2014 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; Berkeley, 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, construction, acoustics, consumer hygiene, industrial, medical, packaging, protective, sorbents, textile linings and wet wipes
One of the world’s largest manufacturer of diapers, feminine hygiene items and adult incontinence products, Kimberly-Clark is also a major manufacturer of nonwoven products with plants located around the world. While a majority of these nonwovens fuel its large consumer products business, it innovates and sells nonwovens in a number of markets through its Partnership Products business.
“The heritage of Partnership Products is and continues to be partnering with other companies, providing them with the nonwovens solution that enables them to launch a new product and win in the marketplace,” says Tony Fedel, business leader of Partnership Products. “While we are evolving how we go to market as we assess new growth opportunities, we remain committed to our heritage customers and meeting their needs.”
An example of this evolution is K-C Block-It housewrap, K-C’s first branded entry into the building products space, which was launched in May 2014 at Menards home improvement stores. 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 collaborated internally to develop the technology, K-C Professional offered the customer access to bring the product to market. More than a year after the launch of this product, K-C is now looking at expansion opportunities within the building space.
Meanwhile, K-C Professional Partnership Products’ heritage markets, some of which include filtration media and wet wipe substrates, continue to perform well. Within these markets, it is K-C Professional Partnership Products’ mission to create enterprise value by leveraging the company’s global scale and capabilities. This division has the advantage of not being tethered to K-C’s global billion dollar brands so it can commercialize opportunities across any part of the value chain, even if they fall outside of K-C’s traditional product categories.
For example, within the air filtration industry, Kimberly-Clark does not produce finished branded filters. Instead, the Partnership Products business markets and sells filtration media to producers of commercial, industrial, automotive 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 dilute the efforts of K-C’s global brand teams,” says Fedel.
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. “The Partnership Products team works hard every day to deliver value to our customers that makes a real difference for them and their customers. Collaboration with our customers is key. By knowing what problem to solve for them and the value the solutions brings, we are better able to guide our innovation efforts.”
In late 2014, K-C spun off its healthcare business, which was a considerable user of nonwovens materials, into a separate company now known as Halyard Healthcare. Per K-C earnings releases, this has made Halyard a K-C Professional customer. “The spin-off hasn’t changed our strategic focus.” Fedel says.
On the corporate front, K-C’s total 2014 sales reflected a 1% increase compared to 2013 but organic sales rose 4%. Within its personal care busineses, the big news was the finalization of changes related to its exit from the Western and Central European businesses, a plan that was announced in 2014.
In early 2015, after less than stellar North American sales in the fourth quarter for its personal care business, K-C announced it will be focusing on marketing and innovation this year, which will compete with major rival Procter & Gamble, parent company of Pampers and Luvs.
Chairman and CEO Thomas Falk made the announcement during K-C’s fourth quarter 2014 earnings call. “One of our businesses had a soft year in North America, and that was mainline Huggies diapers,” Falk said during the call. “To improve our performance in 2015, we will be making investments in innovation, marketing and relative value to key competition.”
K-C’s North American sales in the personal care segment dropped 2%. Volumes were down 2% in this area, and currency was unfavorable 1%, while net selling prices rose slightly. Huggies diaper volumes were off 10%, according to the company, which it attributes to “marketshare declines and competitive promotional activity.”
K-C also saw lower volumes for its Pull-Ups training pants. Falk says K-C will focus on both North America and emerging markets to drive growth. North American plans include improvements in Huggies diapers and baby wipes and adult care products with new product launches and a few mainline improvements.
K-C will introduce new products or make upgrades to existing items across many categories. “To support our innovations and growth initiatives, our advertising spending should be up somewhat as a percent of sales,” he said.
Some of this innovation has come through an exclusive partnership with Costco big box retailer in the U.S. and Canada. Huggies Little Snugglers Plus and Little Movers Plus featuring a gentle absorb liner, adding an extra layer of protection, and double grip strips for a comfortable and secure fit, were launched his year exclusively at the retailer. Meanwhile, new Huggies Snug & Dry diapers, available only at Wal-Mart, lock away wetness for up to 12 hours.
Within K-C’s incontinence business, Depend active fit silhouette is a moderate absorbency brief that features a thin design for complete comfort, a lower rise and is available in black or beige.