Volatile chemical costs a challenge for Procter & Gamble - CEO

05 October 2010 13:09  [Source: ICIS news]

MONTREUX, Switzerland (ICIS)--Unpredictable and volatile costs within the commodity chemical and raw material chains are still a big challenge for consumer goods companies such as US-based Procter & Gamble (P&G), the company’s CEO, Robert McDonald, said on Tuesday.

“In the past two years, world oil prices dropped from $150/bbl to below $50/bbl and now hover around $75/bbl. The consumer goods industry is still recovering from the financial crisis of 2008 and global recession,” said McDonald in a keynote presentation at the American Oil Chemists Society (AOCS) World Detergents conference held in Montreux, Switzerland.

Market growth for fabric and home care has slowed in 2009 to just above 4%, compared with an average 5%/year over the previous three years, said McDonald.

Fabric and home care accounts for 30% of P&G’s sales and 28% of the company’s net earnings.

McDonald pointed to innovation within the laundry-care sector as a way to counteract the effects of recession.

“The number of new fabric and home care products that reached the shelves of stores each year has consistently increased by 20% each year for the past decade. Just the last 18 months, 60% of all new laundry and detergent products came from lower-tier segments, showing innovation is the driver value at each and every price point,” he said.

Emerging markets such as China and India are also big growth opportunities for the laundry industry.

The detergents conference ends on Thursday.

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By: Doris de Guzman
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