Sales: $1.15 billion
Description: Key Personnel
Thomas Falk, chairman and CEO; Dudley Lehman, group president, Business to Business Sector; Rosalind Brewer, president, Global Nonwovens Operations and Technology; Mark Foreste, vice president, Nonwoven Fabrics Business
Corinth, MS; Balfour, NC; Lexington, NC; LaGrange, GA; Neenah, WI
Certification achieved in Lexington, NC and LaGrange, GA; other facilities in progress
Spunbond, meltblown, SMS, BCW, hydroentangled and Coform
Accord fabrics, Blockit protective fabric, Breeze facemask media, Cyclean filtration media, Dustop protective fabric, Evolution 4 protective fabric, Fathom filtration media, Intrepid filtration media, Matrix protective fabric, Noah protective fabric, Powerloft filtration media and QuieTech acoustic media
Filtration, acoustics, furniture, hygiene, industrial, medical, packaging, protective, sorbents, textile linings and wet wipes
Solid 2004 sales growth realized by Kimberly-Clark's Nonwoven Fabrics Business helped one of the world’s largest nonwoven producers maintain its leadership position in the industry.
“It was a very good year for the roll good fabrics business,” commented J.C. Sneyd, director of marketing and sales for K-C’s nonwovens division. “We realized a year where our key market segments recorded volume growth surpassing INDA’s industry projections.”
Mr. Sneyd attributed the company’s success to the fact that it participates almost exclusively in select markets that lend themselves to its unique products. “We typically do not pursue commodity product areas and tend to favor markets where our offerings typically can’t be duplicated. Our growth strategy is based on these very unique products and processes.” He added that K-C’s few existing commodity roll good products were in line with industry growth rates exhibiting nominal increases in the last year.
The percentage of K-C’s total nonwovens capacity targeting these external markets remains at about 12-15% while 85-88% is used internally to supply the company’s huge consumer products business including leading brands such as Huggies disposable diapers and training pants, Depend adult incontinence products and Kotex sanitary protection items. The ratio of K-C’s nonwovens usage to internal/external business areas has been fairly steady for quite a few years in spite of capacity increases and the fact that its machines are kept evergreen.
As for K-C’s Business to Business division—which encompasses its health care, professional, roll goods and global operations groups—the company has worked hard to mesh objectives and goals with strategies and measures. The group is moving forward and the spin-off of Neenah Paper, Technical Paper and pulp and timber operations in Canada was completed in November 2004. K-C has leveraged its proprietary nonwovens technology in the B2B business area through a new portfolio of high margin wiping products. For instance, WypAll towels are designed to perform better than cloth, at a fraction of the cost, making them an ideal replacement for cloth rags.
When it comes to new products from K-C’s consumer end, it has been another prolific year. Kleenex Moist Cloths, based on proprietary hydroknit technology, were launched in March. The nonwoven cloths are thick, soft, disposable hand and face cloths created for use around the home. The product provides an innovative solution to an unmet consumer need for a disposable alternative to a washcloth or wet paper towel—one that is more substantial and easier to use than traditional hand and face wipes. Kleenex Moist Cloths are large and hand-sized (8.5 inches x 8.25 inches) and feature a mild, alcohol-free formulation that is gentle on the skin. Consumer feedback led Kimberly-Clark to create a facial tissue-type carton for Kleenex Moist Cloths rather than the traditional, portable tub container used for regular wipes.
Also in the Personal Care sector, Pull-Ups Training Pants have been redesigned and now feature new designs and a choice of products. For the majority of parents who prefer toilet training aids that provide positive reinforcement, K-C has added learning designs to the inside and outside of its pants-fun graphics that fade when the product is wet, signaling an accident. For parents who prefer an alternate approach, the Pull-Ups brand also offers pants that keep a child dry but make him or her feel wet temporarily.
K-C’s new Huggies Bath & Baby products illustrate the company’s recently augmented efforts to build strategic partnerships and thereby expand capabilities, reduce costs and speed time to market for innovations. The line includes an innovative, proprietary liquid baby powder that goes on wet and dries after application, as well as disposable nonwoven wash mitts, shampoo and other toiletries. By using outside partners for manufacturing, Kimberly-Clark took the line of products from insight to concept to launch in less than 12 months with limited capital investment.
In the incontinence products sector, K-C revamped its Depend brand packaging In May. The new packaging will make it easy for users and caregivers to quickly find the right product solutions to help manage incontinence and will appeal to aging baby boomers who need help dealing with this condition. By making the packaging more discreet, informative and appealing, consumers can quickly find the right products for their needs.
One important strategy for K-C has been its commitment to using market insights in developing and emerging markets, which have considerable growth potential as demonstrated by K-C’s reportedly robust sales in these regions. K-C is currently putting its resources behind a targeted group of six countries that it calls BRICIT-Brazil, Russia, India, China, Indonesia and Turkey. These six countries alone account for nearly half of the world’s population, and the estimated size for K-C’s business in these markets is currently in the $6 billion range.
In terms of K-C’s corporate structure, one key change came in April when the company combined its North Atlantic Personal Care and Family Care businesses into a single organization. Steve Kalmanson, group president-North Atlantic Personal Care, will head the new organization as group president-North Atlantic Consumer Products. The creation of an integrated North Atlantic consumer products organization continues K-C’s evolution into a more unified global organization and provides immediate advantages.
Wrapping up, Mr. Sneyd reflected on 2004 as a fun yet challenging year for the roll goods business. “As any nonwovens participant will tell you, in 2004 and so far in 2005, there are plenty of challenges facing producers. We saw very solid growth this year but that is not to say that these challenges subsided by any means.”
Meanwhile, K-C chairman and chief executive officer Thomas Falk described 2004 as a year of delivering on commitments in a challenging business environment. He explained that last year K-C achieved sales volume and earnings per share growth in line with its objectives, generated strong cash flow and made strides in its drive for long-term ROIC improvement. “Today, we are squarely focused on our health and hygiene mission, prioritizing the best growth opportunities for our global brands and applying greater financial discipline to every area of the company.""
Commenting on the outlook for 2005, Mr. Falk said the company is poised to meet its goals of 3-5% revenue growth and earnings growth in the mid-to high-single digits. This is in line with its long-term Global Business Plan objectives. “While we are meeting our financial objectives, our goal is to take Kimberly-Clark to the next level of performance,” Mr. Falk said. “We’re looking outside the company more frequently and challenging our teams to design solutions that meet the needs of our customers and shoppers as well as the users of our products.”