Kimberly-Clark Restructuring Pulp, Tissue Business
Jan. 25, 2011 - Kimberly-Clark said that it has initiated a pulp and tissue restructuring program that gets it out of pulp manufacturing. The company also said it will stop making certain products, mainly non-branded ones.
“We are initiating a pulp and tissue restructuring in order to exit our remaining integrated pulp manufacturing operations and improve the underlying profitability and returns of our consumer tissue and K-C Professional businesses,” said K-C's chairman and CEO Thomas Falk.
The restructuring is expected to be completed by the end of 2012 and will involve the streamlining, sale or closure of 5 to 6 manufacturing facilities around the world.
The total cost of the restructuring is expected to be $280 to $420 million after tax ($400 to $600 million pre-tax), K-C said. Cash costs are projected to be 25 to 50 percent of the total charges.
As a result of the restructuring, the company expects that by 2013 annual net sales will decrease by $250 to $300 million and operating profit will increase by at least $75 million.
Most of the restructuring will impact the consumer tissue business segment, K-C said.