Dental News - P&G cuts back on costs to expand overseas

Daniel Zimmermann, DTI

Fri. 16 March 2012

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CINCINNATI, Ohio, USA: Owing to slowing revenue growth, consumables manufacturer Procter & Gamble has to cut $10 billion in costs by the end of the fiscal year 2016. The restructuring plans made public at the Consumer Analyst Group of New York conference in February involve shedding thousands of jobs in the nonmanufacturing workforce, as well as lower spending in areas like marketing or materials.

Despite the plans, hiring new staff in emerging markets like China will continue, the company behind the Crest toothpaste brand said.

P&G intends to expand its global toothpaste business significantly in the future by targeting emerging markets, particularly in Latin America. CEO Robert McDonald said that he expects Crest sales in markets like Brazil to grow to double digits this year.

The Cincinnati company recently introduced its new Crest Pro-Health Clinical oral health product line to selected markets, which it claims helps to reduce plaque significantly. New additions to the Crest 3D White collection of award-winning products, Crest3D White Glamorous White Toothpaste and Crest 3D White Intensive Professional Effects Whitestrips, were also launched during New York Fashion Week last month.

P&G has been manufacturing Crest-branded toothpaste since 1955. While it is available in many countries worldwide, most recently in Belgium and the Netherlands, it still lags behind other market players like Colgate and Unilever in terms of market penetration.

The company gained more than $11.5 billion from its healthcare businesses last year, which included oral health products and feminine wipes under the Always brand.

In total, P&G reported $82 billion in net sales last year, a 4.1 percent increase from 2010. Gross margins in the same period decreased by almost 2 percent, which the company said was due to lower customer spending and increasing costs for commodities.

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