Hogla-Kimberly Ltd. will invest NIS 30 million to replace its Huggies diaper production line with a more advanced product. The new diaper will have organic cotton and a new custom-fitting seam. The new diapers will be sold at the old price.
Hogla-Kimberly general manager Ari Melamud said, "Kimberly Clark launched the new diaper in the US as a super premium product and charged a premium of 30-40%. We decided not to charge a premium, in order to strengthen current consumers and to give them added value. I believe that there is room for a super premium product in Israel only if you bring about a real revolution, and offer something completely different. We intend to go there in the future, too."
Israel's diaper market totals NIS 600 million a year. It is the largest non-food consumer item. Hogla-Kimberly has a 70% share of the diaper market, with its Huggies and Titulim brands. Huggies has a 53% share of the market and Titulim a 13% share. Rival Proctor & Gamble's (NYSE: PG) Pampers has a 25% market share in Israel.
Hogla-Kimberly will choose the baby model for the new diaper via Facebook, where parents will submit candidates. The two babies who receive the largest number of "likes" will star in the campaign.
The new Huggies could actually turn out to benefit Titulim, which will get a brand upgrade.
"Globes": Will the current Huggies technology be used for Titulim?
Melamud: "That is what we usually do. In this case, Titulim already uses technology that is very similar to that of Huggies. We usually lower the technology to the downmarket brand, which is Titulim."
Hogla-Kimberly is a subsidiary of IDB Holding Corp. Ltd. (TASE:IDBH) unit Hadera Paper Ltd. (AMEX: AIP; TASE: AIP).
Published by Globes [online], Israel business news - www.globes-online.com - on December 22, 2010
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