P&G eyes emerging markets for growth

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CINCINNATI — Expanding into emerging markets is essential to Procter & Gamble Co.’s (P&G’s) long-term growth, says president and chief executive officer Bob McDonald.

"We will continue to develop faster-growing, structurally attractive businesses with global leadership potential," he said this month at the consumer products giant’s annual meeting. "More than at any time in our company’s 170-plus-year history, we have the brands, capabilities, strategies and financial flexibility necessary to expand our product portfolio into more parts of the world."

Addressing his first annual meeting since becoming the company’s CEO, McDonald said P&G will seek to add 1 billion new consumers over the next five years.

Observing that P&G’s U.S. sales average about $100 per person per year, he said if the company can boost sales in China and India just to Mexico’s level of $20 per person, it would lift overall volume by 50%. The company’s Chinese and Indian sales now average $3 and less than $1 per person, respectively. "So the potential is absolutely amazing," McDonald commented.

P&G’s post-recession strategy will be to reach more consumers in more parts of the globe and more thoroughly, McDonald said. That includes expansion of P&G’s product lineup to add more low-cost items so that "there’s no reason any consumer should have to buy any other brand," he said.

The company also will pursue more "horizontal innovations" with its existing portfolio, such as the recently launched Bounce dryer bars and Tide detergent additives.

Also in October, P&G released its 2009 sustainability report. Highlights include reductions (per unit of production) of water consumption by 52%, energy usage by 48%, carbon dioxide emissions by 52% and waste disposal by 53% since 2002. An example cited in the report is P&G’s household care plant in Brockville, Canada, where teams cut total site energy use by 20%.

Since 2007, P&G products with a significantly reduced environmental impact have had sales of $13.1 billion. They include such innovations as Ariel Excel Gel, a highly concentrated, low-temperature laundry detergent introduced in Western Europe.


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