Kimberly Clark Corp. earlier this week announced a restructuring of its pulp and tissue business that will result in the "streamlining, sale or closure of five or six manufacturing facilities around the world."
The company also said it plans to jettison "certain non-strategic products, primarily non-branded offerings," and move some production to lower-cost facilities.
Dallas-based Kimberly-Clark, which manufactures consumer products such as Kleenex tissues and Huggies diapers, said the restructuring likely will be completed by the end of 2012.
"These actions will allow us to exit our remaining pulp manufacturing operations and improve the profitability and returns of our Consumer Tissue and K-C Professional businesses," Vice President and CFO Mark Buthman said during the company's fourth-quarter 2010 earnings call on Jan. 25.
Kimberly-Clark said it expects the restructuring effort to cost between $280 million and $420 million after tax and to boost operating profit by at least $75 million by 2013.
Among the plants that will be involved in the restructuring, Chairman and CEO Thomas Falk told investors and analysts that Kimberly-Clark will try to sell its integrated pulp and tissue mill in Everett, Wash., and likely will close another mill in Australia.
" ... Both these pulp mills were in a strong currency environment, and that just makes it tough for them to be competitive in a world pulp market," Falk said on Jan. 25. "So exiting these last couple of own-make pulp operations is really the guts of this, and there are some other facilities that were primarily making either private-label or hard rolls, non-branded products."
Kimberly-Clark reported fourth-quarter sales of $5.1 billion, a 2% increase over fourth-quarter 2009, and operating profit of $699 million, a 3% drop from fourth-quarter 2009.
For full-year 2010, Kimberly-Clark reported sales of a $19.7 billion, a 3% increase, and a 2% decline in operating profit.
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