Easing Cost Pressure Will Bolster Unicharm’s Near-Term Profits but Volume Contraction a Concern

Unicharm is the third-largest global personal hygiene manufacturer with a focus in Asia comprising 47% (ex-Japan) of the group's sales. Its disposable hygiene products are built on the application of nonwoven fabrics and super-absorbent polymer and designed to support various life stages. Tapping into populated Asian markets as an early entrant and establishing a meaningful presence through constant product and marketing innovations has been its winning formula over the past two decades. Increased disposable income and improved standards of living have fueled demand for disposable hygiene products in its core markets. Moreover, premiumization, specifically prevailing in the region’s feminine care, has been a recent growth driver. Likewise, adult incontinence, emerging as a meaningful growth contributor, has the potential to outgrow baby diapers as the region’s population ages.