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Kimberly-Clark grows by 14% in Brazil and invests R$ 400 million in expansion plan

The multinational’s third-largest operation will host a new innovation center to be opened in São Paulo in April.

Kimberly-Clark has been operating in Brazil since 1996 and has seen its annual revenues rise by double digits for a decade. In 2015, the local subsidiary of US-based consumer products giant posted a 14% rise in its gross revenues to R$ 4 billion. The global total for the year came to US$ 18.6 billion.

The 2015 sales numbers were something to celebrate, especially considering the difficulties the market faced last year, including the decline in household consumption and the depreciation of the Real against the US dollar, which has raised production costs, as many of the raw materials used in manufacturing its products are imported. According to Kimberly-Clark’s PR in Brazil, “the results were positive and the company expects to continue to grow and win market share in its operating categories.

Kimberly-Clark's plant in Eldorado do Sul

Kimberly-Clark’s plant in Eldorado do Sul

Kimberly-Clark owns strong brands like Huggies, Intimus and Kleenex, and expects revenues from its Brazilian operations to expand by over 10% in 2016. The country is currently its main operation in Latin America and the third-largest in the world. However, Brazil is still not regarded as a consolidated market for Kimberly-Clark as the company recognizes that some areas have barely been explored, particularly in the North and Northeast regions.

Even though Brazil is the world’s third largest market for disposable diapers – behind only the US and China –, the average number of diapers used per day is four. A survey carried out by the company shows that in developed countries this number rises to seven.

Such growth opportunities were key factors in the move by Kimberly-Clark to set up its new innovation center, which is scheduled to be launched in São Paulo in April. The development – “which reinforces Brazil´s importance as a strategic market”, according to Kimberly-Clark – was made at an investment of R$ 40 million and represents only a modest percentage of the R$ 400 million the company plans to invest in Brazil this year.

The total sum will be used in marketing its current product lines, buying machinery and expanding its two distribution centers and five manufacturing plants in Rio Grande do Sul, Santa Catarina, Bahia and São Paulo.

Kimberly-Clark’s Brazilian subsidiary also wants to focus on developing new products targeted at different groups. Its portfolio has over 100 items, including market-leading brand Huggies, which recorded a 30% share of the baby diaper market in 2015. The company is now focusing on adult diapers with its Plenitud brand and aims to supply the needs of Brazil’s elderly population, which currently represents 11% of the total, but should account for over 30% by 2050.

Kimberly-Clark has 4,000 employees throughout the country and expects to cut its production costs – which had already been reduced by 5% in 2015 – by partnering with local suppliers. “In the coming five years, we affirm our commitment to expand the production process, continue investing in machinery and uphold the pursuit of innovation as a way of increasing our share of the domestic market even further,” announced Kimberly-Clark’s PR. Russia and China are also considered drivers of global growth for the company.

Renata Martins

Portfolio

© 2016 - Brazil Beauty News - www.brazilbeautynews.com

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