Huggies, Baby Soft owner says SA prices will rise into 2023 as input and freight costs bite

• Consumer giant Kimberly-Clark says prices for nappies, toilet paper, and other essentials in its stable will increase into next year.
• It expects inflation to reach over 10%, and it is already averaging 6% to 8% across its categories.
• Toilet paper is facing the biggest inflationary pressures because of pulp costs rising significantly.
• For more stories, go to www.BusinessInsider.co.za.

Kimberly-Clark in South Africa, which owns nappy and toilet paper brands Huggies and Baby Soft, says price increases will continue into 2023 as pulp and sea-freight costs weigh on the business.

The company expects inflation across all categories to breach 10%, from a current average of 6% to 8%, Steven Hayes, Kimberly-Clark’s general manager for the sub-Saharan Africa consumer unit, said.

“We do see inflation across our categories for the remainder of this year; we are forecasting for that to continue into the early parts of next year, with pricing stabilising towards the second half of next year,” Hayes told Business Insider South Africa.

“Pricing across our categories will reach just over 10%, in terms of inflation to the consumer,” he said.

The category most sensitive to price hikes is its toilet paper and tissue, where the price of pulp (a critical raw material for making such paper) has seen considerable increases.  

The company says it continues to put efficiencies in place to reduce the impact on consumers.

“For us, the heightened sensitivity on the nature of the category we make and that we offer, it really is important for us to ensure that we consistently focus on reducing any increases that we take into the marketplace, and that is a major focus for Kimberly -Clark, particularly in South Africa,” Hayes said.

The availability of raw materials and congestion in sea freight, and at South Africa’s ports, add to the company’s current pressures.

The consumer goods giant’s costs for critical inputs such as pulp, logistics, and electricity have all seen significant increases.

Pulp rose 20% year-on-year, while sea freight costs have quadrupled compared to pre-pandemic levels.

“If you look at where logistics and sea freight have gone over the last two years, [they are] essentially four times the rate of an average cost of a container in pre-pandemic levels. And most of our raw material components are imported, as well as paid for in dollars,” said Hayes.

Hayes says the company continues to focus on bringing new products and pack sizes into the market that match the budget requirements of its consumers through its various channels.

“Our Kotex brand will continue to bring out different pack sizes, whether it be smaller packs that can meet different convenience needs… whether it be bigger packs that drive better value across our different formats,” he said.

“And if you look at the Baby Soft portfolio, we are driving better value through introducing bigger packs into the marketplace.”