment for the needs of MMA in 3 lots: Lot ? 1 hygiene...
Wipo Publishes Patent of the Procter & Gamble for "Process for Manufacturing Absorbent Sanitary Paper Products" (American Inventors)
US Fed News Service, Including US State News; August 11, 2015; 430 words
...WO/2015/116367 was published on Aug. 6.Title of the invention: "PROCESS FOR MANUFACTURING ABSORBENT SANITARY PAPER PRODUCTS."Applicants: THE PROCTER & GAMBLE COMPANY (US).Inventors: Thomas Timothy Byrne (US), Kevin Benson...

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