Abstract
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive
environment
Product coverage
Away-from-home disposable paper products; Retail disposable paper products
Executive summary
Rising household penetration supports positive market performance in 2006
Though it showed a somewhat uneven development from year to year, Bolivia' s
disposable paper products market performed well over the review period as a
whole, with current value sales growing at a CAGR of 5%. According to
manufacturers, growth in current value sales was driven by rising disposable
incomes and the penetration of certain disposable paper product types in
Bolivian households. Less mature sectors like nappies/diapers/pants, wipes and
tissues registered stronger growth in current value sales than sectors like
toilet paper and sanitary protection, where household product penetration was
already quite high in 2001. Nappies/diapers/pants also benefited from
demographic trends, with Bolivia' s high birth rate driving demand. The market
as a whole continued to develop positively in 2006, with all sectors showing
robust growth in current value terms.
High raw material costs lead to increases in imports and domestic production
Bolivian consumers are highly price sensitive, meaning manufacturers must keep
their prices at an acceptably low level if they wish to maintain or improve
market value shares and volume sales. International paper prices rose in 2006,
driving manufacturers and importers in Bolivia' s disposable paper products
market to try and cut costs and seek out cheaper suppliers. Kimberly Bolivia,
for example, increased its domestic production operations. Promotora de
Eventos SA (PROESA) and Copelme SA meanwhile were compelled to change
suppliers and offer lower quality products at lower prices. Accordingly, these
and other companies began to import more products from regional countries like
Colombia and Peru. While Colombian products tended to be of a higher quality,
Bolivian manufacturers generally preferred to source products from Peru, which
were free from import taxes under a Trade Agreement between the two countries.
This allowed companies in individual disposable paper products sectors to keep
price hikes arising from higher raw material costs to a minimum in 2006.
Contraband products continue to play a major role in the Bolivian market
The widespread availability of contraband products continued to limit the
development of Bolivia' s disposable paper products market in 2006. Low quality
contraband disposable paper products are available at open markets throughout
the country, and they retail at significantly cheaper prices than branded
products from licensed manufacturers. During the review period, Kimberly
Bolivia estimated that contraband products represented around 30% of total
disposable paper products volume sales. The penetration of contraband products
is strongest in toilet paper, nappies/diapers/pants and tissues, where the
price gap with branded products is highest. Copelme was the only large player
which manufactured all of its products in Bolivia in 2006. While companies
like Kimberly Bolivia do manufacture some products locally, they also import
significant quantities from neighbouring and regional countries.
Products made from recycled materials continue to dominate toilet paper
Cheaper or economy products accounted for the highest share of disposable
paper products volume sales in 2006, retaining a dominant position in more
mature sectors like toilet paper. Comparatively low disposable incomes and
high price sensitivity means that Bolivian consumers are generally willing to
accept lower quality toilet paper products as long as they are cheap. Economy
toilet paper products are usually made with recycled paper, and thus tend to
be coloured rather than white. Most economy toilet paper products sold in the
country are contraband, usually in plastic bags containing 20 rolls. Pink and
green are the most popular colours. Licensed manufacturers like Kimberly
Bolivia and Companex also produce economy toilet paper products made from
recycled paper, but most consumers prefer cheaper contraband products.
Competition will intensify as the market maintains its positive development
As disposable incomes and household penetration continue to rise, Bolivia' s
disposable paper products market is expected to maintain its positive
development over the forecast period. All sectors will show growth in constant
value terms as companies introduce new brands and extend existing lines. Less
mature sectors like kitchen towels, incontinence products and wipes will show
faster growth in constant value terms than those where household product
penetration is already high, such as toilet paper for example. As demand for
disposable paper products grows, competition in the market is expected to
intensify. Multinational Kimberly-Clark and its domestic arm Kimberly Bolivia
were the major players in 2006, followed by Copelme, the only manufacturer to
produce all of its products locally. These and other leading companies will
have to invest in new product developments and find ways to cut costs if they
are to successfully resist the challenge of new entrants attracted by the
positive outlook for Bolivia' s disposable paper products market.
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