2016 Nonwovens Sales: $1.3 billion
Thomas Falk, chairman and CEO Kimberly-Clark; Kim Underhill, global president, K-C Professional; Aaron Powell, president, K-C Professional North America; Tony Fedel, business leader, K-C Professional Partnership Products
Corinth, MS; Hendersonville, NC; LaGrange, GA; Neenah, WI; Maumelle, AK; Conway, AK; Beech Island, SC
Corinth, MS; Hendersonville, NC; LaGrange, GA; Neenah, WI
Spunbond, meltblown, SMS, BCW, hydroentangled, film lamination, elastic lamination, airlaid, and Coform
Kimberly-Clark Professional; Protective Fabrics: Block-It, Dustop, Evolution and Noah; Filtration Media: Intrepid, Powerloft, Cyclean; Delivery Systems: Hydroknit
Filtration, construction, acoustics, consumer hygiene, industrial, medical, packaging, protective, sorbents, textile linings and wet wipes
With the launch of a new wet wipe substrate nonwoven fabric technology into the marketplace, Kimberly-Clark Professional Partnership Products, the company’s external nonwovens business, continues to target new markets both within and beyond its traditional branded consumer products to grow its position globally. This division drives the innovation, marketing and sales for the nonwovens made by K-C not destined for products like Huggies diapers, Depend adult incontinence products and Kotex feminine hygiene items.
K-C’s nonwovens operation is immensely important to its consumer business and brands. Roughly, 85% of its output fuels this massive business. The Partnership Products business targets areas outside of its consumer business and brands like filtration, construction, acoustics and wet wipe substrates.
“At Kimberly-Clark Professional Partnership Products we believe in enabling our customer’s professionals to do their best work,” says Tony Fedel, business leader, K-C Professional Partnership Products. “We are driven by a passion to commercialize distinctive nonwoven materials empowering our customers to develop and market with pride finished products that make end-users lives healthier, safer, and more productive. Insight driven innovation coupled with partnership level customer relationships is how we drive growth.”
The recent innovation launch being offered by K-C Professional Partnership Products is Dual-Texture Hydroknit Material. The new fabric is perfect for demanding cleaning applications. It features a scrubby side and a strong, absorbent, cloth-like side. Dual-Texture Hydroknit Material releases fluid more evenly and longer than other substrates, allowing end-users to clean more space with each wipe.
Kimberly-Clark Professional Partnership Products sells standard Hydroknit Material for use in many end-user preferred, wet wiping applications including cleaning and polishing,” Fedel says. “Kimberly-Clark Professional* Partnership Products also offers the company’s proprietary Coform material—which is used in K-C’s Huggies baby wipes brand—for sale into applications where its unique properties enable enhanced finished product performance. Typical applications include use as the absorbent core in consumer cleaning and personal care products.”
Outside of disposable hygiene, Partnership Products focuses on markets beyond K-C’s consumer businesses. One of these is the air filtration market where growth continues to be driven by the health and productivity benefits of good indoor air quality (IAQ).
“There is growing awareness of the health dangers to people associated with submicron airborne particles—such as dust, mold, pollution, bacteria and allergens,” Fedel says. “Companies and consumers are increasingly seeking the productivity and health benefits of improved IAQ for their employees, customers and family members. Opportunities to improve people’s IAQ while they are commuting, working, learning, shopping, healing, or relaxing at home are driving market growth.”
Citing media performance including longer filter life and energy-efficiency in-use as key drivers during the filter product development cycle, Fedel explains how a filter’s airflow resistance can cause the HVAC air handling system to consume more energy as it works to deliver the required air flow. “Working harder and running longer can result in higher energy usage increasing cost and associated greenhouse gas emissions,” he says. “Nonwoven, electret-treated air filter media has become increasingly valued for its ability to meet these demanding filter performance and end-use requirements.”
On the corporate level, Kimberly-Clark reported a slight drop in sales in 2016 to just over $18 billion. Sales in its personal care business, which includes its Huggies diaper brand, Depend and Poise adult incontinence brands and Kotex feminine hygiene products, decreased 2% compared to 2015. Gains were reported in the Huggies baby diaper business while baby wipes sales increased in the mid single digits. K-C executives also attributed category growth and innovation to gains in childcare and adult care businesses.
CEO Tom Falk recently told investors that as a consumer preferred brand it is Kimberly-Clark’s job to focus on category innovation. “We are focused on innovation,” he says.
This innovation will help the company return sales of its diapers and other products to high levels in upcoming quarters. For its second quarter of 2017, K-C reported that lower sales volumes in the infant and childcare business were largely responsible for slight decreases in the company’s personal care division. Sales of Huggies diapers were reportedly down in the mid single digits during the second quarter. Sales of Huggies baby wipes grew in the mid single digits.
Executives blame the softness on two major economic trends—increased competition in the category as well as lower category demographics, caused by a declining birth rate in major markets like North America and South Korea.
Falk says he considers the declining birth rate a temporary situation. “There are lots of reasons for the birth rate decline,” he says. “But, the broad trend is that millenials are having kids later, but as long as they have the same number of kids eventually, it will correct itself.”
As K-C makes efforts to compensate for lower birth rates and steel itself in an intently competitive climate in North America, China continues to be a bright spot for the company.
With five times as many babies born as in the U.S., K-C has been successful offering best-in-class innovation, which translates into a tier seven product and premium diaper pants. And, K-C’s Chinese business will certainly benefit from the opening of a new diaper manufacturing facility in Tianjin, which will expand manufacturing and accelerate delivery to the market.
Strategically located in the Tianjin Airport Economic Area, the new facility features a fully-automated production line with integrated operations, including an R&D laboratory and manufacturing and distribution center. “The establishment of the Tianjin mill demonstrates our confidence in the Chinese market and our commitment to long-term development in China,” says Mike Zhang, managing director of Kimberly-Clark China. “Kimberly-Clark China will continue to make world-class products accessible to Chinese consumers through sustainable manufacturing to lead the world in essentials for a better life.”
Outside of diapers, K-C continues to innovate in markets like feminine hygiene and adult incontinence. In July, K-C launched U by Kotex Fitness, a line of tampons, liners and pads that are ideal for use when working out. The launch expands the brands’ commitment to creating real change and making things better when it comes to periods, period experiences and the feminine hygiene category.