Kimberly-Clark cutbacks won’t affect Everett

  • Friday, November 30, 2001 9:00pm
  • Business

Associated Press

DALLAS — Tissue and diaper maker Kimberly-Clark Corp. said Friday it will close five plants and lay off 1,400 workers because of weak demand, but remains on track to meet analysts’ earnings expectations through next year.

The company’s tissue and pulp mills in Everett were not part of the cutbacks.

Kimberly-Clark, which makes Kleenex tissues, Huggies diapers and a variety of other paper and consumer goods, said it will close a paper plant in East Ryegate, Vt., by the end of the year and four plants in Latin America over the next 18 months.

The job losses would represent about 2 percent of the company’s workforce.

Kimberly-Clark said sales to hotels, office buildings, airports and other commercial buildings had fallen since the Sept. 11 terrorist attacks. The away-from-home sales comprise about one-sixth of the company’s sales, and the company said it expects weakness in such sales for several more months.

The company said it would take $120 million in charges to cover the plant closings, including $90 million in the fourth quarter.

Kimberly-Clark told analysts in a conference call that it is on track to earn 75 cents to 85 cents a share in the current quarter. Analysts surveyed by Thomson Financial/First Call expected 79 cents a share, a decline from 87 cents a share a year ago.

Chairman and chief executive Wayne Sanders said the company is cautiously optimistic about next year because of lower costs for energy and raw materials and less impact from weak currencies in key overseas markets.

Sanders said the company continues to aim for annual sales growth of 6 percent to 8 percent and double-digit increases in earnings per share. He said per-share profits would grow faster than sales partly through the company buying back 2 percent to 3 percent of its shares each year.

A spokesman said the 80 workers at the Vermont plant, which makes specialty papers, were notified Friday that the plant will close by year end. The company declined to identify the four Latin American plants to close.

In afternoon trading, shares of Kimberly-Clark rose $1.39 to $57.23 on the New York Stock Exchange.

Copyright ©2001 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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