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Kimberly-Clark Corporation

Kimberly-Clark P.O. Box 619100 DFW Airport Station Dallas, TX 75261 (214)830-1200 Worldwide Nonwovens Sales: $340 million U.S Nonwovens Sales: $250 million Key Personnel: Darwin Smith, chairman and chief executive officer; Wayne Sanders, president and chief operating officer; James McCauley, president-Nonwovens and Professional Health Care Sector, responsible for world support and Far East operations, also executive vice president; James Rausch, vice president-nonwoven fabrics. Plants: LaGrange, GA (nonwovens, disposable isolation gowns); Lexington, NC (nonwovens): Corinth, MS (nonwovens, disposable surgical wrap, industrial wipes); Neenah, WI (nonwovens, incontinence products); Fullerton, CA (disposable diapers); New Milford, CT (diapers, feminine hygiene products); Beech Island, SC (diapers, feminine pads); Paris, TX (diapers); Ogden, UT (diapers); Conway, AR (nonwovens and feminine care products); Memphis, TN (scrim reinforced materials for wipes, medical); Tucson, AZ, Nogales Mexico (operating room disposables); Balfour, NC (nonwovens, isolation gowns, wipes); Maumelle, AR (wipes); Aubury, New South Wales, Australia (spunbond); Flint, Wales, U.K.; Kimcheon, South Korea (spunbond).

K-C also has manufacturing facilities in Puerto Rico, Brazil, Canada, Colombia, El Salvador, France, Germany, Indonesia, Malaysia, Mexico, The Netherlands, Panama, Singapore, Philippines, Panama, South Africa and Thailand. Processes: Spunbonded, Melt Blown, Composites, SRM scrim reinforced material Brand Names: Accord, Kimlon, Spuncare, Kimguard, Spunguard, Evolution 3 (SMS laminate), Evolution (health care), Cyclean (filtration); Demique; Control protection fabrics; Depend incontinence line; Huggies, Snuggems disposable diapers; Huggies baby wipes; Pull-Ups disposable training pants; Kotex, New Freedom, Lightdays, Anyday feminine hygiene products Major Markets: Disposable Diapers, Incontinence Products and Feminine Hygiene Products; Medical Nonwovens, Wipers Notes: The fortunes of the nonwoven roll goods operations at Kimberly-Clark remain intimately tied into the corporation's well-known consumer products business, with brand names that include "Huggies," "Kotex" and "Depend." But the fabrics business, with well known brand names of its own, still stands as a significant force within the worldwide nonwovens business based on the sheer volume of its output. Its worldwide sales figure of $340 million is estimated based on the selling price of its more than three billion sq. yards of nonwoven fabric if sold at current prices on the merchant market.

It is estimated that as much as 80-90% of its total output of spunbonded, melt blown and composite materials is consumed by the voracious appetite of its successful consumer products group, mostly for the growing line of Huggies disposable diapers, wipes and training pants. The remaining 10-20%, or approximately 330 million sq. yards annually, is sold onto the open market. These outside sales alone would make K-C a significant player in the worldwide nonwovens game, but when combined with its production for in-house use it allows the company to be ranked as the third largest worldwide producer.

K-C still sources almost all of its diaper coverstock needs internally. Because of capacity expansions, its percentage of internal consumption has remained relatively stable despite recent product redesigns that have increased the use of coverstock in each diaper. One reason is because it has this internal capacity to use. But a second, perhaps more important, reason is that it is unable to find sufficient quantity of face fabric of sufficient quality.

K-C has had a very successful medical nonwovens business for a number of years and its medical fabrics are among the leaders in barrier protection and comfort, two musts in these days of concern over AIDS and other infectious diseases. But even here, its impact on the nonwovens business is much less compared to the demand on its resources made by Huggies diapers. The medical segment is a major user of the SMS composite technology, a technology that has continued to drive K-C's medical business.

The Legal Story

K-C, a worldwide leader in spunbonded technology, has taken a very active legal position regarding its patent portfolio in this area. Testament to this was the much-publicized suit against German spunbond machinery producer Reifenhauser, Troisdorf, and U.S. spunbond competitor Poly-Bond, Charlotte, NC. The suit maintained that Reifenhauser and Poly-Bond, at the time the exclusive U.S. licensee of the German spunbond technology, had infringed on K-C patents. The suit was settled out of court late last year and allows the two defendants to continue to market their spunbonded equipment and materials in the U.S.

K-C currently has no on-going litigation in the nonwovens industry, with both the Reifenhauser/Poly-Bond suit and an unrelated action against James River having been settled to Kimberly-Clark's satisfaction.

In the melt blown arena there has not been a lot of new product developments, with interest in the technology not keeping pace with that shown in its sister spunbonding process. Its major use remains in composites, such as the spunbonded/melt blown/spunbonded (SMS) fabric for medical applications. Baby wipes are among the newest end uses for K-C melt blowns; a composite of a melt blown with its "Coform" nonwovens is being used for its new Huggies baby wipes. K-C is concerned that, like the spunbonding process, melt blown development will fall victim to the proliferation of off-the-shelf production lines being installed worldwide.

In the new product arena, a strong choice as the most interesting new product at IDEA '90 last year was "Demique" elastic fabric from K-C, described by the company as "a new choice in tough and durable, yet drapable and soft, permanent elastic fabrics." Demique fabric is made of unique, thermoplastic microfibers based on copolyetheresters, which are often used in applications where their characteristics of shock absorption, dynamic flex and noise control can be exploited. K-C is promoting Demique fabric for its elastic potential in comparison with "Spandex," along with its high recovery. "Demique elastic fabrics represent a new choice for achieving elasticity through laminates or composites that has never been possible with Spandex or other elastic products," is part of the sales literature.

