Procter & Gamble expecting consumer spending to hold up

American consumer goods giant Procter & Gamble’s (P&G) Philippine unit expects to do better than its counterparts in the United States and Europe when it comes to sales growth, although there has been a marked decline in its laundry detergent line.

Procter & Gamble Philippines, Inc. president and general manager, James M. Lafferty, told reporters the volume of laundry goods sold by the whole industry in the 12-month period ending January 2009 has fallen by 5% from the previous year’s levels.

To cope, the firm aims to boost sales in this segment by producing an additional P1 billion worth of products, namely Tide, Ariel, and Mr. Clean powder sachets, in the next three to six months. This means 35% more product in power sachets.

P&G’s Cincinnati, Ohio headquarters said last month global sales for the 2009 fiscal year ending June would flatten or contract by up to 4%.

For its Philippine subsidiary – the multinational’s third-oldest after the United States and the United Kingdom – sales will do better, said Mr. Lafferty and P&G Philippines public relations manager Jamie L. Endaya.

Mr. Lafferty noted that P&G Philippines has been meeting sales targets for the first three months of 2009.

Mr. Endaya said: “We are seeing that the effect of the recession is not [as big] in Asia.”
Production for exports, Mr. Lafferty added, has been running at full capacity.
P&G Philippines exports paper products such as diapers and feminine pads from its 22-hectare Cabuyao, Laguna plant to Asian markets such as Indonesia and Malaysia.

“If we could produce more, we would … [We are not bringing down production levels,” Mr. Lafferty said.

The firm also expects to hire 100 more employees this year particularly for information technology and finance positions, said Mr. Endaya, adding that the company “[does not] have any plans right now of cutting jobs.”

The downturn, though, has crept into sales of laundry products, officials noted.
The decline was recorded by a study conducted by P&G with market research firm TNS.
Households, said Mr. Lafferty, have been found to be skimping on laundry soap use by adding more clothes to one wash load.

Asked how P&G Philippines sales did vis-a-vis the industry, Mr. Lafferty said without elaborating: “When you have a 5% [decrease in industry sales], you really feel it.”
He noted however that certain products have performed better, as sales of Downy fabric softeners for instance grew by double-digits last year.