The Economy

Kimberly-Clark to Shed Six Plants

Jan. 26, 2011

Company will try to sell Everett, Wash., pulp and tissue mill.

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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About the Author

Josh Cable | Former Senior Editor

Former Senior Editor Josh Cable covered innovation issues -- including trends and best practices in R&D, process improvement and product development. He also reported on the best practices of the most successful companies and executives in the world of transportation manufacturing, which encompasses the aerospace, automotive, rail and shipbuilding sectors.

Josh also led the IndustryWeek Manufacturing Hall of Fame, IW’s annual tribute to the most influential executives and thought leaders in U.S. manufacturing history.

Before joining IndustryWeek, Josh was the editor-in-chief of Penton Media’s Government Product News and Government Procurement. He also was an award-winning beat reporter for several small newspapers in Northeast Ohio.

Josh received his BFA in creative writing from Bowling Green University, and continued his professional development through course-work at Ohio University and Cuyahoga Community College.

A lifelong resident of the Buckeye State, Josh currently lives in the Tremont neighborhood of Cleveland. When the weather cooperates, you’ll find him riding his bike to work, exercising his green thumb in the backyard or playing ultimate Frisbee.