K-C has done a significant amount of research in learning how to make composites incorporating Demique fabric and is offering this expertise to customers. The Demique technology is already being used in Perfect Fit Flex Wall Bedsacks, a stretchable bed sheet that incorporates a cotton/poly layer on top and as a backsheet with a layer of Demique fabric in the middle to provide stretch. Shawmut Mills is also laminating Demique to fabrics to produce stretchable composites.

The first few months of 1991 saw some changes in nonwovens personnel at K-C. This spring James Rausch was named vice president-nonwoven fabrics, succeeding Ronald Carter, who was named president of K-C's Karolton Envelope unit and has relocated to Dayton, OH. Mr. Rausch, who was previously chief financial officer of K-C's European operations, reports to James McCauley, executive vice president. He had previously been involved with the nonwovens business in the early 1980s.

In his first quarter and annual meeting report to stockholders earlier this year, chairman Darwin Smith pointed to training pants, feminine care and bathroom tissue products as "noteworthy contributors" to 6% growth for the quarter. Net sales for the quarter were $1.7 billion and net income was $120.3 million. Among the early 1991 highlights at K-C:

* Kleenex Huggies Pull-Ups training pants were expanded from 65% to 85% of the country by the end of March.

* Kleenex Huggies baby wipes expanded availability from 12% to 22% of the U.S.

* Kotex Ultra Thin pads and Kotex Natural Curved Maxi and super maxi feminine pads were available in 30% of the country and Kotex New Freedom Curved maxi and super pads completed their expansion into Canada.

* Two new nonwoven manufacturing lines were approved during the first quarter for LaGrange, GA and at Berkeley Mills at Balfour, NC.

In addition to these developments, in the past year K-C has started up new child care equipment in Paris, TX; infant care lines in Costa Rica; incontinence equipment in Neenah, WI; new feminine care capacity at Conway, AR; new nonwovens equipment at Berkeley and Lexington, NC; a greenfield baby wipes facility at Maumelle, AR; and additional diaper capacity in Korea.

In 1990, K-C continued to hold about a 32% market share of the $3.8 billion baby diaper market and a similar share of the $1.08 billion feminine pad market; it had only a 6% share, however, of the $610 million tampon business in the U.S. In incontinence care, its Depend line continues to dominate, holding almost half of this burgeoning $225 million business.

Net sales for 1990 were $6.4 billion, up 11.8%, and net income was up 2% to $432.1 million. The largest capital spending program in its history began to take shape in the last two years year with the spending of $696.4 million in 1989 and $658.5 million in 1990.

In its most recently reported period, K-C set quarterly records with second quarter sales and gross profits of $1.7 billion and $609.4 million, respectively. The company recently released its second quarter report, which analyzed the factors behind this spectacular showing, even in the midst of a recession.

The review shows that increases in sales volumes accounted for more than 80% of the growth and that nonwovens-based products led the sales surge. Huggies Pull-Ups training pants completed national expansion in May, two years after their market introduction. The national availability of Huggies baby wipes increased from 22% to 37% of the U.S. The national introduction of Kotex ultra thin pads and Kotex natural curved maxi feminine pads and Kotex Lightdays oval pads was completed in the U.S. Product and packaging improvements for the Depend product line were introduced in the U.S. during the second quarter. The U.S. market was the only one that contributed to the excellent quarter; in France, improved feminine pads were introduced.

Consumer Market Activity

In mid-summer K-C revealed plans to quadruple the size of its Huggies baby wipes plant in Maumelle, AR. The move is an apparent justification of K-C's decision to expand its highly recognizable Huggies brand into ancillary markets such as baby wipes. According to a report in the Wall Street Journal (July 23), Wayne Sanders, president and chief operating officer at K-C, said baby wipe sales have "exceeded expectations," but the company would not elaborate. K-C said it will spend $50 million at the Maumelle plant to expand the production facilities for the wipes.

The newest product variation from K-C is a sanitary pad that features elasticized side protectors to prevent leakage. Kotex Natural Curved Maxi, which was introduced nationally in June, boasts such features as an extra wide adhesive strip and a tapered thickness, with the center section of the pad being thicker than the ends. This is accomplished using a two pad construction, with one larger, outer pad and a smaller inner pad giving the unique shape. The two pads are conventional fluff pulp and the entire napkin features a spunbonded polypropylene coverstock. The Kotex pads are sold in a 24-count pack that retails for $3.19. They are tri-folded and come in individual packs.

Late last year K-C revealed plans to expand its position in the Brazilian diaper market. The company announced it would invest $3.5 million to introduce Huggies, with plans to set up a diaper facility in the future; the imported Huggies were selling for less than locally manufactured Johnson & Johnson diapers in an effort to grab initial market share.

In the incontinence products market, K-C began testing last spring a new product called "Poise" that was said to be similar to J&J's "Serenity" incontinence pad. The discreet name and design of the pad, initially available in upstate New York, is meant to reduce the stigma attached to incontinence.

K-C was also involved in the incontinence product advertising debate earlier this year in which the New York State Attorney General forced it and Procter & Gamble to alter their incontinence product advertising. The state demanded that the two leading manufacturers of retail incontinence products indicate in any advertising that urinary incontinence is often a treatable disorder. K-C, while strongly denying that its advertising was misleading, had made an agreement with the Attorney General last year to change the wording of its advertisements and to add an easily visible message to commercials advising sufferers to consult their doctors.
COPYRIGHT 1991 Rodman Publications, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Publication:Nonwovens Industry
Article Type:company profile
Date:Sep 1, 1991
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