March 20, 2020 / 3:42 PM / 12 days ago

Sweden's Essity maxes output as coronavirus drives consumer stockpiling

STOCKHOLM, March 20 (Reuters) - Swedish hygiene products giant Essity has increased its output to full capacity to cope with higher demand across markets, especially for toilet paper, as the coronavirus has driven consumers to stockpile.

Governments are closing borders and asking their citizens to stay at home as they try to contain the virus that has killed more than 10,000 people and is spreading rapidly in Europe.

“We have seen increased demand globally for all our consumer products, that is toilet and household towels, baby diapers, feminine care, and also incontinence care products in the retail channel,” Essity Chief Executive Magnus Groth told Reuters.

“It’s due to hoarding. So from our perspective it’s a matter of timing of demand, really, rather than an increase in demand,” he said in an interview on Friday.

Essity is the world’s second-biggest maker of consumer tissue such as toilet paper and handkerchiefs, under a wide range of brands including Lotus, Edet, Tempo and Vinda.

To maximise the volumes machines can produce, Groth said the company had reduced the number of articles in product categories in the greatest demand.

“We might usually produce 20 kinds of toilet paper in a machine, in various formats, qualities and colours. We are now going down to the maybe the five most sought-after,” Groth said. “This way we don’t need to stop the machines as many times to change article, meaning we can increase output.”

Groth said demand for its office and restaurant tissue products, under its Tork range, was still high.

“But of course, if you take the perspective of a few months, if people spend more time at home and less in offices, airports and restaurants, then the use of consumer products will grow and that of professional hygiene products, the Tork brand in our case, will decline,” he said.

The rival to Procter & Gamble and Kimberly-Clark is the global leader in hygiene products for businesses under the Tork brand, and in incontinence products with TENA. (Reporting by Anna Ringstrom; editing by Barbara Lewis)

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