P&G expanding in China

By Li Woke

GUANGZHOU -- Procter & Gamble has begun construction of one of the largest manufacturing sites in Asia, aiming to serve the fast-growing China market.

The new Luogang Plant is in Guangzhou, where P&G's China headquarters is located, and will be built in three stages. The first stage, set to begin operations in the second half of 2013, will produce a variety of goods including baby care products, such as Pampers diapers.

The company did not reveal the cost of the new plant, but said it is part of a $1 billion investment in China to be implemented by 2015.

"The Luogang Plant will produce multi-category products that complement the Huangpu Plant and expand P&G's scale of production in the region," said Shannan Stevenson, P&G's president for Greater China. "The new plant once again demonstrates P&G's confidence in the China market and its commitment to Chinese consumers."

Based in Cincinnati, Ohio, P&G entered the Chinese market in 1988. Today, China is the company's second largest market worldwide.

Procter & Gamble reported nets sales of $22.1 billion in the fourth quarter of 2011, an increase of 4 percent. Sales volume grew at high single-digit rates in developing regions, but was offset by a mid-single-digit decrease in developed regions.

"We are extremely pleased with the performance. It's exceeding our expectations here in China," said Stevenson.

P&G is not the only consumer goods giant that is expanding in China. Also this week, Unilever, P&G's main competitor, announced it has started construction of a new plant in Tianjin, where it will make liquid laundry detergent and fabric softeners.

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