AUBURN — An $11 million, 50,000-square-foot expansion at Procter & Gamble's Tambrands plant is well under way, sparked by increased demand for its Pearl brand products worldwide.
The expansion is on schedule for completion in February and will allow the company to add three production lines.
The plant currently produces almost 9 million tampons per day, supplying feminine care products for the entire North American market under P&G’s Tampax brand, the worldwide leader in the tampon industry with a 46 percent market share in 2011, according to research firm Sanford C. Bernstein.
Since purchasing the facility in 1997, Procter & Gamble has invested more than $350 million in the 530,000-square-foot facility, allowing the company to make huge strides advancing the Tampax Pearl line, which has captured 30 percent of the domestic tampon market since being introduced in 2002.
The expansion will allow the plant to increase its potential output of Pearl brand products by as much as 30 percent, said Rick Malinowski, Tambrands’ external relations manager.
“We’ve seen very steady growth in the Pearl line," Malinowski said. "It hasn’t been exponential, but it’s been steady and strong, and this will prepare us to have more capacity for the future."
The expansion project, which broke ground in July, should be completed by February, with the new lines up and running by May.
“We are investing in our Auburn plant to support the continued growth of our Tampax brand,” said Velvet Gogol Bennett, a spokesperson with P&G. According to its SEC filings, the company reported $2.8 billion in earnings as of Sept. 30. Its feminine-care division reported $507 million in sales in the same period.
Employment at the plant will stay flat as several older production lines are decommissioned to make room for the new Pearl lines, which now account for two-thirds of the plant’s output.
“As more and more consumers are going toward that (product), we need more capacity," Malinowski said. "We made the decision last year to go ahead and do it, and it’s been full-speed ahead since spring."
An aging domestic consumer base has led to flat and even “slightly declining” tampon sales, he said, but the Pearl line — which is more popular with a younger generation of consumers — represents a promising growth market for Tambrands. “There has been a steady transition from cardboard to Pearl,” Malinowski said, noting the Pearl products are sheathed in plastic.
Global market potential
Last year saw a low single-digit rise in volume of P&G’s feminine-care line, driven by growth in developing markets like Central and Eastern Europe, the Middle East and Africa. P&G is the global leader in feminine-care products, with around one-third of the global market share, a figure that has held up even during the recent worldwide financial crisis.
“It’s affected us like everyone else," Malinowski said. "If people have lower household income, there might be a little migration to generic brands, but ours is a very personal product — it’s not something you want to switch over frequently. Our Tampax brand has the highest customer loyalty of all our consumer products.”
Tambrands’ facility in Auburn makes tampons exclusively for the North American market, but P&G recently installed a Pearl brand production line in Budapest, Hungary, to supply European consumers, Malinowski said.
The company is also considering expanding into Asia — its products are already on the shelf in South Korea — but certain cultural differences between the Western and Eastern markets could mean slower growth there.
“We look at Asia as an opportunity area, but there are some cultural barriers around the use of the product that we haven’t overcome. It will take time to make that an accepted norm,” Malinowski said.
Aside from market potential, Tambrands has other global connections. It weathered the European economic crisis’ effect on its supply chain thanks to a partnership with a German company, which is the world’s lone producer of the cellulose-based fiber used in Tambrands’ products. Germany’s comparatively strong economic position in the European market allowed the fiber company to keep prices steady, Malinowski said.
Not just a production facility, the Tambrands plant houses a machine shop, engineering and quality labs, and is a leading site for the development of new Tampax product research.
But the plant also plays an important role in a different type of development, acting as a sort of farm system for P&G employees.
“We are globally known for our manufacturing capabilities ... but we are also an incubator for talent at all levels,” said Malinowski, who described a stint at the Auburn facility as “a real feather in the cap” for up-and-coming P&G executives.
“They have not only invested here, but thrived here,” said Roland Miller, economic development director for the city of Auburn.
“I think the reason, in large part, is because of the quality leadership and management that have been assigned to this facility,” he said. “It’s been great working with the leadership that has come through here.”
Tambrands plant Manager Felicia Coney serves on the executive board of the Lewiston-Auburn Economic Growth Council, and has been “very active in the community,” Miller said.
The facility is the city’s largest property taxpayer — $1.4 million in 2011 — and the second-largest employer behind Walmart, with about 450 on its payroll.
“The city has been wonderful and very responsive to our needs, Malinowski said. "All the permitting has gone smoothly and it’s been very helpful."
Miller lauded Tambrands corporate initiatives, such as the company’s zero-landfill project (see related story) and FlexiCenter customized packaging facility, a division of the plant employing people with disabilities.
“(These) programs are evidence that even as the company examines their bottom line and looks to enhance that, they have also taken a look at how that can be accomplished by giving more opportunities to a greater variety of people,” Miller said.
He said the Tambrands plant has helped the region and the state dispel presumptions about being isolated or parochial when it comes to locating a business here.
“They are cited by me all the time to potential corporate clients when we are trying to show them how a relatively small community in the state of Maine can be logistically connected to the world,” Miller said.
“This expansion is just continuing evidence that the Maine worker is still one of the most productive in the nation,” he said.
Matt Dodge, Mainebiz staff writer, can be reached at email@example.com.