Plan for next 10 years is to develop new products at innovation center in Brazil, said Gonzalo Uribe
11/11/2022
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Gonzalo Uribe — Foto: Ana Paula Paiva/Valor
After selling the Brazilian operation of Neve toilet paper and professional paper towel for $175 million to Suzano two weeks ago, Kimberly-Clark now plans to invest $80 million in the next 10 years in the Latin American market, focusing on the innovation center in Brazil.
Owner of the diaper brands Huggies for babies, Plenitud for adults, and the menstrual pad Intimus, the company, over the last three years, has invested $300 million in plants and technology in Brazil.
The plan for the next 10 years is to develop new products, said Gonzalo Uribe, president of Kimberly-Clark for Latin America.
Kimberly’s plan was to sell the whole paper operation, called “tissue” in the sector’s jargon, in Latin America, according to what Valor found out on the last weeks before Suzano closed the deal. Now, asked if he intends to sell this area in other countries, Mr. Uribe said that “nothing changes in the other operations of the region.”
Suzano’s acquisition includes the tissue plant with a production capacity of 130,000 tonnes per year in Mogi das Cruzes (São Paulo) and Neve brand. The other brands, such as Kleenex and Scott, will be licensed to Suzano for a “determined term.”
As for sales in the second semester, the executive said that “both through research on consumer habits, and in an analysis of the business, we see that some hygiene and cleaning habits that intensified during the pandemic remained.”
The sales of personal hygiene and beauty products, according to Abihpec, the cosmetics and toiletry sector’s trade association, grew 10% in the first semester, without considering tax payments, driven especially by the makeup category, with a 20% high, and the fragrance industry, which increased 16%. Abihpec estimates to close the year with double-digit growth or real growth between 4% and 5%.
About the impact of the U.S. economic slowdown, and probable recession in 2023 in the world’s largest economy, the president of Kimberly-Clark for Latin America said that “in its 150 years in the world and 26 years in Brazil, the company has already gone through several challenges, in several aspects of the business, and has proven itself solid.” The executive works with a scenario of “a volatile operating environment,” but he trusts in the company’s ability to “deliver sustainable growth.”
In Brazil, Mr. Uribe said, the company will invest in Huggies innovation (diapers, personal hygiene products, moist wipes), Intimus feminine napkins, and Plenitud geriatric diapers.
With the sale of the paper products operation, the plant in Mogi das Cruzes, with a workforce of 1,000 people, will be transferred to Suzano in the first half of 2023. But Kimberly-Clark has two more plants in the country, in Camaçari (Bahia) and Suzano (São Paulo), which houses the company’s largest production unit and where the innovation center is located.
In the third quarter, the company’s global sales grew 0.9% to $5 billion, and the profit fell 0.4%, to $467 million. In North America, sales fell 5%, with lower volumes and higher prices. But in Latin America and Asia, according to the company, organic sales growth was strong.
*By Cynthia Malta — São Paulo
Source: Valor International