End of an Era…Kimberly-Clark to close or sell Everett’s Last Pulp Mill

Pulp and Tissue Restructuring

The company has initiated a pulp and tissue restructuring in order to exit its remaining integrated pulp manufacturing operations and improve the underlying profitability and return on invested capital of its consumer tissue and K-C Professional businesses. The restructuring is expected to be completed by the end of 2012 and will involve the streamlining, sale or closure of 5 to 6 manufacturing facilities around the world. In conjunction with these actions, the company will be exiting certain non-strategic products, primarily non-branded offerings, and transferring some production to lower-cost facilities in order to improve overall profitability and returns. The total cost of the restructuring is expected to be $280 to $420 million after tax ($400 to $600 million pre-tax). Cash costs are projected to be 25 to 50 percent of the total charges. As a result of the restructuring, the company expects that by 2013 annual net sales will decrease by $250 to $300 million and operating profit will increase by at least $75 million. Most of the restructuring will impact the consumer tissue business segment.

That paragraph in today’s 2011 outlook to investors by Kimberly-Clark means that the last pulp mill in Everett could be gone by 2012. While another paper company may buy the plant, it’s also a very valuable chunk of Everett waterfront that could be turned into something else.