TOKYO -- Japanese diaper maker Unicharm took a major step toward developing the Middle Eastern market by opening its third plant in Saudi Arabia.
The new factory, next to another manufacturing center in Riyadh, apparently cost a few billion yen (1 billion yen equals $9.18 million). Along with diapers, the installation will produce sanitary products.
Although the plant's production capabilities have not been publicized, the new facilities are larger than those at Unicharm's other two Saudi factories. This suggests that the company has secured the space needed to implement its plan to eventually double output capacity in the kingdom. Unicharm converted Gulf Hygienic Industries, a local manufacturer of infant diapers, into a subsidiary in 2005. Five years later, the unit started its second factory.
The market for diapers in the Middle East is growing rapidly along with the population. Unicharm's sales in the region appear to have risen by double digits in fiscal 2016. The Japanese multinational also opened a diaper factory in Egypt in 2012.
Saudi Arabia has sought to wean its economy off oil in recent years, including by wooing foreign manufacturers. King Salman bin Abdul-Aziz Al Saud Salman called for corporate investments in his country during his visit to Japan last month, the first by a Saudi monarch in 46 years. Toyota Motor and other Japanese companies agreed with the Saudi government to launch feasibility studies geared toward local production.