Companies

Investor takes on P&G with new plant after L’ Oreal sale

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L’Oreal East Africa MD Patricia Ithau signs a purchase agreement with Interconsumer Products MD Paul Kinuthia (centre). Interconsumer sold the health and beauty business to the French firm on Friday. Photo/D iana Ngila

Businessman Paul Kinuthia is seeking to cut the dominance of Procter & Gamble with a Sh1.1 billion new sanitary products plant using proceeds from sale of his beauty business to L’Oréal.

The Nairobi factory will produce Golden Shine shoe polish, All-Tyme sanitary pads, and Bouncy diapers and is expected to start production by December and end the contract manufacturing deal the firm has with the Asian manufacturers.

The new capacity will allow Interconsumer Products to challenge the dominance of Procter & Gamble and emulate the firm’s hitherto battle with multinationals for control of the cosmetic market using its flagship Nice &Lovely brand.

The firm Friday sold the health and beauty business to French and the world’s largest cosmetic group, L’Oréal, which has now renamed the new business Interbeauty Products in the multi billion shilling deal.

(Read: L’Oreal beats Tiger brands in buyout of Nice & Lovely)

Mr Kinuthia will continue to own the diapers and sanitary division, which will benefit from proceeds from the sold beauty business.

“We have invested Sh500 million to acquire land for the new factory. Another Sh600 million will go to setup the plant which we expect to start production by December,” Mr Kinuthia said.

This is expected to raise its competitiveness in a market dominated by Procter & Gamble which sells Always sanitary pads and Pampers diapers.
A recent survey of consumer trends by research firm Consumer Insight found that P & G’s Always sanitary pad is the most preferred brand with a 62 per cent share while Interconsumer’s All-Tyme has seven per cent.

The rest of the market is highly fragmented and this has been linked to an increase in the number of brands imported from Asian markets.

With more cash and deep experience in the fast moving consumer goods market, Mr Kinuthia reckons he ready to market share battle.

“I have learnt a lot from running the company over the years, including the recent transaction we had with L’Oréal. I will use that to grow the sanitary business,” Mr Kinuthia said.

He is expected to face an uphill task in wresting market share from the established P & G which has is one of the oldest players in the market and spends tens of millions of shillings in marketing.

Research firm Euromonitor International says P & G’s Always brand, for instance, continues to dominate because it “has been in a long time and is thus a trusted brand amongst females.”

Euromonitor added that P &G has been increasing its market share as a result of aggressive and consistent marketing activities such as television and print as well as in-store advertising.

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