Memphis, Tennessee, USA 30 October 2012 -- In a statement to media outlets, the group reported that it was not able to establish a sustainably profitable nappies business in Europe. For this reason Kimberly-Clark has made the decision to terminate nappy production and sales in Europe and exit the diaper category. Only Italy remains exempt from the action. The company will also be examining a variety of other sales or withdrawal options for areas of business with poor margins and poor growth especially in the Consumer Tissue segment.
Kimberly-Clark is closing or selling a total of five production facilities in Europe, four of them part of the group’s Consumer division and one in the Professional segment. The changes will affect between 1,300 and 1,500 employees.
The group is currently planning to close two plants in Barton-Upon-Humber and Flint in the UK. The Barton facility manufactures nappies, the Delyn plant in Flint, Wales, is part of Kimberly-Clark Professional and mainly manufactures disposable paper towels. The remaining production lines in Flint are not affected by the closure. Kimberly-Clark’s disposable nappy plant in Calatayud, Spain, is to be sold, as is the Alanno facility in Italy where toilet paper is produced and the Klucze plant in Poland where the group produces toilet paper and facial tissue. The company did not disclose any details on why it is not considering a sale of the facilities in the UK.
The group’s business report for the third quarter of 2012 also reveals that the company’s European administration is to be streamlined in order to bring cost structures into line with the strategic decisions. The total restructuring costs are to amount to $250-350m after tax. The areas of business being closed or sold generate annual sales of some $500m and negligible operative profits, the group reports.
The repositioning in the market enables Kimblerly-Clark Consumer Europe to operate more profitably in future and to grow in a number of key markets, the company said. The bulk of the envisaged measures are to be concluded by the end of 2013.