Unitrade plans to put up diaper factory in PH

Chinese-Filipino entrepreneur Samuel Po, founder and head of JS Unitrade Merchandise, is mapping out a Southeast Asian expansion strategy anchored on the Philippines as a manufacturing hub.

JS Unitrade is a leading diaper distributor in the Philippines with a 26- to 27- percent share of baby diapers, a strong challenger to Procter & Gamble’s 27- to 28-percent share. It is the dominant player in adult diapers with a 65-percent market share. It sells baby diaper brands EQ Plus and EQ Dry, adult diapers Caress and Dr. P and female hygiene pads Charmee.

China plant remains

Po’s diaper manufacturing operations to date are done in China but the products are sold primarily to the Philippine market. Since the plant in China is now operating at close to its full capacity and given opportunities for regional expansion, Po is considering putting up a new diaper factory in the Philippines.

The new manufacturing hub will support JS Unitrade’s goal of doubling its sales in the next four years to more than P10 billion from about P5.3 billion in 2011. Po said this in an interview with reporters last week at the sidelines of the signing of a management contract with Marco Polo on his upcoming hotel project in Ortigas.

Markets tapped

Po said Unitrade recently started selling diapers in Malaysia and will soon sign a deal to enter the Cambodian market. He added that talks were ongoing for its plan to also go into Taiwan.

“We’re looking into the Philippines as our base also,” Po said, adding that he would soon start negotiations to flesh out such plans this year. “(There’s) no venue yet. We also have to secure some investment incentives.”

“Currently China isn’t competitive anymore in terms of labor. In fact, in the coastal areas, the labor cost in China is higher than in the Philippines. The only advantage in China now is they have a lot of raw materials that you can buy,” he said.

Po added that the plant in China, however, would be kept as the long-term plan was to sell a big volume in China.

“If we are successful in Malaysia and Cambodia, the Philippines will definitely be our base,” he said.

PH as regional base

In terms of monthly volume and measured by number of pads, JS Unitrade is currently selling  more than 60 million baby diapers, four million adult diapers and 45-50 million feminine protection pads. With its annual sales of P5.3 billion, it ranks 300th among the Philippines’ top corporations.

On the average, Po said his diaper business had grown by 18 percent in the last three years, outpacing the single-digit growth in the industry, which suggested that his company was eating other player’s market share.  His forecast is that revenue would continue to grow by 18-20 percent per year, thereby hitting P10 billion in the next four years.

Once the business has grown into a P10-billion concern, Po said that would probably be the time the company might consider listing on the stock exchange.

“We’re waiting for the right time. If we will be able to penetrate the region, we’ll have more value,” he said.

Po recently diversified into the property business with a P3-billion investment in a five-star Ortigas hotel property to be managed by Marco Polo.

The 313-room Marco Polo Ortigas Hotel will open by the end of 2013 and will be the newest five-star hotel in the Ortigas central business district. The hotel, which is now under construction, is located beside the Union Bank building along Meralco Avenue.