2013 Nonwovens Sales: $1.3 billion (estimated)
Partnership Products & K-C Professional
Thomas Falk, chairman and CEO; Elane Stock, president, K-C Professional; Richard Thorne, vice president, K-C Professional North America; Bob Stargel, vice president, K-C Global Nonwovens; Tony Fedel, business leader, K-C Professional Partnership Products
Corinth, MS; Balfour and Hendersonville, NC; Lexington, NC; LaGrange, GA; Neenah, WI; Barton-upon-Humber, U.K.; Jaromer, Czech Republic
Certification achieved in Berkeley, NC; Lexington, NC; LaGrange, GA; and Barton (U.K.); other facilities in progress
Spunbond, meltblown, SMS, BCW, hydroentangled, film lamination, elastic lamination and Coform
Kimberly-Clark Professional; Protective Fabrics: Block-It, Dustop, Evolution, and Noah; Filtration Media: Intrepid, Powerloft, Cyclean
Filtration, acoustics, consumer hygiene, industrial, medical, packaging, protective, sorbents, textile linings and wet wipes
Unique in its role as one of the world’s largest consumers and manufacturers of nonwoven roll goods, Kimberly-Clark’s nonwovens output mainly goes into its large disposable consumer product businesses, which include Huggies diapers, Depend and Poise adult incontinence items, Kotex feminine hygiene items as well as a number of healthcare and wipes products sold through the company’s healthcare and professional products businesses, respectively. Beyond these businesses, however, about 15% of the company’s nonwovens output is sold externally through the company’s Partnership Products division of Kimberly-Clark Professional.
“Our strategic importance to the K-C Enterprise continues to growth,” says Partnership Products business leader Tony Fedel. “Our unique business model within K-C allows us to create enterprise value by leveraging K-C’s global scale and capabilities yet we are untethered from K-C’s global billion dollar brands. This allows us to commercialize opportunities across any part of the value chain even if they fall outside of K-C’s traditional product categories.”
For example, within air filtration, does not produce finished branded filters. Instead, the Partnership Products business markets and sells filtration media to producers of commercial, industrial and retail filters. “This is a great example of where we utilize our know-how in nonwovens and have translated it into a sustainable business that does not require support from K-C’s brand teams,” says Fedel.
Partnership Products’ key markets include delivery systems for wipes and other disposable goods, sorbents, filtration media, and protective fabrics and films for automotive and construction use.
“We have a right to win in many nonwoven market segments,” Fedel says. “In one meeting we may be talking about opportunities in industrial settings and in the next we are discussing how to solve very different customer needs in the healthcare segment.”
Describing the Partnership Products team as being entrepreneurial, Fedel says the team aspires to support their customers’ desire to bring exceptional nonwovens enabled products to market.
“We work closely with our customers to enable their success by bringing K-C’s talent and nonwovens know-how to solve their problems,” Fedel says.
“One recent example of this entrepreneurial spirit and ability to collaborate with broad K-C resources led to K-C’s entry into the building products space. In May of this year, it launched Kimberly-Clark Block-It housewrap at Menards. The product draws on the company’s expertise in the development and manufacture of nonwoven, breathable materials to keep moisture out but let water vapor escape.
While Partnership Products worked to develop the technology, KC Professional offered the know-how and access to bring the product to market. It is now available at Menards and should roll out to new retailers by the end of the year.
Turning to Kimberly-Clark’s corporate business, sales were essentially flat in 2013 as 3% organic sales growth offset decreases brought on by a European restructuring plan announced in 2012. Likewise, the company’s personal care sales remained flat for the year.
More specifically, adult care volumes grew in the mid-single digits due to innovation in its core brands, Depends and Poise, which are both market leaders in their categories. During the past 12 months, K-C has rolled out several innovations in the adult incontinence market, both to secure future growth and defend its position against a potential newcomer in the market.
In the Poise brand, in April, the company introduced new Poise Microliners featuring SAM (superabsorbent material), which are described as the thinnest liner in the category and are designed specifically for light bladder leakage, a problem that affects one in three women.
Also new in K-C’s adult products line is an upgrade in Depend disposable underwear. This new innovation features Fit-Flex protection, providing the great protection people have come to expect from Depend with more Lycra strands for a smooth and comfortable close-to-the-body fit.
Meanwhile, childcare sales were down due to category softness and lower shipments of swim diapers. Additionally, K-C’s decision to exist the diaper market in much of Europe, a strategy announced in October 2012 and expected to be complete by the end of 2014, has led to a 31% sales decrease in Europe.
K-C is offsetting the loss of the European business by focusing on developing markets and in 2013, the company reported impressive diaper growth in China, which reported a 35% gain, as well as Russia and Brazil, which each grew 20%.
Meanwhile in the developed markets, K-C continues to innovate and add new products like GoodNites Tru-Fit, a machine-washable, cotton-blend underwear with disposable, absorbent inserts. This bed wetting aid, with outstanding nighttime protection is available for boys and girls in sizes small/medium and large/extra large with colors and patterns for each gender.
K-C Professional’s sales increased 1% in 2013 on higher volumes in washroom and wiper applications, which offset the impact of the company’s exit from lower margin safety areas. Recent news out of this division includes the launch of a new wiper for aviation surface preparation and a new dual-surface wiper system for cleaning and disinfecting within healthcare environments.
In other corporate news, K-C plans to spin off its healthcare business later this year, allowing it to take advantage of its leading position in several key areas. The spun off business will be known as Halyard Health and it will be headquartered in Alpharetta, GA.
“The planned spin-off of our health care business continues our focus on creating shareholder value,” says Kimberly-Clark chairman and CEO Thomas Falk. “When the spin-off is completed, Halyard Health will be able to take advantage of its leading positions in several key categories to drive its performance and pursue its own opportunities. This move will also allow Kimberly-Clark to further sharpen our focus on growing our consumer and K-C Professional brands around the world.”