Demographic trends & offshore competition moderate growth of hygiene films.

* The juvenile and adult hygiene film market consists of disposable diapers and feminine-hygiene and incontinence products. While these film markets are still growing, consumption of polyethylene resin in these markets has declined due to down-gauging of the films. And though the growth rate in this market is somewhat less than in previous years, thinner-gauge films have reduced costs for manufacturers.

According to Mastio & Company's latest PE Film Market Study, producers of juvenile and adult hygiene films consumed an estimated 550 million lb of resin in 2002, which will grow to a projected 619 million lb in 2006 with an average annual growth rate of 3.0%.

Thinner films cut costs

Several factors affect the growth of juvenile and adult hygiene films. The slow economy has a slight effect in encouraging purchases of less expensive, private-label brands, such as Wal-Mart or Walgreens, instead of national brand products. But this has little, if any, effect on overall consumption levels.

Although environmental concerns are sometimes raised against disposable vs. cloth diapers, the convenience of disposables has tended to win out. Meanwhile, diaper manufacturers have reduced the bulk of their products by up to 35% with super-absorbent padding, thus decreasing the amount of material entering landfills.

Film downgauging is the most talked-about issue today in the juvenile and adult hygiene film market. U.S. producers have to remain competitive with offshore film producers or face the threat of production migrating overseas. This is the primary reason for the slow growth of PE film poundage in this market.

North American consumption of disposable baby diapers has also been threatened by a decreasing birth rate. Consequently, diaper manufacturers are moving toward niche marketing techniques to develop new products such as disposable training pants, bibs, and swim pants. Many diaper companies are also trying to expand sales by offering extras such as higher absorbency, skin-care benefits, superior fit, and other performance improvements. However, these improvements make a soiled diaper more comfortable for the infant or child, which may result in fewer diaper changes each day.

The prospective consumer base for incontinence products is steadily increasing. An estimated 12.5% of the U.S. population is age 65 and older, and nearly half of that age group is estimated to be incontinent. Meanwhile, consumers are becoming more aware of the problems associated with adult incontinence and of specialized disposable products to deal with this disorder. As a result, today's adults are more comfortable purchasing incontinence products. Technological advancements have made the products less visible and more comfortable under clothing.

The PE hygiene film market is dominated by a shrinking number of producers. The top four producers in descending order are Tredegar Film Products, Pliant Corp., Clopay Corp., and Banner Packaging, part of Bemis Co.

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LLDPE is the mainstay

LLDPE is the material that most manufacturers prefer because of its increased tear and puncture resistance at lower gauges. LLDPE represented 55% of the PE resin consumed in 2002 for juvenile and adult hygiene film. LDPE is also utilized because of its high production speeds. A very small amount of HMW-HDPE resin is used for increased strength. HDPE film is more puncture-resistant in thinner gauges than other PE films.

Mastio & Company, based in St. Joseph, Mo., is a consulting firm specializing in industrial-consumer opinion research and market trends in the plastics industry. For more information, call [phone] or visit www.mastio.com/pt/outlook.html.